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UBS: Slowing U.S. consumer spending may threaten stock market rally

UBS: Slowing U.S. consumer spending may threaten stock market rally

格隆汇格隆汇2026/05/20 11:40
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Glonghui, May 20 | UBS Group Chief Strategist Bhanu Baweja stated that as real disposable income growth approaches zero and fiscal support gradually fades, U.S. consumer spending will slow down, posing a threat to the stock market. Although U.S. corporate earnings were strong in the first quarter, driven by artificial intelligence, Baweja pointed out that the yield on long-term U.S. Treasury bonds has surged significantly in recent trading days, with the yield on 30-year Treasuries rising to levels not seen since 2007. He warned that this increase reflects robust nominal growth in the U.S., rather than inflation concerns, and that real yields are the main factor driving rates higher. Currently, the market is focused solely on capital expenditures by ultra-large AI companies, while overlooking the risks of a slowdown in the consumer and financial sectors. Earnings growth in these areas was strong in the first quarter but masked underlying weaknesses. If the market is worried about inflation today, it should be concerned about growth tomorrow. Against this backdrop, the strategist expects large-cap stocks to outperform small-cap stocks, and growth stocks to outperform value stocks—especially if Middle East conflicts persist. However, even though both U.S. and European stock markets face headwinds, the U.S. market is still expected to outperform Europe.
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