I maintain Rest of World (RoW) equity should continue to outperform the US. My RoW preferences over the US have been, and remain, Europe, China, Brazil and Mexico (FX un-hedged), helped in part by a weaker USD.
Within the US, my broader bullish view that the October 2022 low was the start of a fresh up-trend remains intact, as does my expectation for SPX at 4,400 before year-end and new highs beyond 4,818 in 2024. But tactically, with SPX stalling near-term at 4,161, DeMark resistance, and with VIX and V2X encroaching on supports (15.83 and 15.34, respectively) and both close to tactical DeMark Buy signals, I suggested on last Friday's close (April 14 at 4,137) to reduce structural SPX longs by a third, taking advantage of these levels of volatility to buy downside SPX protection into mid-June to safeguard the remaining longs, so one has dry powder to add to structural SPX longs into weakness.
- UBS Strategy
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