Every quarter, the UBS US Sector Specialist team conducts a survey amongst Institutional Investors to gauge their views on the broader market outlook and expected investment returns prior to earnings announcements. Watch the videos to learn more.

Rob O’Dwyer, Financials Sector Specialist

Jason Finkelstein, Consumer Sector Specialist

Allyson Gordon, Industrials and Materials Sector Specialist

Rob Ruple, Technology Sector Specialist

Catherine Gordon, Energy and Resources Sector Specialist

Kelsey Perselay, Telco, Media and Internet Sector Specialist

Sector takeaways

Financials

  • Insurance brokers, alternative asset managers and investment banks are viewed as overvalued
  • This quarter, market response is heightened for stocks that have struggled to meet elevated expectations
  • Investors lack conviction in Banks sub-sector on forward outlook to justify current valuations

 

Consumer

  • Sentiment in the quick-service restaurant sub sector has turned negative as consumers no longer see the value with rising prices
  • More than half of respondents believe Consumer Staples and Consumer Discretionary will continue to underperform the S&P500
  • Household and Personal Care is now viewed as the favored sub sector in Consumer Staples

 

Industrials and Materials

  • Respondents expect steady performance in Industrials and uncertainty in the Materials sector
  • Investors are not expecting Q1 results to materially shift overall 2024 defined positioning
  • Valuation remains a large source of investor discomfort with only 7% of respondents view Industrials as undervalued

Technology

  • Nearly half of investors surveyed anticipate Q1 earnings will come in above expectations, while a third believe tech stocks will outperform the S&P 500
  • Investor conviction remains positive across the Technology sector aligning with industry returns; S&P Tech Index +7% YTD 
  • Software valuation has shifted to undervalued and sentiment remains bullish

 

Energy and Resources

  • 62% of investors anticipate a bullish shift for the Energy sector post earnings  
  • Power stocks are dominating conversations as the AI data center theme remains front and center 
  • Apathy persists in the Renewables sector

 

Telco, Media and Internet

  • AI remains the dominant topic of conversation, as the group of AI winners is up 30% YTD
  • Nearly half of investors believe we are in the early-mid cycle in the AI trade, yet half believe these AI stock names are overhyped
  • Sentiment remains consensus; investors are comfortable in positions and current book compositions are unlikely to change post Q1 earnings results

Disclaimer: The views and opinions expressed in this material are those of the author and are not those of UBS, its subsidiaries or affiliate companies. Accordingly, UBS does not accept any liability over the content of this material or any claims, losses or damages arising from the use or reliance of all or any part thereof.​

This material has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient and is published solely for information purposes. No representation or warranty, either express or implied is provided in relation to the accuracy, completeness or reliability of the information contained herein, nor is it intended to be a complete statement or summary of the developments referred to in this material. The recipient should not construe the contents of this material as legal, tax, accounting, regulatory, or other specialist or technical advice or services or investment advice or a personal recommendation. Not all products and services are available to citizens or residents of all countries. 

Source: 1Q2024 UBS Institutional Investor Sentiment, a survey of 187 institutional investors with a relationship with UBS (of which, 60 TMT investors, 25 Financials investors, 16 Energy/ Utilities investors, 22 Consumer investors, and 44 Industrial and Materials investors). Surveyed March 25 – April 5, 2024. 

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