UBS: Investors will shift their focus from Middle East issues to economic and earnings fundamentals; US stocks remain attractive.

According to ME News, on April 17th (UTC+8), a UBS research report dated April 16th pointed out that, based on the bank's baseline scenario, a final diplomatic solution to the Middle East conflict will allow investors to refocus on healthy economic and earnings fundamentals. The bank stated that it has consistently viewed global and US equities as attractive throughout the Middle East crisis. The bank expects a strong first-quarter earnings season for US stocks, highlighting an optimistic outlook for corporate profits, with earnings per share projected to grow by 17%, the fastest pace since the fourth quarter of 2021. However, the bank also anticipates a bumpy road to a long-term ceasefire in the Middle East, and even if shipping resumes in the Strait of Hormuz, the global energy market will need time to return to normal. Therefore, we recently raised our Brent crude oil price forecast for the end of June from $90/barrel to $100/barrel. Given the outlook for the energy market, we have become more cautious about equities most sensitive to high fuel costs (including the Eurozone and India), downgrading their rating from "attractive" to "neutral." (Source: ME)