UBS On-Air: Market Moves Top of the Morning: CIO Strategy Snapshot - Navigating volatility
Oct 13, 2025
Jason Draho, Head of Asset Allocation Americas at UBS, shares insights on navigating current market challenges. He discusses recent trade tensions between the US and China, highlighting export controls and signaling negotiations. Jason analyzes last Friday's market sell-off, addressing whether it indicates impending volatility. He provides an outlook on Q3 earnings, noting historical trends and a constructive perspective. Finally, he offers strategic investment recommendations, advocating for equity exposure and caution in sectors like banks and technology.
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Trade Tensions Flare Then Cool
- US-China trade spat briefly escalated with rare-earth export controls and US tariff threats, then softened over the weekend.
- Jason Draho says both sides likely avoid full-scale war and may negotiate ahead of November deadlines.
Speculative Areas Corrected Hardest
- Friday's 2.7% S&P drop and sharper falls in speculative pockets signaled a pullback in frothy areas.
- Draho views this as healthy repricing, not proof of a bursting bubble, but warns volatility could persist.
Flat Revisions Can Precede Strong Beats
- Q3 earnings estimates have seen almost no downward revisions, which historically signals stronger beats.
- Draho notes this could raise the bar but is often a bullish indicator for reported EPS beats.