UBS downgrades US stock markets as investors turn to emerging markets

UBS Group, one of the world's largest financial houses, has downgraded its allocation rating on United States equities to "neutral," while maintaining an "overweight" stance on emerging market stocks, according to a report released by the group on Feb 27.

The report recommends that investors allocate more to other global equity assets rather than U.S. stocks. Market fund flows this year also show that a growing number of investors are "leaving the U.S." and turning to more attractive emerging market equities, the report said.

UBS analysts said the drawdown in the United States capital market relative to global markets has reached its highest level in nearly 15 years. They warned that U.S. equities are increasingly likely to underperform broader global markets.

Data from Goldman Sachs Group show that United States stocks are experiencing their weakest start to a year since 1995.

Since the beginning of this year, the exchange traded fund iShares MSCI ACWI ex U.S. ETF, which tracks developed and emerging markets outside the United States, has risen more than 9 percent. In comparison, the S and P 500 has gained only 0.3 percent over the same period.

Goldman Sachs analysts said earlier in February that hedge funds have been net sellers of United States equities for four consecutive weeks, with the pace of selling reaching its fastest level since the United States government imposed reciprocal tariffs last year.

Separate data from the London Stock Exchange Group and its analytics arm Lipper show that United States investors have withdrawn 52 billion United States dollars from domestic equities so far this year, marking the fastest pace of outflows since 2010.

Capital flow trends suggest that United States equities are becoming less attractive to investors, while emerging markets are drawing increased interest. Since the start of the year, approximately 26 billion United States dollars has flowed from United States investors into emerging market equities.

UBS and other institutions pointed to repeated tariff adjustments, pressure on allies, high federal debt levels and periodic government shutdown risks as factors weighing on investor confidence. They said elevated policy uncertainty in the United States has been a key reason for the market's relative underperformance.

In contrast, emerging market economies are showing stronger growth potential and greater policy clarity, providing investors with clearer expectations and reinforcing a broader shift toward more diversified global asset allocation.

UBS downgrades US stock markets as investors turn to emerging markets

UBS downgrades US stock markets as investors turn to emerging markets

UBS downgrades US stock markets as investors turn to emerging markets

Chinese Premier Li Qiang on Thursday presided over a State Council executive meeting that studied work on building a unified national market and reviewed and approved a plan for the development of a modern emergency response system during the 15th Five-Year Plan period (2026-2030).

Noting that building a unified national market is essential to advancing high-quality development, the meeting called for deepening institutional frameworks in areas such as property rights protection, market access, fair competition, social credit and market exit mechanisms.

The meeting also urged efforts to advance high-standard connectivity of market infrastructure to facilitate smooth economic circulation and effectively reduce logistics costs across society.

Emergency management is critical to protecting people's lives and property, the meeting said. It called for accelerating the development of a modern emergency response system, deepening reform and innovation in emergency management, and improving coordinated response mechanisms.

Efforts should be made to strengthen risk prevention at the source, enhance monitoring, forecasting and early warning, and accelerate a shift in governance toward proactive prevention, according to the meeting.

A draft revision of the Law on the People's Bank of China was also discussed and approved in principle at the meeting, which decided to submit the draft to the Standing Committee of the National People's Congress for deliberation.

Chinese premier chairs State Council executive meeting