UBS On-Air: Market Moves

Burkhard Varnholt, a global markets strategist and author, dives into whether the iconic 'Santa Rally' is still a real possibility this year. He discusses the expanding bull market beyond major tech firms and projects that a surge in innovation could lead to widespread productivity gains reminiscent of the Roaring 20s. Burkhard emphasizes the potential of deep tech startups to boost profits for many companies, not just a select few. As a festive bonus, he recommends Zora Neale Hurston's classic novel for year-end reading.

Jeannine Lennon and Ted Galgano, both Municipal Strategists at UBS, dive deep into New York City's fiscal future following Zohran Mamdani's mayoral victory. They discuss the affirmed risk categories for the city's debt, highlighting the impact of political tensions on market spreads. Jeannine emphasizes historical safeguards that maintain credit quality, while Ted outlines key transition appointments to watch. Their insights equip investors with critical knowledge as they navigate the evolving landscape of municipal finance.

Join Jeremy Zirin, a Senior Portfolio Manager at UBS Asset Management, as he dives into the intriguing world of U.S. equities. He discusses recent market volatility stemming from tariff uncertainties and a data vacuum due to the government shutdown. Jeremy highlights strong Q3 earnings, particularly in tech and financials, while addressing the pending Fed meeting's impact on rate cuts. He forecasts modest GDP growth and offers insights on portfolio positioning, emphasizing opportunities in AI and defensives like pharma.

September import price inflation may seem outdated, but it still holds significance for economists. Interestingly, importers bear the legal responsibility for tariffs, while exporters might lower pre-tariff prices. When this discounting doesn't happen, the tariff burden shifts along the supply chain. Additionally, product-specific trends, like deflation in electronics, can cloud the overall picture. Paul also highlights the importance of comparing US import prices with other countries and discusses the implications of a recent boom in factory building amidst changing production dynamics.

Alberto Rojas, Senior Emerging Market Strategist at UBS, shares his insights on navigating emerging markets. He discusses how luck and skill intertwine in this dynamic sector, emphasizing the impact of external conditions and effective policies. Rojas predicts resilient GDP growth, manageable inflation in emerging markets, and highlights favored equities such as those in China and India. He also recommends focusing on strong sovereigns in fixed income and high-yield currencies like the real and peso for optimal earnings.

Shane Lieberman, Senior Governmental Affairs Advisor at UBS, shares his expertise on critical geopolitical issues. He discusses the latest peace efforts in the Russia-Ukraine conflict, including a new peace plan and troop caps. Shane also delves into escalating U.S.-Venezuela tensions and narco-terrorism. As Congress prepares for year-end priorities, he highlights funding deadlines, health care subsidy debates, and the expected passage of the National Defense Authorization Act amidst rising affordability concerns.

Japan's recent bond auction reveals robust domestic demand amidst international concerns over debt. While foreign investors are anxious, Japanese investors remain calm due to the country's wealth and strong local bond ownership. Historically, despite a substantial rise in debt-to-GDP, Japan has navigated funding successfully. Meanwhile, market speculation hints at a December rate cut, while inflation trends show a decline in the UK and stable rates in the euro area, bolstered by favorable trade policies.

In this insightful discussion, Jason Draho, Head of Asset Allocation for the Americas at UBS, shares his expertise on macroeconomic trends and portfolio strategies. He delves into the expectations around a December Fed rate cut and the implications of a likely new Fed Chair, Kevin Hassett. Jason also highlights the impact of a government shutdown on economic data and explores the reasons behind recent market rebound, linking it to shifting investor sentiment toward AI and growth sectors.

President Trump's unconfirmed nominee for the Federal Reserve Chair stirs market speculation, with expectations of Senate approval for non-radical candidates. Paul Donovan discusses the implications of increased independence among Fed members, potentially dulling the Chair's influence on policy. He also highlights South Korea's strong chip exports, driven by AI demand, contrasting it with broader trade trends. Lastly, Switzerland's rejection of a wealth tax reflects rising concerns over wealth inequality.

Phil Orlando, Chief Market Strategist at Federated Hermes with extensive investment expertise, shares insights on election outcomes and their influence on the 2026 midterms. He analyzes how recent Democratic wins might shift the political landscape and discusses the government's urgent actions with an eye on upcoming campaigns. Orlando also elaborates on trade policy, predicting legal support for presidential authority and its positive effects on the trade deficit. Finally, he offers a bullish outlook for the S&P and advises patience in market positioning.