While bond markets are signaling rising risks, equity markets have been more positive. As of 1 April, the S&P 500 was up 9% from its 2022 low on 8 March and stood just 5% below its all-time high. Economists at UBS expect the S&P 500 Index to move slightly higher by end-2022 toward 4,700.

Remain selective after equity rebound

“The Russia-Ukraine conflict continues to weigh on the outlook for growth and earnings. Given the recent uncertainty, we scaled back our outlook for global earnings growth to 8% (from 10%) for this year, and to 5% (from 7%) for 2023. We also continue to favor a selective approach to equities, rather than positioning for a broad rally.”

“Our base case is now for only modest upside for stocks, with our year-end forecast for the S&P 500 at 4,700, less than 4% higher than current levels. We also note that periods of heightened volatility and uncertainty often prove to be the best times to find long-term value in stocks.”