Canaccord Genuity analyst Arun Melmane in a note to clients on Tuesday struck a brighter tone, writing that "The capital story for UBS is coming along strongly," as the company's fully-implemented Basel III Tier 1 common equity ratio was 11.9% as of Sept. 30.
Melmane rates UBS a "buy."
"The ROE target being potentially postponed by 1 year, we view as less of a worry for the investment case. We see the capital level within UBS as still excessive for a restructured bank with a focus on wealth management with constrained
Market Upbeat on Fed Policy
Back home, the broad indices all ended higher on Tuesday, as the Federal Open Market Committee began its two-day meeting. The FOMC will release its statement on Federal Reserve policy Wednesday afternoon. The committee surprised many economists and investors by deciding to make no change in the central bank's "QE3" stimulus policy, which includes net month purchases of $85 billion in long-term bonds.The bond purchases have continued since last September. In light of the partial shutdown of the federal government during the first half of October and some negative economic reports, most economists this time around believe the FOMC will stand pat again, since there's no compelling sign of accelerating economic growth in the United States. Still, most economic reports on Tuesday were positive. The Commerce Department said retail sales increased by 0.4% in September, excluding auto sales. That figure matched the consensus forecast among economists surveyed by Thomson Reuters. Then again, retail sales including autos were down 0.1% in September, against expected growth of 0.4% among economists. The S&P Case-Shiller home price index beat expectations, climbing 0.9% in August from July, ahead of an expected increase of 0.7%. Home prices were up 12.8% from a year earlier, which was the largest increase since 2006. The Conference Board on Tuesday said the Consumer Confidence index had dropped to 71.2 in October from 80.2 in September, below economists expectation of a reading of roughly 74.3. "Consumer confidence deteriorated considerably as the federal government shutdown and debt-ceiling crisis took a particularly large toll on consumers' expectations," said Conference Board Director of Economic Indicators Lynn Franco, in a statement. While similar declines have been seen following other disruptive federal government events, Franco expects continued volatility for the index, "given the temporary nature of the current resolution."