U.S. Mobility is Rising, And UBS Says That’s Good for Stocks

(Bloomberg) -- The reopening of a number of big U.S. states should support an uptrend in mobility and activity, bringing potential gains for equities, according to UBS Group AG.

Investors are scouring location tracking data from smartphones and mapping devices, published by companies including Apple Inc, Alphabet Inc’s Google, and TomTom NV, for signs of whether people are starting to resume normal life as the pandemic eases. A recent improvement in the data is a positive signal for stocks, head of U.S. equity strategy Keith Parker said in a June 3 research note.

Loosening restrictions over coming weeks in populous states like New York and California are “supportive of increased activity -- and thus equities -- based on big jumps in mobility seen after re-openings,” the note said. That means stocks can keep going higher from here, or at least “sustain” prevailing levels, Parker said by telephone on June 4.

Global stocks have rallied strongly over the past three weeks, taking the MSCI All-Country World Index’s gains from its mid-March low close to 40%. Unprecedented monetary and fiscal stimulus and a staggered reopening of the global economy has raised hopes of a recovery to offset the effects of the coronavirus lockdowns.

Still, Parker doesn’t see a complete all-clear for equities.

“The level of global activity is down about 37.5% and eventually the level should matter,” he wrote.

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