UBS On-Air: Market Moves Top of the Morning: CIO Strategy Snapshot - A better risk-reward distribution
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Oct 20, 2025 In this discussion, Jason Draho, the Head of Asset Allocation for the Americas at UBS Chief Investment Office, shares insights on the latest investment outlook and positioning recommendations. He explains the rationale for upgrading equities based on improved growth and earnings forecasts. Jason highlights three key considerations driving this outlook and discusses the current fragility of investor sentiment. He also addresses risks like tariff issues and AI monetization concerns while recommending strategies for investment in equities and quality fixed income.
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Growth Outlook Supports Equities
- U.S. growth and earnings look stronger than previously expected, supporting higher equity returns.
- Consumer spending and AI-driven capex are key drivers sustaining growth into next year.
Position For Easing Fed Policy
- Expect the Fed to cut rates in the near term and factor easing into positioning.
- Position for lower policy rates and potential end to quantitative tightening next year.
Positioning Is Constructive Not Euphoric
- Investor positioning is above average but not extreme, so risk assets remain constructively poised.
- Speculative pockets exist but their pullbacks clean out excesses, which can be healthy for medium-term markets.