Good news, at a price

UBS House View «March 2019»

A long chairlift ride in the Swiss Alps gives time to ponder how policymakers’ recently dovish comments have been a lot like the snow reports skiers crave. A forecast for snow is great, but you never know how much snow you’re going to get or how long it will last. 2019 has seen the best start to the year for global equities since 1991. The question now is whether valuation multiples can still expand given that some good news has been priced in, yet a number of key market risks remain.

We still see drivers for further upside. Global economic growth looks strong enough to support corporate profits, but not at levels that will trigger inflation or much tighter monetary policy. And, historically, during periods of low inflation and low unemployment like we have today, US equity valuations have been higher than the long-term average and prevailing levels. This backdrop should support equity valuations over our tactical horizon.

UBS House View Investors Guide

Our publication "UBS House View" gives you a compact overview of UBS's opinions on the financial markets. Drawing on our global investment and research capabilities, it aims to offer you the best, most up-to-date investment guidance.

 

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