- Analytics
- News and Tools
- Market News
- Risk-reward not favour a sustainable rally in equities – UBS
Risk-reward not favour a sustainable rally in equities – UBS
After the 4% gain this past week, the S&P 500 is now up 9% from the 12 October low. Nonetheless, economists at UBS do not expect a sustainable rally in equities in view of the risks.
Pressure on corporate profits will only increase in the coming quarters
“Despite some Fed officials commenting on the potential for a slower pace of rate hikes, we think it is too early to expect a Fed pivot. Inflation remains too high, we think the Fed sees its own credibility at stake, and we expect it to keep hiking aggressively until the official data show inflation is receding. Even when the Fed finally does stop raising rates, it’s worth remembering that monetary policy is likely to remain at restrictive levels for some time.”
“Year-over-year 3Q S&P 500 earnings per share (EPS) growth is tracking below our original 3-5% expectation. With 70% of the S&P 500 market cap having reported earnings, it looks likely that growth will be in the 1-3% range.”
“We believe the pressure on corporate profits will only increase in the coming quarters. As a result, we look for S&P 500 EPS to fall 4% next year to $215. In a full-blown recession, EPS could fall to around USD 200. This compares to bottom-up consensus estimates of $235.”
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.
Bank transfers
