Bhanu Baweja, chief strategist at UBS Investment Bank, forecasts near-term stock gains driven by strong earnings growth, before a reversal expected in 2027. He warns of mounting pressure on corporate margins, which have been the engine behind the post-pandemic equity surge. Consumer spending, representing roughly two-thirds of US GDP, constitutes his primary threat to the stock market rally. Baweja urges investors to adopt defensive positioning now and shift away from high-beta, momentum-driven trades. He warns that the window to take profits and reposition is closing before margin compression shows up in quarterly reports.
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