Asia markets live updates: Fed decision, China LPR

Eight analysts upgraded their target prices on two Canadian stocks in the past week, giving both more than 65% upside potential.

They were the only two companies on CNBC Pro’s global stock screen that have received price target upgrades from five or more analysts in the past seven days, and also have potential upside of over 50%.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Higher-than-expected inflation data sent all three major stock indexes down last week. But UBS believes that these declines are just blips on the radar of a still overwhelmingly positive U.S. outlook.

“Such setbacks in the data may cause some investors to lose confidence in the prospect of a soft landing for the U.S. economy, let alone a Goldilocks scenario. But we view these more like speed bumps along the journey,” wrote Mark Haefele, the bank’s chief investment officer of its global wealth management division.

Haefele listed the following three key reasons as to why he expects the U.S. macro environment to stay fairly healthy:

• “The disinflation trend remains evident.”
• “The labor market is cooling, and growth is returning to a sustainable pace.”
• “The key point for the market outlook is that the Federal Reserve wants to cut rates, even with inflation coming down more gradually than expected a few months ago.”

“Our base case is for a soft landing with three Fed rate cuts this year, a backdrop that is favorable for quality bonds. As growth moderates, we also expect outperformance from quality stocks, those of companies with strong balance sheets, high profitability, and exposure to resilient earnings streams,” Haefele added.

— Lisa Kailai Han

Investors are concerned high market concentration means a pullback is coming for equities, but Goldman Sachs expects a resilient economy and softening inflation will continue to be supportive of stocks.

“As our US strategists have shown, periods of high market concentration and momentum outperformance have generally been followed by ‘catch-up’ rather than ‘catch-down’ episodes, supported by better macro,” Christian Mueller-Glissmann wrote Monday.

“While equity momentum has somewhat supported broader risk appetite … we see limited implications of a continued reversal barring a material US rate shock,” Mueller-Glissmann added.

In fact, Mueller-Glissmann said he would buy any dip in equities. Still, while he remains overweight on equities, he noted there is limited upside to the firm’s near-term price targets.

— Sarah Min