Here’s Why UBS Just Slashed Its Year-End S&P 500 Target By 100 Points (SPY)

By admin on July 2, 2012

Kill Bill

The S&P has gained 101 percent since it bottomed in March 2009. But most of the rebound came in the early half of this rebound.

In the past two years the market has only climbed 12 percent characterized by “flatter returns with greater volatility”, according to UBS strategist Jonathan Golub.

Golub just slashed his S&P 500 year-end target to 1,375, from 1,475.

There are three main factors behind the downgrade to the S&P 500 price target:

The Supreme Court’s healthcare ruling – The ruling is expected to cause greater partisanship at the year-end fiscal discussions. Last year’s U.S. debt downgrade was extremely troubling for markets.
Disagreement among European policy makers – European authorities agreed to more banking integration, a process to recapitalize Spanish banks, and the potential to use EFSF/ESM to support the market. But a lot of the language is non-committal and there is a rising contentious tone among European policymakers.
Deteriorating U.S. economic data – Key data including nonfarm payrolls is coming in below estimates.

Meanwhile UBS also lowered its 2012 S&P 500 earnings estimates to $ 103.50, from $ 105.00, and $ 110.00 in 2013, from $ 113.00.

There are 4 key reasons behind this change in estimates:

Weaker U.S. economic data – Incoming economic data has missed estimates, most recently the Philly Fed, consumer confidence and initial jobless claims have disappointed. And this is “bleeding into expectations for corporate profits, in the U.S. and abroad”.
Slower growth abroad – Foreign exposure is weighing on corporate results which is important since a third of the S&P 500′s earnings come from abroad.
Strengthening dollar – Given the weaker growth abroad and concerns around the stability of the euro, the dollar has strengthened 5 percent since the start of the second quarter. The euro is expected to fall to 1.15 against the USD by the end of the year.
Financial sector earnings – CDS spreads for the largest financial institutions had widened even before JP Morgan announced its London Whale loss, showing a more challenging trading environment for U.S. investment banks.

But Golub says the most important thing to note is that price multiples (which investors use to gauge how attractive a stock it) are expected to be flat for the rest of the year.

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0 Comments

marco pool

April 30, 2012 at 7:50 pm

runescape.

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Svalentine

April 30, 2012 at 7:52 pm

It’s also an obelisk which is even more of a clue

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KiNGjAyAr

April 30, 2012 at 8:47 pm

No coincidence. A lot of illuminati members are architects n every measurement from ground up and even everything inside their buildings are precise numbers that mean something to them. Follow me on twitter @kingjayar

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Fogman

May 1, 2012 at 12:20 am

It’s just a fuckin building.

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Hueymarley

May 1, 2012 at 2:10 am

that is a coincidence but the illuminati are always on point with there messages

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Aintnobodyme

May 1, 2012 at 7:38 pm

Its just letting us know who was really behind 9-11

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Sharonparkerhurst

May 6, 2012 at 8:31 pm

what is the Illuminati , is it possible to even be real ? please send me any info anyone has on this topic , a lot of christian friends swear it is and of its purpose , i just dont know … sounds like something out of a sci – fi movie ….. thank u , sharon

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Tmanning489

May 7, 2012 at 8:04 pm

I have hurt you, i have hurt you, j have hurt you, i feel you, ifeel you, Im left without words only overwelmed, somethings cant be foregiven, I accept full responsabilty for my wrongs to you, I have been educated on your of conduct, I belong to you, I serve you, Im in over my head I die without you, , please Beloved, I feel you, I will not quit you, I cant change anything that happened, if airplains were shooting stars, wishing wont help, still, all you do is give to me. You want me to feel and now I do! I trust in your wisdom, in all things, I dont quit you, I belong you, I live my dream, I am what you say I am, do you feel me yet beloved?

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Anis_3

May 9, 2012 at 11:26 pm

you fuckin illu beated the world centre , it wasnt alqaida u fool!!

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JustAnotherGuy

May 11, 2012 at 4:41 am

The creation of this website is another plain sight for they take to hide the truth , its a shame this whole website will be used to further us and them so the truth will never be clear .. Just Remember .. You may not be able to control the world around you but you can control what you let enter your mind, be conscious of your surroundings, when you pay closer attention you see everything is not as it seems ..

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Nwehri

May 12, 2012 at 1:14 am

You guys are stupid, its called the “freedom tower” like you said later in the article 1776 is when America gained its freedom from Britain! Stop overlooking everything, jeez.

I agree with Fogman

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Niel

May 13, 2012 at 2:56 pm

somehow, it was designed to gain a shape of a trapezoid… and when the whole building will be analyzed, it gained the shape of an obelisk. i think it’s more of a coincidence. 1776′s the height. well, i think it’s just an ordinary building for ordinary people, but a meaningful building to those who give meaning to it.

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