UBS's Lovell Sees S&P 500 at 4,300 by Year End

The video discusses the shift in consumer spending from goods to services, impacting market segments and inventory. It highlights opportunities in the airline sector due to resilient consumer demand and the return of business travel. The discussion covers factors affecting market indices, such as inflationary pressures, supply chain disruptions, and geopolitical events. The economic outlook suggests a slowdown, with a focus on cooling the labor market to avoid recession. The S&P 500 is expected to have limited upside, driven by earnings expectations and valuation considerations.

What is one reason for the shift in consumer spending from goods to services?

• Consumer preference for experiences

• Faster than expected economic recovery

• Higher service costs

• Increased availability of goods

Why are airlines considered to have a good story to tell despite market challenges?

• They have reduced ticket prices significantly

• They have increased their market share in goods transportation

• They have completely avoided cost pressures

• They have shown resilience and discipline in capacity management

What could potentially drive the market index higher according to the discussion?

• An alleviation in inflationary pressures and resolution of global conflicts

• A rapid rise in inflationary pressures

• A significant drop in airline ticket prices

• A sudden increase in consumer goods demand

What is the expected probability of a recession in the next 12 months?

• Over 50%

• Under 30%

• Exactly 40%

• Between 30% and 50%

What is the year-end price target for the S&P according to the discussion?

• 4500

• 5000

• 4000

• 4300

What is one reason for bringing down earnings expectations?

• Improved supply chain conditions

• Softness in corporate sentiments

• Higher consumer spending

• Increased corporate activity

What is the Federal Reserve's concern if the market goes above a certain level?

• Unwarranted easing of financial conditions

• Increased consumer spending

• Decreased corporate earnings

• Higher inflation rates