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"July started out promising for the US equity market Bears, as [the S&P 500] traded below its 200 day moving average for the first time since October 2014," UBS strategist Julian Emanuel said in a note to clients on Friday.
"Combined with a "no" vote from the Greek people on continued European austerity and a Chinese equity market in the midst of a 35% plunge from the mid- June highs, further US market downside looked inevitable," he continued.
"However, much like Marlon Brando's prizefighting character Terry Malloy, the Bears are bloodied and have little to show for their tenacity of recent weeks," he said. "The European situation is becalmed as volatility crashes, rallying stocks across the Continent ... And in China, UBS economist Tao Wang's view that the recent equity market decline is not a reflection of current or prospective material economic weakness has been reinforced by this week's 7.0% 2Q GDP report."
The S&P 500 closed Thursday at 2,124, down just 0.4% from its all-time high of 2,134.
Emanuel and his team of "steadfast US equity market bulls" have a 2,225 year-end target for the S&P 500.
UBS