UBS On-Air: Market Moves

Yesterday’s German and Spanish consumer price inflation was lower than markets had expected, and the figures fit with the idea that profit-led inflation is coming to an end. Profit-led inflation works until it does not—once consumers realize price increases are less about fairness and more about margin expansion, they use the force of their spending power and form a rebel alliance. Companies then have to scramble to shore up customer loyalty.

Kevin Dennean joins us in-studio to explain the opportunity set behind the new Tactical US Equity Theme, ‘Select semis’, from the UBS Chief Investment Office. We also cover the cyclicality of semiconductor revenue growth, industry risks, current demand trends, and more. Featured is Kevin Dennean, Technology and Communications Services Analyst Americas, UBS Chief Investment Office. Host: Daniel Cassidy

A monthly check on US equity market performance and positioning considerations with Jeremy Zirin, Senior Portfolio Manager, and Head of the Private Client US Equity Team, and Dominic Schagar, Lead Equity Investment Specialist with UBS Asset Management.

We get Spanish and German preliminary November consumer price inflation data today. Spanish data is expected to be stable, with a little more disinflation in Germany. Markets have, perhaps, recently become used to the idea that consumer price inflation surprises by being lower than expected. Durable goods price disinflation and resistance to profit-led inflation should push down on the headline number, but fading energy subsidies should slow disinflation forces in the coming months.

Hosted by Liam McCormick, Senior Strategist, UBS Family Advisory and Philanthropy Services

The extension of the ceasefire in the Israel-Hamas war is, of course, primarily a humanitarian concern. Investors may interpret this as lessening the risks that the conflict broadens to the wider region.

After a quiet holiday week, investors are gearing up for the final few weeks of the year. We discuss what this final stretch might have in store for the markets and how that sets the stage for 2024. Plus, thoughts on the US consumer and the holiday spending season. Featured is Jason Draho, Head of Asset Allocation Americas, UBS Chief Investment Office. Host: Daniel Cassidy

ECB President Lagarde testifies before the European Parliament. A central bank head speaking to the legislature is something markets often care about, but we hear so frequently from Lagarde that the chances of her saying anything original are very low.

With US consumers consuming, the day ahead for markets looks subdued. ECB President Lagarde is speaking, but this is the fourth time in two weeks we have heard from Lagarde. It seems unlikely that she will add anything markets care to hear.

US consumers are gearing up for the most important celebration on the national calendar; Black Friday sales. Increasing consumer awareness of profit-led inflation may shift focus from flashy headline discount numbers to the question “is this price lower than it was a year ago?”. Deflation of durable goods means that for big ticket items the answer is probably “yes”.

Since the COVID pandemic of 2020, we’ve entered a new world: One defined by economic, social and political uncertainty - but also profound technological change. 2023 was a historic year for markets. Bond yields reached their highest level in more than 15 years. The first trillion-dollar artificial intelligence company was crowned. And the US economy powered ahead, confounding expectations. What can we expect in the year and decade ahead?

Hear from top portfolio managers and business heads from UBS Asset Management’s Muni, Taxable Fixed Income and Liquidity teams. Together, they provide views on markets and what they believe you should be focused on within the fixed income space.

Central bankers keep stressing rates will stay high—the Federal Reserve minutes signalled much the same message. Markets are not paying attention. There is a sense that central bankers are trying to manipulate the bond market vigilantes—but bond traders are like three-year olds at a party who are high on sugar and will not be controlled. Investors are increasingly looking at the disinflationary details of advanced economy consumer prices and speculating on rate cuts having to come sooner.

Our conversation spotlights the landscape for climate-related lawsuits, including recent developments within California and across the globe. Featured is Amantia Muhedini, Sustainable & Impact Investing Strategist Americas, UBS Chief Investment Office, and Jonathan Bailey, Global Head of ESG & Impact Investing at Neuberger Berman. Host: Daniel Cassidy

The United States does not have a monopoly on fiscal incoherence. Germany’s Federal Constitutional Court banned shuffling money between different projects, prompting a government spending freeze. The German government may have to look back at 2023 and say “that looks like an emergency”; emergencies allow rules to be broken. Meanwhile the EU seems set to declare that most of the EU is breaking or sort-of breaking fiscal rules.

We take inventory of the drivers behind the recent market momentum, including the October inflation data, as well as outline market expectations over the next six weeks as we begin to close out 2023 and look ahead to the new year. Featured is Jason Draho, Head of Asset Allocation Americas, UBS Chief Investment Office. Host: Daniel Cassidy

Dan rejoins the podcast to provide his near-to-medium term outlook for the US economy, monetary policy, and equity markets. We also discuss where Dan is finding opportunity within equities, as well as the risks to be mindful of as we approach the new year and into early 2024. Featured is Dan Suzuki, Deputy Chief Investment Officer at Richard Bernstein Advisors. Host: Daniel Cassidy

The end of this week marks the most important celebration in US consumers’ calendar—the Black Friday sales. This is primarily focused on US consumers spending money they do not have on things they do not need, but online retail and transnational companies have globalized the event somewhat. This year will be interesting as consumers have shifted in favor of having fun rather than buying stuff.

We discuss takeaways from the APEC Summit, namely as it relates to the mending of US-China relations, the deal reached which averted a shutdown of the US government, and an update on the Israel-Hamas War. Featured is Shane Lieberman, Federal Affairs Manager, UBS US Office of Public Policy. Host: Daniel Cassidy

We catch-up on the municipal market with Kathleen McNamara for a performance update and outlook. We also outline some portfolio themes and where to find opportunity within the asset class. Featured is Kathleen McNamara, Senior Municipal Strategist Americas, UBS Chief Investment Office. Host: Daniel Cassidy