UBS On-Air: Market Moves

President Trump's announcement of a 25% tariff on imported cars and parts raises eyebrows. The new tax is set to impact inflation and growth in the US economy. It’s expected to change consumer behavior while potentially squeezing the auto industry. Additionally, the implications for GDP and domestic companies' profit margins are scrutinized, alongside the role of inventory data as a safeguard against economic uncertainties. How will these economic moves shape the future landscape?

Join Joe Davis, Vanguard's Global Chief Economist, and Jason Draho, UBS's Head of Asset Allocation for the Americas, as they dive into the current U.S. economic landscape. They discuss the resilience of the economy amidst changing tariff dynamics and examine the promising role of AI in boosting productivity. The conversation also touches on the complexities of bond markets, the importance of diversification in investment strategies, and the future of monetary policy amid shifting global trends.

UK inflation data for February surprised analysts with lower figures, raising questions about the reliability of economic indicators. The challenges posed by the government's energy pricing caps are also highlighted as they contribute to impending inflation changes. Quality issues plague labor market and producer price data publications, complicating the economic landscape. The discussion expands to the impact of fiscal policies and global supply chain dynamics on inflation expectations.

Brian Levitt, Global Market Strategist at Invesco, shares his insights on the current economic landscape. He discusses the effects of U.S. trade policy uncertainties and their role in market volatility. Levitt highlights the significance of artificial intelligence as a market megatrend and suggests looking beyond major tech firms for investment opportunities. He also emphasizes a defensive investment strategy focusing on quality and lower volatility, and advocates for a diversified approach that includes mid-cap stocks and European equities.

A recent discussion reveals how a casual chat about military plans among U.S. officials could signal broader policy shifts, particularly concerning Europe. The implications of new trade taxes announced by Trump raise questions about investor confidence and economic impacts. Additionally, the podcast probes U.S. trade measures against Venezuelan exports and their effectiveness, while evaluating how such policies might affect American consumers and upcoming business sentiment.

As markets showed signs of stabilizing last week, investors weigh whether the correction is behind us or has temporarily paused. Jason shares his thoughts, along with recaps the FOMC meeting, the latest economic data, along with previews next week’s anticipated tariff news from the White House. Plus, a review of positioning recommendations. Featured is Jason Draho, Head of Asset Allocation Americas, UBS Chief Investment Office. Host: Daniel Cassidy

Media reports suggest that the rather haphazard attempts to restructure the US government could cost half a trillion dollars in lost tax revenues this year. Investors have not priced the restructuring as an efficiency improvement (more efficient government would boost both bonds and equities). While record wealth levels in the US suggest that the high fiscal deficit can be funded, losing tax revenue on this scale will raise concerns about sustainability at some point.

Tune in monthly to hear from UBS Asset Management’s multi-asset team for thoughts on the global macro environment, and markets.

Hear views on the US equity markets from Jeremy Zirin, Senior Portfolio Manager of the House View Equity Portfolios, and Head of the Private Client US Equity Team, and Dominic Schagar, Senior Equity Investment Specialist.

South Korean export data for early March recovered from lunar new year distortions. Export strength was led by ships and chips—more-consumer-oriented sectors were not so robust. The data is a positive signal for Korea, but does not perhaps say much about global demand as trade taxes increase.