UBS identifies a trigger that could spark a stock market sell-off in the second half

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UBS said that many analysts predicted that stocks would be at risk in 2023, and the catalyst for a potential downturn may now be in sight.

Equities could sell off in the coming weeks due to several factors, including weak global growth and poor company earnings, according to UBS strategists. They said that many market analysts — including their own — predicted that a recession and weaker earnings would put stocks at risk in 2023, and the catalyst for a potential downturn may now be in sight.

Matthew Mish, head of credit strategy at the bank, noted that UBS' latest research had noticed an uptick in factors that could worsen credit conditions. "We're watching credit ratings migration, and May to date seems to be the worst month that we've seen in at least 18 months in terms of downgrades to CCC as well as D or defaults," Mish told the bank's clients in a presentation earlier this month.

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