Upcoming rate hikes and US election weigh on S&P 500 - Unicredit

Research Team at Unicredit, notes that the S&P 500 shows very high valuations and weak earnings growth against the background of reduced consensus GDP growth expectations.

Key Quotes

“In our view, a decline towards the lower end of the 2014/15 trading range is much more likely than a break out on the upside, due to a lack of strong enough positive impulses in the near term.

The rising probability of a June/July Fed rate hike should be weighing on US equities. So should the rising uncertainty about future US policy ahead of the US elections. The further decline in the S&P 500 that we expect as we move into the summer months is in line with our view that there will be continued weakness in Eurozone equities.”