UBS On-Air: Market Moves

Alejo Czerwonko joins our 1285 podcast studio to share his recent exciting news of being named to the World Economic Forum’s Young Global Leaders program. Listen as Alejo explains how his work here at the UBS Chief Investment Office, along with his roles in academia and global think tanks, will shape his contributions to the program, plus what he plans to take away and apply from the experience. Featured is Alejo Czerwonko, Chief Investment Officer for Emerging Markets Americas, UBS Chief...

Chief Investment Officer Mark Haefele and colleagues from around the world discussed the implications of the recent events in the global banking sector for central banks, economies and markets.

Early March export data from South Korea showed a fairly large drop in exports, led by weakness to China. The fact that developed economy consumers have been prioritising service sector spending over goods spending is well established—and record global manufacturing supply is meeting slowing goods demand. However there are some signs that a floor may be close.

We take inventory of market performance as the banking crisis has unfolded over the past two weeks and explore how the developments might impact central bank policy and the macro environment. We also spend time outlining CIO’s latest positioning guidance, plus explain what to do and what not to do during periods of market volatility. Featured is Jason Draho, Head of Asset Allocation Americas, UBS Chief Investment Office. Host: Daniel Cassidy

We outline views on equity market performance drivers, themes, as well as positioning across sectors and regions. Featured are Nadia Lovell, Senior US Equity Strategist with the UBS Chief Investment Office, and Brad Neuman, Director of Market Strategy with Fred Alger and Company. Host: Daniel Cassidy

Recent events emphasized that the fourth industrial revolution is revolutionary. Social media has meant that any company’s reputation and brand has become exponentially more important. This emphasizes the importance of a strong corporate culture—having the right person, in the right job, at the right time—requiring employment free from prejudice.

Our conversation recaps what was a volatile week in the markets, include the latest developments surrounding US banks and how this crisis differs from what was experienced in 2008. We also touch on the implications of these developments within the banking sector to the course for Fed monetary policy and CIO’s investment outlook. Featured is Danny Kessler, Asset Allocation Strategist Americas, UBS Chief Investment Office. Host: Shiavon Chatman

The ECB raised interest rates 0.5%, and signalled that future policy would be data-dependent. One would hope that in any well-run central bank, policy would always be data dependent. ECB President Lagarde was asked about the role of profits in driving inflation—the answer was not terribly insightful. Raising rates should tackle profit-led inflation, but it is an unnecessarily destructive way of achieving that goal.

Join the CIO fixed income team every other month for a discussion around the drivers behind asset class trends and performance, positioning and a near-term outlook. Leslie Falconio, Head of Taxable Fixed Income Strategy, moderates a panel which includes insights from Senior Fixed Income Strategists Barry McAlinden, Frank Sileo and Alina Golant, along with Senior Municipal Strategist, Kathleen McNamara.

In the wake of developments across the US and European banking systems over the past week, my guests offer perspectives and positioning guidance through both an equity and credit lens. Featured are Elena Guglielmin, CIO Financials Credit Analyst, and Sacha Holderegger, CIO Financials Equity Sector Strategist. Host: Daniel Cassidy

Last week’s US bank runs were effectively the first of the social media age. In 2008, Twitter barely existed. The glories of Instagram and TikTok lay far in the future. US bank runs and European financial sector noise highlight the increased importance of reputation—if you have to explain on social media, you have already lost the argument. All companies have to worry about reputation risk in the modern world, but it is especially important for banks.

David Lefkowitz, Head of Equities Americas, Brad Ball, US Financials Sector Strategist, and Leslie Falconio, Head of Taxable Fixed Income Strategy Americas, discuss the latest developments in the wake of the collapse of Silicon Valley Bank and Signature Bank, the broader market and economic impact, and investment implications moving forward.

During the UK’s brief Truss debacle, the Bank of England stepped in to offer liquidity to a financial system battered rising bond yields. Having dealt with the liquidity crisis, the BoE went on to raise rates in a measured manner. Investors have to consider whether the Federal Reserve will now learn King’s English, spell the word “labour” correctly, and follow the UK precedent with a rate rise this month.

Financial markets were waiting for today’s US consumer price inflation data with unseemly enthusiasm, but now have become completely distracted by last week’s bank failures. In the real world, the cost of living (for which consumer price inflation is a very poor proxy) probably matters more to people.

Our conversation outlines how the federal government has been responding to fluid developments surrounding regional bank failures in recent days and what the road ahead might look like. We also recap President Biden’s 2024 budget proposal and next-steps, along with preview an upcoming meeting between House Speaker Kevin McCarthy and the President of Taiwan. Featured is Shane Lieberman, Federal Affairs Manager, UBS US Office of Public Policy. Host: Daniel Cassidy

In the wake of second largest bank collapse in US history last week, we discuss the near-term market implications, as well as those to the broader US economy and to the course for monetary policy from the Fed. We also cover portfolio positioning guidance for the near-to-medium term. Featured is Jason Draho, Head of Asset Allocation Americas, UBS Chief Investment Office. Host: Daniel Cassidy

The failure and bailout of two US banks raise two near-term economic questions: will lending standards tighten in the US (and elsewhere); and if standards do tighten, does that matter to markets?

Featured are David Lefkowitz, Head of Equities Americas, Leslie Falconio, Head of Taxable Fixed Income Strategy Americas, and Brad Ball, US Financials Sector Strategist, UBS Chief Investment Office. Host: Anthony Pastore

Our conversation recaps the February employment report and this week’s release of the Fed Beige Book. We also discuss the health of the US labor market, takeaways for Fed Chairman Powell’s Congressional testimony and other notable data releases from the past week. Plus, preview what you can expect in the week ahead. Featured is Brian Rose, Senior Economist Americas, UBS Chief Investment Office. Host: Shiavon Chatman

Putting aside the sensationalism that surrounds a US employment report, what is really happening to the US labor market? First, it is hard to describe nearly two years of catastrophically negative real wages as a “tight” labor market. Tightness should be judged by outcomes. Second, the defining feature of the US labor market has been churn. Only one third of California’s “temporary” unemployed workers returned to their original employer. Filling vacancies with external workers is more...