UBS On-Air: Market Moves

Market volatility can often be misleading, reflecting corporate-level shifts rather than macroeconomic changes. Recent signs of slowing durable goods spending in the US suggest a shift in consumer behavior rather than an economic downturn. Amidst this, policymakers remain largely unconcerned, with attention shifting towards UK CPI as a key indicator. Meanwhile, Saudi Arabia's ambitious investment pledges to the US are viewed as more symbolic than immediately actionable, while the Eurozone's inflation figures appear stable and uneventful.

In this discussion, Jason Draho, Head of Asset Allocation Americas at UBS, shares insights on the implications of the recent U.S. government shutdown on economic data releases. He explains the expected timing for key reports and discusses the Fed's cautious approach to a potential December rate cut. Jason also delves into market volatility driven by AI trade fatigue and evaluates how policy changes under a possible Trump 2.0 administration could impact inflation and Fed decisions. This insightful conversation offers a fresh perspective on navigating current market challenges.

The latest insights reveal a bleak outlook on the US labor market, with calls for potential rate cuts by the Fed. Rising affordability concerns could slow the pace of policy easing, as highlighted by Fed Vice-Chair Jefferson. Tariff effects might push inflation higher in the near term, with companies likely to pass on costs. There’s also a warning about profit-led inflation extending beyond the transitory phase. Additionally, political tensions between China and Japan raise concerns about tourism and economic impacts.

Rohit Chopra, a Portfolio Manager and Analyst at Lazard Asset Management, shares valuable insights on emerging markets. He assesses how the asset class has evolved and discusses the key factors that could drive its future outperformance. Rohit elaborates on Lazard's bottom-up investment approach and highlights specific types of companies that attract their focus. He also provides takeaways from the recent U.S.-China summit and offers guidance on investing in China, emphasizing the importance of a long-term perspective and diversification.

Leslie Falconio and Letty Zemaitis from UBS provide deep insights into the fixed income market. They discuss the unexpected resilience of high-quality bonds amidst 2025’s volatility. The duo analyzes what factors have driven high yield outperformance, emphasizing strong fundamentals and a favorable issuance mix. Leslie also shares CIO's strategic recommendations, advocating for a focus on high-quality securitized products and a smart laddering approach for investors. Their expert perspectives offer valuable guidance for navigating today’s fixed income landscape.

Dive into the recent Swiss-US trade deal, which brings more tariff cuts and questions about their impact on consumer prices. Explore the complex landscape where trade announcements often don't result in immediate changes. Discover slow tariff reductions in the EU and uncertain negotiations with China over rare earth exports. Paul also highlights Japan's GDP drop and upcoming fiscal support while emphasizing the importance of the Empire State manufacturing survey and the latest Italian inflation figures.

Get insights into the Fed's rate-cut debate and how muddled data is affecting market pricing. Ulrike unveils new AI infrastructure developments and discusses the disparity in public valuations between AI enablers and users. Explore the concentration of AI value among chipmakers and hyperscalers versus lagging application-layer firms. Healthcare emerges as a promising diversification strategy against AI risks, with notable progress in obesity treatments. Stay tuned for upcoming NVIDIA earnings and the latest on AI monetization signals.

The discussion highlights the US administration's push to cut tariffs, particularly on food products, in response to consumer inflation concerns. Paul Donovan warns that public reductions might perpetuate misconceptions linking tariffs to consumer prices. He also delves into the limitations of bilateral deals with Latin America due to Mercosur rules. Additionally, China's recent industrial data reveals struggles in production and investment, impacting consumer spending. The conversation wraps up with insights about the European Central Bank's Chief Economist and upcoming trade data.

Nick Galakatos, Senior Managing Director and Global Head of Life Sciences at Blackstone, dives deep into the evolving landscape of life sciences funding. He reveals that developing a new drug can exceed $2 billion, stressing how AI and innovation are reshaping this costly process. Galakatos discusses Blackstone's unique approach to investing in products rather than companies, focusing on promising therapies that could significantly impact patient care. He also explores the FDA's stable review timelines and highlights the current innovation-driven opportunities in an uncertain market.

This discussion features Burkhard Varnholt, a UBS commentator and author with deep insights into global markets and clean energy. Burkhard analyses the significant rise in renewables from 9% to 34% and the effects on fossil fuel demand. He highlights China's leadership role in clean energy and examines the implications of the U.S. absence from COP30. Key investment opportunities in clean energy indices and innovative solutions like space-based solar also take center stage, showcasing how investors can drive positive change.