UBS: Expect the S&P 500 index to reach 6400 points by the end of next year. Quality stocks will continue to outperform value stocks.

UBS released a document stating that the impact of inflation and interest rates over the past two years is fading. Arend Kapteyn, UBS's Global Chief Economist and Strategist, said that despite the slowdown in US economic growth following Trump's cabinet appointments, US stocks will moderately decline in the first half of next year. However, once profit forecasts decline to more realistic levels, stock market performance will improve in the second half of the year. Therefore, the S&P 500 index is expected to reach 6400 points by the end of next year, with a potential increase of about 6%. US stocks are expected to outperform Europe in the next 12 months, while Europe will outperform emerging markets. Quality stocks will continue to outperform value stocks, but US financial stocks are expected to perform well. In emerging markets, Chinese internet stocks remain the top choice. Arend Kapteyn's "UBS Global Economic and Market Outlook 2025-26" predicts that global economic growth will slow from 3.2% to 2.6% over the next two years, partly due to the inability of the US to sustain its current economic growth. Arend also pointed out that the currencies of any region in the world have not reflected tariff risks, and it is expected that the euro and the yen will continue to be under pressure in the short term. If Japanese economic growth continues to improve, it will likely prompt the Bank of Japan to raise interest rates to near 1% next year, leading to a significant rebound in the yen. In terms of commodities, gold demand from central banks and the retail market remains strong for portfolio diversification. Even if the momentum of gold slows down, it will still be a winner among commodities, while enthusiasm for copper will be dragged down by sluggish economic growth.