UBS On-Air: Market Moves

Kurt Reiman, Head of Fixed Income Americas at UBS, dives into the shifting landscape of U.S. trade policy and its market implications. He discusses recent tariff developments and their effects on investor sentiment, particularly regarding U.S.-China negotiations. Kurt also highlights the urgent need for Congress to address rising budget deficits and the potential economic instability ahead. As political motivations loom with midterms approaching, he explores how these dynamics could shape fiscal policy and influence voter sentiment.

Alejo Czerwonko, Chief Investment Officer for Emerging Markets Americas at UBS, dives into the intricate dance between the U.S. dollar and emerging market assets. He discusses the bearish outlook for the dollar and its implications for investors, urging a fresh look at opportunities beyond U.S. borders. Notably, Czerwonko highlights Argentina's newfound promise driven by economic reforms and fiscal responsibility, while also spotlighting Brazil and Mexico as hot spots for investment amidst changing currency trends.

This week, experts dive into the latest jobs numbers, revealing insights into the US labor market's health. They discuss the mixed results from the May Employment Report and the implications of key economic indicators. There's a spotlight on the Fed’s Beige Book, shedding light on economic trends. Finally, listeners get a sneak peek at upcoming market developments to watch for in the week ahead.

The reliability of employment data is called into question as the US May report approaches. Average earnings are misrepresented and don’t reflect true wage trends, complicating the Federal Reserve's policy decisions. Meanwhile, the restaurant and leisure sectors show weakness, possibly skewing average earnings higher without impacting wages. The discussion shifts to the challenges organizations face in hiring and firing, highlighting how imprecise data complicates leadership decisions.

Burkhard Varnholt, a seasoned investor and expert on global markets, discusses the bullish potential of investments worldwide. He highlights the impact of U.S. economic strength on market growth and the emerging role of gold. The conversation navigates the significant investment risks associated with climate change, pointing out the opportunities in the energy transition. Varnholt contrasts Japan's resilient bond market with Greece's financial woes, offering insights into effective strategies for managing government debt.

In a world of economic uncertainty, all surveyed economists anticipate a rate cut from the European Central Bank, raising questions about their accuracy. The discussion also contrasts the ECB's decision with the challenges faced by the US Federal Reserve. Additionally, insights into productivity trends reveal how unreliable GDP data shapes market decisions, while societal tensions linked to technology highlight the impact of prejudice politics on economic growth.

Rich rejoins the conversation with Jason to exchange thoughts around the evolution of US trade policy, the current market environment, the health of the US economy, and portfolio positioning recommendations. Featured are Jason Draho, Head of Asset Allocation Americas with the UBS Chief Investment Office, and Richard Bernstein, Founder, Chief Executive Officer and Chief Investment Officer of Richard Bernstein Advisors (RBA). Host: Daniel Cassidy

US President Trump’s mega-donor Musk was strongly critical of the “big, beautiful bill” currently before Congress. The bill contains many things markets are worried about. Musk’s opposition may embolden some Republican senators to oppose parts of the bill (Musk has more money than Trump, but their recent political forays have not been universally successful).

May was a good month for the markets, though there are many questions that investors are asking as we enter June, such as the fate of tariffs, the outcome of trade negotiations, the status of the One Big Beautiful Bill, and what impact the tariffs will have on the economy. Jason Draho, Head of Asset Allocation Americas, from the UBS Chief Investment Office, weighs in on those questions, along with shares guidance when it comes to positioning for the current environment. Host: Shiavon Chatman

Reports in Washington suggest US President Trump may talk directly with China’s President Xi later this week (after several days of more heated rhetoric between the US and China over trade). As Trump has been anxious for the call, and China has not, this may hint at more US retreats over trade taxes as a concession to bring China to the telephone.