UBS House View Monthly Base

Also Interesting

• Euro area economic outlook
• COVID-19 market scenarios
• Gold Reaches Another All-Time High

Asset allocation

Global equities have rallied by around 10% since the beginning of the year, fully recovering last December's sell-off, as fears of an imminent recession have faded – rightly so in our view. Still, stock valuations, as measured by the price-earnings-ratio, are just around the long-term average and US company earnings growth was above 10% in Q4 2018. Supportive factors, such as a more dovish stance by the US central bank and positive market momentum, remain in place, and we maintain our overweight in global equities versus bonds. Meanwhile, the global growth outlook has weakened in recent months and global trade risks persist, despite tentative signs of improvement lately. We continue to manage tactical downside risks with stock options and are currently holding a put on the S&P 500.