UBS venter stigende aktiekurser i USA i 2020

Investors are faced with a number of market risks. The most obvious one stems from the US/China trade war, where a short-term ceasefire seems likely but major improvements less likely due to ideological differences and China’s political ambitions. We expect slower Chinese growth as the shift from exports to internal consumption continues. UK corporate investments have already slowed ahead of Brexit, creating pent-up demand. However, recovery potential is likely limited as consumers have not been overly cautious.

Asset prices could be boosted in the run up to the 2020 US presidential election given Trump’s preoccupation with equity market returns. Central banks are expected to remain supportive and short-term interest rates will likely continue falling, supporting equity valuations. We expect downgrades to 2019 earnings and believe current 2020 EPS estimates look ambitious. As stock pickers, we focus on companies where the earnings growth potential is driven by company-specific factors or secular growth, rather than being reliant on cyclical factors that are out of the company’s control.