Investing.com — UBS upgraded US and UK stock markets, while downgrading Europe, the firm revealed in a Tuesday note.
The bank lifted UK equities to Overweight, a move based on the sector-adjusted price-to-earnings (P/E) ratio relative to the , which is currently at a 25% discount.
UBS notes that UK markets are defensive in nature and could benefit from a stronger dollar. The firm’s above-consensus GDP growth forecast for the UK, coupled with a lower-than-consensus interest rates projection, also supports its positive outlook.
In addition, the market also has “less ‘Trump’ risk on our scorecard than any major non-US Market,” UBS strategists led by Andrew Garthwaite said.
Sector-wise, the investment bank highlights domestic sectors such as retailing, UK banks, homebuilders, and brick manufacturers as particularly attractive, as well as “many cheap stocks versus peers and have underperformed their peers.” These include…
