A US stocks rally may face an inflection point next week as the Federal Reserve is expected to deliver what may be the final rate rise of its most aggressive monetary policy tightening cycle in decades.
As the year began, many investors expected higher interest rates to bring on a recession that would hurt stocks after 2022's sharp decline. Instead, the US economy is proving resilient even as the Fed has made progress in its inflation fight – an ideal Goldilocks Scenario that many believe will support equities.
The S&P 500 is up nearly 19 per cent year-to-date and closed on Thursday at 4,534.87, only about 6 per cent below an all-time high reached in January 2022.
While investors broadly anticipate the central bank will raise rates by 25 basis points at its July 26 meeting, many also hope for signs that policymakers are more confident inflation will continue cooling, eliminating the need for the Fed to lift borrowing costs much further and supporting the thesis that has helped buoy stocks in recent weeks.
“A big part of the market is still macro driven and inflation is still in the driver's seat. What the Fed does and says next week will be critical,” said Cliff Corso, chief investment officer of Advisors Asset Management.
Expectations of a benign macroeconomic backdrop and an end to Fed tightening have pushed some analysts to revise views on how high stocks will go this year.
Jonathan Golub of Credit Suisse on Tuesday raised his year-end target on the S&P 500 to 4,700 from 4,050, citing a stronger economic outlook and expectations of strong technology and communication service earnings.
Fundstrat Global Advisors' Tom Lee raised his year-end target to 4,825 earlier this month, while Ed Yardeni of Yardeni Research sees the S&P 500 at 5,400 in the next 18 months.
Meanwhile, a gauge tracked by the National Association of Active Investment Managers showed stock pickers' exposure to equities at its highest since November 2021, months before the Fed began its rate hiking cycle.
“Bearish investors have had to capitulate,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “We're seeing a fundamental backdrop of lower inflation, resilient economic data, better consumer confidence, and a falling dollar that's a pretty good recipe for gains.”
Eric Freedman, chief investment officer of US Bank Wealth Management, has increased his stock holdings in recent months and is growing more bullish on the tech sector in anticipation that companies' earnings will improve as the economy remains resilient.
“Consumers have been aided by a tight jobs market and some solid real wage gains, and at the same time we're seeing some real progress on the inflation front,” he said.
At the same time, forecasts for a recession – seen as all but a foregone conclusion at the beginning of the year – are growing less ominous.
Goldman Sachs on Monday cut its probability of a US recession starting in the next 12 months to 20 per cent from an earlier 25 per cent forecast, positing that easing inflation could open a path for the Fed to lower rates without precipitating a downturn. The bank last month raised its year-end S&P 500 target to 4,500, from 4,000.
Consumers have been aided by a tight jobs market and some solid real wage gains, and at the same time we're seeing some real progress on the inflation front
Eric Freedman,
chief investment officer of US Bank Wealth Management
Yet many strategists remain bearish, wary of shortfalls during the continuing earnings season to surprises in the durability of inflation.
Sunitha Thomas, senior portfolio manager at Northern Trust, believes inflation will prove more stubborn than expected and has cut exposure to equities in recent months.
“We've been telling clients that the market has had a very good run for some very good reasons, but now it's a good time to rebalance,” she said.
Rising valuations have been another concern, with the S&P 500 now trading at 20.8 times forward earnings, from around 16 times at the start of the year.
However, Christopher Tsai, chief investment officer of Tsai Capital, is not worried about buying into an overvalued market.
He has added eight companies to his portfolio this year, including index provider MSCI and animal health company Zoetis, that he believes have been overlooked in the market's advance.
“It's hard to find names that are massively overvalued,” he said.
The Bio
Favourite place in UAE: Al Rams pearling village
What one book should everyone read: Any book written before electricity was invented. When a writer willingly worked under candlelight, you know he/she had a real passion for their craft
Your favourite type of pearl: All of them. No pearl looks the same and each carries its own unique characteristics, like humans
Best time to swim in the sea: When there is enough light to see beneath the surface
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
UAE currency: the story behind the money in your pockets
Like a Fading Shadow
Antonio Muñoz Molina
Translated from the Spanish by Camilo A. Ramirez
Tuskar Rock Press (pp. 310)
EXPATS
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How much of your income do you need to save?
The more you save, the sooner you can retire. Tuan Phan, a board member of SimplyFI.com, says if you save just 5 per cent of your salary, you can expect to work for another 66 years before you are able to retire without too large a drop in income.
In other words, you will not save enough to retire comfortably. If you save 15 per cent, you can forward to another 43 working years. Up that to 40 per cent of your income, and your remaining working life drops to just 22 years. (see table)
Obviously, this is only a rough guide. How much you save will depend on variables, not least your salary and how much you already have in your pension pot. But it shows what you need to do to achieve financial independence.
The years Ramadan fell in May
Mohammed bin Zayed Majlis
The bio
Job: Coder, website designer and chief executive, Trinet solutions
School: Year 8 pupil at Elite English School in Abu Hail, Deira
Role Models: Mark Zuckerberg and Elon Musk
Dream City: San Francisco
Hometown: Dubai
City of birth: Thiruvilla, Kerala
Killing of Qassem Suleimani
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
Zayed Sustainability Prize
UAE currency: the story behind the money in your pockets
SPEC%20SHEET%3A%20APPLE%20IPAD%20PRO%20(12.9%22%2C%202022)
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KILLING OF QASSEM SULEIMANI
The Lowdown
Kesari
Rating: 2.5/5 stars
Produced by: Dharma Productions, Azure Entertainment
Directed by: Anubhav Singh
Cast: Akshay Kumar, Parineeti Chopra
'C'mon C'mon'
Director:Mike Mills
Stars:Joaquin Phoenix, Gaby Hoffmann, Woody Norman
Rating: 4/5
More coverage from the Future Forum
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
Results
5pm: Al Maha Stables – Maiden (PA) Dh80,000 (Turf) 1,600m; Winner: Reem Baynounah, Fernando Jara (jockey), Mohamed Daggash (trainer)
5.30pm: Wathba Stallions Cup – Maiden (PA) Dh70,000 (T) 1,600m; Winner: AF Afham, Tadhg O’Shea, Ernst Oertel
6pm: Emirates Fillies Classic – Prestige (PA) Dh100,000 (T) 1,600m; Winner: Ghallieah, Sebastien Martino, Jean-Claude Pecout
6.30pm: Emirates Colts Classic – Prestige (PA) Dh100,000 (T) 1,600m; Winner: Yas Xmnsor, Saif Al Balushi, Khalifa Al Neyadi
7pm: The President’s Cup – Group 1 (PA) Dh2,500,000 (T) 2,200m; Winner: Somoud, Adrie de Vries, Jean de Roualle
7.30pm: The President’s Cup – Listed (TB) Dh380,000 (T) 1,400m; Winner: Haqeeqy, Dane O’Neill, John Hyde.
Gran Gala del Calcio 2019 winners
Best Player: Cristiano Ronaldo (Juventus)
Best Coach: Gian Piero Gasperini (Atalanta)
Best Referee: Gianluca Rocchi
Best Goal: Fabio Quagliarella (Sampdoria vs Napoli)
Best Team: Atalanta
Best XI: Samir Handanovic (Inter); Aleksandar Kolarov (Roma), Giorgio Chiellini (Juventus), Kalidou Koulibaly (Napoli), Joao Cancelo (Juventus*); Miralem Pjanic (Juventus), Josip Ilicic (Atalanta), Nicolo Barella (Cagliari*); Fabio Quagliarella (Sampdoria), Cristiano Ronaldo (Juventus), Duvan Zapata (Atalanta)
Serie B Best Young Player: Sandro Tonali (Brescia)
Best Women’s Goal: Thaisa (Milan vs Juventus)
Best Women’s Player: Manuela Giugliano (Milan)
Best Women’s XI: Laura Giuliani (Milan); Alia Guagni (Fiorentina), Sara Gama (Juventus), Cecilia Salvai (Juventus), Elisa Bartoli (Roma); Aurora Galli (Juventus), Manuela Giugliano (Roma), Valentina Cernoia (Juventus); Valentina Giacinti (Milan), Ilaria Mauro (Fiorentina), Barbara Bonansea (Juventus)
Zayed Sustainability Prize
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Results
Ashraf Ghani 50.64 per cent
Abdullah Abdullah 39.52 per cent
Gulbuddin Hekmatyar 3.85 per cent
Rahmatullah Nabil 1.8 per cent
SHAITTAN
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The years Ramadan fell in May
Zimbabwe v UAE, ODI series
All matches at the Harare Sports Club
- 1st ODI, Wednesday, April 10
- 2nd ODI, Friday, April 12
- 3rd ODI, Sunday, April 14
- 4th ODI, Sunday, April 16
Squads:
- UAE: Mohammed Naveed (captain), Rohan Mustafa, Ashfaq Ahmed, Shaiman Anwar, Mohammed Usman, CP Rizwan, Chirag Suri, Mohammed Boota, Ghulam Shabber, Sultan Ahmed, Imran Haider, Amir Hayat, Zahoor Khan, Qadeer Ahmed
- Zimbabwe: Peter Moor (captain), Solomon Mire, Brian Chari, Regis Chakabva, Sean Williams, Timycen Maruma, Sikandar Raza, Donald Tiripano, Kyle Jarvis, Tendai Chatara, Chris Mpofu, Craig Ervine, Brandon Mavuta, Ainsley Ndlovu, Tony Munyonga, Elton Chigumbura
Our legal consultants
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
The biog
Favourite films: Casablanca and Lawrence of Arabia
Favourite books: Start with Why by Simon Sinek and Good to be Great by Jim Collins
Favourite dish: Grilled fish
Inspiration: Sheikh Zayed's visionary leadership taught me to embrace new challenges.
More from Neighbourhood Watch:
Recent winners
2002 Giselle Khoury (Colombia)
2004 Nathalie Nasralla (France)
2005 Catherine Abboud (Oceania)
2007 Grace Bijjani (Mexico)
2008 Carina El-Keddissi (Brazil)
2009 Sara Mansour (Brazil)
2010 Daniella Rahme (Australia)
2011 Maria Farah (Canada)
2012 Cynthia Moukarzel (Kuwait)
2013 Layla Yarak (Australia)
2014 Lia Saad (UAE)
2015 Cynthia Farah (Australia)
2016 Yosmely Massaad (Venezuela)
2017 Dima Safi (Ivory Coast)
2018 Rachel Younan (Australia)
Killing of Qassem Suleimani
MATCH INFO
Uefa Champions League semi-final, first leg
Bayern Munich v Real Madrid
When: April 25, 10.45pm kick-off (UAE)
Where: Allianz Arena, Munich
Live: BeIN Sports HD
Second leg: May 1, Santiago Bernabeu, Madrid
Mohammed bin Zayed Majlis
Series information
Pakistan v Dubai
First Test, Dubai International Stadium
Sun Oct 6 to Thu Oct 11
Second Test, Zayed Stadium, Abu Dhabi
Tue Oct 16 to Sat Oct 20
Play starts at 10am each day
Teams
Pakistan
1 Mohammed Hafeez, 2 Imam-ul-Haq, 3 Azhar Ali, 4 Asad Shafiq, 5 Haris Sohail, 6 Babar Azam, 7 Sarfraz Ahmed, 8 Bilal Asif, 9 Yasir Shah, 10, Mohammed Abbas, 11 Wahab Riaz or Mir Hamza
Australia
1 Usman Khawaja, 2 Aaron Finch, 3 Shaun Marsh, 4 Mitchell Marsh, 5 Travis Head, 6 Marnus Labuschagne, 7 Tim Paine, 8 Mitchell Starc, 9 Peter Siddle, 10 Nathan Lyon, 11 Jon Holland
MATCH INFO
Maratha Arabians 107-8 (10 ovs)
Lyth 21, Lynn 20, McClenaghan 20 no
Qalandars 60-4 (10 ovs)
Malan 32 no, McClenaghan 2-9
Maratha Arabians win by 47 runs
In the Restaurant: Society in Four Courses
Christoph Ribbat
Translated by Jamie Searle Romanelli
Pushkin Press
if you go
The flights
Emirates have direct flights from Dubai to Glasgow from Dh3,115. Alternatively, if you want to see a bit of Edinburgh first, then you can fly there direct with Etihad from Abu Dhabi.
The hotel
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Located in the heart of Mackintosh's Glasgow, the Dakota Deluxe is perhaps the most refined hotel anywhere in the city. Doubles from Dh850
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Events and tours
There are various Mackintosh specific events throughout 2018 – for more details and to see a map of his surviving designs see glasgowmackintosh.com
For walking tours focussing on the Glasgow Style, see the website of the Glasgow School of Art.
More information
For ideas on planning a trip to Scotland, visit www.visitscotland.com
THE SPECS
Touareg Highline
Engine: 3.0-litre, V6
Transmission: 8-speed automatic
Power: 340hp
Torque: 450Nm
Price: Dh239,312
pakistan Test squad
Azhar Ali (capt), Shan Masood, Abid Ali, Imam-ul-Haq, Asad Shafiq, Babar Azam, Fawad Alam, Haris Sohail, Imran Khan, Kashif Bhatti, Mohammad Rizwan (wk), Naseem Shah, Shaheen Shah Afridi, Mohammad Abbas, Yasir Shah, Usman Shinwari
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Company%20profile
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The five pillars of Islam
UAE currency: the story behind the money in your pockets
The specs: 2019 Chevrolet Bolt EV
Price, base: Dh138,000 (estimate)
Engine: 60kWh battery
Transmission: Single-speed Electronic Precision Shift
Power: 204hp
Torque: 360Nm
Range: 520km (claimed)
