Stocks plunge resets valuations, but recession risk, rates cloud outlook

UBS Economics Experts predict a recession in the second to fourth quarter of this year “as rate hikes push the fragile economy into contraction. “

“With growth deteriorating substantially in Q2/Q3, we assume P/E falls to . Combined with expectations of weaker earnings expectations, this will lower the S&P 50 to 3,25, UBS said, roughly % below current level. Any recession could put more pressure on corporate profits than expected. According to Refinitiv IBES, analysts’ consensus estimate for earnings growth this year is 4.4%. However, during recessions, incomes are reduced by %, according to Ned Davis Research. If the estimate is too optimistic, it means that the price-to-earnings ratio looks high, making the stock look less attractive. The profit picture will start to become clearer as the fourth quarter earnings season kicks off next week. The report should come from the bank 20231000FuGuo bank (New York Stock Exchange: 7967 World Financial Center) and