UBS(US:UBS) Mei Ri Jing Ji Xin Wen·2025-04-07 07:34Group 1 - The market is warned of a potential "Black Monday" reminiscent of the 1987 crash, with significant declines in major indices [1][3] - On April 4, the S&P 500 index fell nearly 6%, marking its largest single-day drop since March 16, 2020, and is down 17% from its February peak [1] - The Dow Jones Industrial Average dropped 5.5%, the largest single-day decline since June 11, 2020, while the Nasdaq Composite fell 5.82%, entering a technical bear market with a cumulative drop of over 20% from its December peak [1] Group 2 - Despite the recent declines, U.S. stock valuations remain significantly overvalued, with the Buffett Indicator at 170%, exceeding the historical trend line by 34.5 percentage points [2][6] - The Buffett Indicator measures the ratio of U.S. stock market capitalization to GDP, with the current Wilshire 5000 index at $50.559 trillion and the latest annualized GDP at $29.724 trillion [6] - UBS downgraded U.S. stocks from "attractive" to "neutral," citing potential economic recession and significant market declines if tariffs are not addressed [12] Group 3 - The possibility of a market circuit breaker is being discussed, which would halt trading if the S&P 500 index falls by certain thresholds [8][9][10] - The thresholds for circuit breakers are set at 7% (level 1), 13% (level 2), and 20% (level 3) declines, with specific point levels identified for the S&P 500 [11] Group 4 - Market expectations for Federal Reserve interest rate cuts have increased from three to five times within the year, with the next cut anticipated in May [14] - UBS forecasts U.S. GDP growth to slow to below 1%, with potential recession risks and inflation impacts from tariff policies complicating Fed decisions [14]