Every indexed document

corporate earnings could drop by 5–10% over

leading to further downside for Swiss financials and the exportfocused

providing relief to Swiss financials as well as

the PE-ratio of the market is relatively high compared to the global average

we expect the currency impact to gradually become less of a

and we would expect earnings growth of 5–8% over 12 months.

helping the Materials and Energy sectors to lead the market higher. The market could re-rate

the profitability of the domestic operations could be negatively affected by the

earnings could fall by 10% to 15% from current levels until year-end

and the debt crisis leads to severe pressure on Spain and Italy. In a

the ongoing risks stemming from the sovereign debt crisis lead us to the view that Eurozone

but we see this as still too high against the weak economic backdrop.

we forecast the price-to-earnings ratio (P/E) of the S&P 500 to rise to about 14.0x

which leads us to be neutral on Financials

we keep our preference for IT due to a solid earnings outlook and strong

as valuation looks expensive relative to world

or a surge in inflation that forces the PBoC to significantly tighten monetary policy.

causing a slump in Chinese exports. Other risks include a sharp decline in Chinese

i.e. a hard landing of the economy. This could be triggered by a global

including possibly an acceleration of infrastructure investments