UBS: investor focus will return to corporate earnings growth

Tension on the Russian-Ukrainian border, foreign media reports that Russia is preparing to invade Ukraine, coupled with investor concerns about rising US interest rates (the yield on the 10-year Treasury note exceeded 2% last week), the S & P 500 index fell 1.8% last Thursday (10th). Fell another 1.9% the next day, led by technology stocks. Global energy prices rose significantly, Brent oil prices continued to rise, and safe havens such as gold and the Swiss franc were supported.

Us President Joe Biden and Russian President Vladimir Putin spoke on the phone for an hour over the weekend, but with no concrete results. The United States warned that if Russia invaded Ukraine, it would trigger a decisive response from the West and bring rapid and serious consequences. Us National Security adviser Sullivan said on Friday that Putin could invade Ukraine at any time, calling on citizens to evacuate as soon as possible, and Britain issued a similar warning. The Ukrainian government has asked Russia to explain in detail its military activities close to its border.

In response, UBS Wealth said that, based on the benchmark scenario, diplomatic mediation eventually cooled tensions, but the process could take as long as months, during which conflicts could break out, as happened in recent days. However, UBS believes that the parties will eventually calculate the very high economic and political costs of the military conflict.

In addition, UBS Wealth said investors should manage downside risks well, such as: 1) diversifying and maintaining long-term investments; 2) hedging geopolitical risks such as commodities; 3) preparing for interest rate hikes; and 4) buying winners who benefit from global economic growth.