UBS on Tuesday raised its forecast for the MSCI All Country World Index (AC) to 830 points by the end of 2024, citing improved market risk appetite, optimism about artificial intelligence, and potential deceleration in U.S. wage growth.
The brokerage's current forecast indicates a 6% "upside" potential for the benchmark index, which measures overall global stock market performance, by the end of this year.
Expectations of monetary policy easing by major central banks, weak global economic data, and enthusiasm for artificial intelligence have supported global stock markets this year.
UBS strategists stated in a report: "The market seems to be transitioning to a stage where it reacts positively to weak data faster than we expected."
Regarding artificial intelligence, UBS added: "If General Artificial Intelligence (GenAI) boosts productivity growth by 1% starting in 2028, the equity risk premium would be 4.7%."
UBS also believes that earnings revisions and the Federal Reserve pausing its interest rate hikes will further support global stock markets.
