UBS called the rally in global equity markets in early 2023 a fake. Stocks are still under pressure from persistently high inflation and a strong labor market, Business Insider quotes the expert’s opinion.

Since the start of 2023, mainland China’s blue-chip index CSI 300 has jumped 7.34%, while Europe’s Euro Stoxx 50 is up about 8%. The S&P 500 has grown by 2.32%. Stocks were supported by factors including China’s abandonment of its strict zero-tolerance COVID-19 policy and a slowdown in U.S. consumer and industrial inflation, among others.

“But the possibility remains that the rally is a fake out and economic data will ultimately disappoint,” warned Mark Haefele, chief investment officer at UBS Global Wealth Management.

In his opinion, it is too early to consider that the crisis has receded. The expert emphasized that the risk for the market is still the probability that core inflation will be higher than expected.