UBS On-Air: Market Moves Top of the Morning: CEO Macro Briefing Book - 4Q25 update
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Nov 3, 2025 Paul Hsiao, Asset Allocation Strategist at UBS, shares his insights on the market and macroeconomic landscape heading into Q4 2025. He discusses the impressive momentum in U.S. equities and addresses concerns about valuations, especially influenced by the MAG-7 stocks. Paul also examines the implications of upcoming government policies on small businesses and highlights the likely shift towards pro-growth strategies. Additionally, he explores the evolving monetary policy landscape and its impact on market expectations.
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Reflation Regime Returned
- The U.S. economy moved from a mid-year growth scare back toward a reflation regime with rising GDP and prices.
- Reflation supports risk assets and explains the recent upward momentum in equities.
Earnings, Not Just Sentiment, Fueling Rally
- Parts of the S&P and Nasdaq look stretched but earnings — led by MAG-7 names like NVIDIA — materially support current valuations.
- Earnings surprises and concentrated revenue gains distinguish today's rally from 2001-style bubbles.
Watch Policy And Fed Leadership
- Monitor DC policy and Fed leadership as they can amplify dovish monetary policy and growth support into 2026.
- Watch for Fed leadership changes that could make rate cuts more likely and influence markets.