UBS On-Air: Market Moves Top of the Morning: CIO Strategy Snapshot - What’s driving the markets?
Oct 6, 2025
Jason Draho, Head of Asset Allocation for the Americas at UBS, shares his insights on the recent market rally, even amid a U.S. government shutdown. He explores the implications of a prolonged shutdown on economic data and assesses the current health of the labor market. With recession risks remaining low, Draho outlines how momentum and AI-driven tech are fueling market gains. He advises investors to adopt a bull-market posture, highlighting opportunities in AI, banking, high-quality credit, and gold as a strategic diversifier.
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Politics Drive Shutdown Timelines
- Political calculations and voter blame shape the likelihood and timing of a shutdown resolution.
- Expect brinksmanship until political incentives shift or a near-term fiscal pressure forces action.
Shutdown Will Crimp Economic Data Flow
- The shutdown impairs data flow and could degrade key economic releases if it lasts into mid-October.
- Missing timely data increases uncertainty for markets and can affect October CPI and subsequent indicators.
Labor Market In A Holding Pattern
- Recent labor data point to a softening labor market with tepid hiring and a falling openings-to-unemployed ratio.
- The overall view remains a softer labor market but low recession risk for now.