UBS On-Air: Market Moves

Tensions escalate as China halts Boeing imports while the US imposes chip sales restrictions. Economic nationalism is at play, affecting global capital flows. Deadlock in US-China trade talks raises questions about negotiating positions. Recent data reveals misconceptions about the significance of trade in the global economy and underscores its complexities. The discussion highlights the nuances of how these factors will impact the markets moving forward.

Leslie Falconio, Head of Taxable Fixed Income Strategy for the Americas at UBS, shares insights on fixed income amidst economic uncertainty. The discussion navigates current investment landscapes, exploring cautious credit strategies and their implications on market dynamics. They emphasize the shifting relationship between equity and fixed income markets, highlighting opportunities in U.S. high yield corporate credit. Both Falconio and Ed Al-Hussainy also stress the need for a strategic approach during volatile times, steering clear of panic-driven decisions.

The podcast dives into the economic impact of new trade taxes proposed by President Trump, focusing on potential levies on pharmaceuticals and computer chips. It highlights surprising consumer resilience in retail sales within the UK, even as the auto industry's production struggles continue. Additionally, the discussion shifts to trade trends, particularly in the UK, and anticipates crucial economic data from Germany and the U.S., contextualized within a cautious global economic landscape.

Jason Draho, Head of Asset Allocation Americas at UBS, breaks down the complexities of 'Trumponomics' in this insightful discussion. He examines the recent shifts in U.S. trade policy and their impact on the equity and bond markets. With investor uncertainty lingering, he offers clarity on tariff developments and their implications for market dynamics. Draho also navigates the outlook for the upcoming week, highlighting essential economic data, corporate earnings, and the need for transparency in U.S.-China trade negotiations.

A recent move by the U.S. President to exempt iPhones from high tariffs on imports from China raises eyebrows. This decision could significantly impact consumer pricing, especially given the potential for a notable increase. The discussion navigates through the implications of trade policies on the tech sector and highlights the urgent need for a coherent long-term strategy in light of rising Chinese exports. It’s a fascinating look at how tariffs shape market dynamics and consumer behavior.

US President Trump’s administration clarified the 125% tax on imports from China was 145%. This increase will not shift demand patterns (it will cost US consumers more money). For investors, this raises policy competence questions again. A well-planned trade tax would consider costs. Tax rates set seemingly at random question whether costs are properly considered.

It’s natural to feel anxious during market drawdowns, which is why having a plan to weather market storms (and take advantage of market volatility) can be helpful. Justin outlines some reasons to be confident and calm during market drawdowns, and how to plan accordingly. Featured is Justin Waring, Senior Total Wealth Strategist, UBS Chief Investment Office. Host: Daniel Cassidy

As US trade policy continues to evolve quickly, Shane drops by to update us on the latest, and what the near-term may consist of with respect to negotiations. We also discuss progress around the budget resolution up on Capitol Hill, and recap Israeli Prime Minister Netanyahu’s White House visit earlier this week. Featured is Shane Lieberman, Senior Governmental Affairs Advisor, Governmental Affairs US. Host: Daniel Cassidy

On this week’s episode of Viewpoints, Burkhard weighs in on the recent tariff-related volatility in the markets and shares guidance on how investors should consider responding, along with whether the US is heading towards a recession, stagflation, or something else. Plus, thoughts on how the Fed might respond to the market volatility, and a high-speed look around global equity markets.

US President Trump’s retreat from trade taxes took less than 24 hours. However, taxes on imports from China increased, and the universal 10% import tax stays in place. None of these taxes existed a week ago, and US consumers will have to use income to pay them. Higher taxes on specific products remain, and more are promised.