Q3 equity market outlook
Five charts on the key equity market drivers
Key highlights
Key highlights
- Global equity markets are defying key leading economic indicators
- One year forward P/E expansion has driven the S&P 500 higher, despite analysts cutting earnings forecasts
- A narrow market, supported by artificial intelligence has driven US equity market performance year-to-date
- Individual investor sentiment surveys suggest that investors have become more bullish
Central banks’ efforts to contain inflation are backward-looking and are reigniting fears of a recession
Central banks’ efforts to contain inflation are backward-looking and are reigniting fears of a recession
Manufacturing Purchasing Manager’s Index (PMI)
![Line chart showing Manufacturing Purchasing Manager’s Index (IPM). The line chart shows two lines: Global and Eurozone.](/uk/en/assetmanagement/insights/asset-class-perspectives/equities/articles/q3-2023-equity-market-outlook/_jcr_content/mainpar/toplevelgrid_copy_31/col1/textimage/image.580.png/1698402501856.png)
Equity valuations move higher despite weaking leading indicators
Equity valuations move higher despite weaking leading indicators
Stoxx Europe 600 & S&P 500 P/E NTM
![Line chart showing equity valuation through STOXX Europe 600 and S&P 500 price-to-earnings next twelve months ratio.](/uk/en/assetmanagement/insights/asset-class-perspectives/equities/articles/q3-2023-equity-market-outlook/_jcr_content/mainpar/toplevelgrid_copy_31/col1/textimage_copy/image.580.png/1698402502009.png)
Analysts continue to cut earnings for US stocks
Analysts continue to cut earnings for US stocks
S&P 500 2023e EPS
![Line chart showing earnings per share for companies within the S&P500 from June 2021 to June 2023.](/uk/en/assetmanagement/insights/asset-class-perspectives/equities/articles/q3-2023-equity-market-outlook/_jcr_content/mainpar/toplevelgrid_copy_31/col1/textimage_1405692454/image.580.png/1698402502152.png)
AI stocks drive equity markets higher
AI stocks drive equity markets higher
Price index (rebased to beginning of 2023)
![A line chart showing price index (rebased to beginning of 2023) of the S&P500 and the S&P500 excluding AI(artificial intelligence) stocks.](/uk/en/assetmanagement/insights/asset-class-perspectives/equities/articles/q3-2023-equity-market-outlook/_jcr_content/mainpar/toplevelgrid_copy_31/col1/textimage_1405692454_87492930/image.580.png/1698402502285.png)
Investors have become more bullish
Investors have become more bullish
AAII investor sentiment survey – Bull
![Line charts showing the results of the American Association of Individual Investors survey of investor sentiment towards the stock market, showing bullish](/uk/en/assetmanagement/insights/asset-class-perspectives/equities/articles/q3-2023-equity-market-outlook/_jcr_content/mainpar/toplevelgrid/col1/textimage_1405692454/image.580.png/1698402502477.png)
AAII investor sentiment survey – Bear
![Line charts showing the results of the American Association of Individual Investors survey of investor sentiment towards the stock market, showing bearish](/uk/en/assetmanagement/insights/asset-class-perspectives/equities/articles/q3-2023-equity-market-outlook/_jcr_content/mainpar/toplevelgrid/col2/textimage_1405692454/image.580.png/1698402502571.png)
Make an inquiry
Fill in an inquiry form and leave your details – we’ll be back in touch.
Whether you have a question or a request, we will be happy to get in touch with you. Contact our UBS Asset Management team for more details.
Introducing our leadership team
Meet the members of the team responsible for UBS Asset Management’s strategic direction.