UBS On-Air: Market Moves

US consumers are splurging during Black Friday, tapping into savings for nonessentials. Retailers balance discounts with rising costs, trying to maintain profit margins amid price increases. Noteworthy hikes in household goods like bananas and beefsteak are highlighted. Meanwhile, consumers are funding inflation by eating into their savings. In Europe, inflation remains stable despite government controls, while shifts in US immigration policy may impact long-term growth and productivity.

The Federal Reserve Beige Book presents a stable outlook but raises concerns about tariff-induced price pressures impacting manufacturers and retailers. High-income consumers are spending, yet hiring remains weak. Delving into the implications of tariffs, the podcast explores connections between rising costs and increasing insurance premiums. Additionally, the UK budget hints at subtle tax increases, along with discussions on property tax and the societal pressures of visible inequality. A glance at the Euro area anticipates quiet data amid holiday distractions.

US retail sales data shows a decline, but it may not be cause for alarm as revisions are likely. Inflation affects nominal sales numbers, complicating real spending insights. An increasing trend towards spending on experiences is noteworthy, as it impacts retail sales metrics. Healthy credit card data suggests consumer confidence persists. The potential government shutdown could hinder economic data flow, amplifying the significance of retail sales leading up to the Federal Reserve meeting.

Jason drops by to explain the contributing factors to recent volatility and pullbacks across parts of the equity market, and shares expectations for the upcoming December FOMC policy meeting (now that government issued economic data is once again flowing). Plus, thoughts on how investors should position portfolios heading into year-end, and into 2026. Featured is Jason Draho, Head of Asset Allocation Americas, UBS Chief Investment Office. Host: Daniel Cassidy

Federal Reserve Governor Waller is pushing for a December rate cut, raising concerns about the labor market and the broader economy. Falling household savings highlight the need for a robust job market to mitigate economic risks. There's speculation about Waller's motives, possibly eyeing a role as Trump's Fed chair. Additionally, insights into US retail sales and producer prices indicate economic health, while German GDP revisions reveal weaker consumption and a need for government support.

Join Evan Brown, Head of Multi-Asset Strategy at UBS Asset Management, as he analyzes the macroeconomic landscape. He shares insights on gauging the U.S. economy amid government shutdowns using private data sources. Brown unpacks the implications of the Fed's recent 'hawkish cut' while highlighting how strong private balance sheets bolster resilience. Additionally, he discusses potential AI-driven market risks and the promising momentum in Asian equities, especially in Japan and Korea.

Discover the surprise rejection of France's revenue plan and its implications for the Senate's next moves. Learn why market impacts from this budget process are expected to be minimal. Dive into the G20 summit criticism, focusing on the high travel costs and questioning its real value. Explore the tensions between multilateralism and rising economic nationalism. Finally, get insights into upcoming data releases from Germany and the U.S., including key economic surveys and speeches.

Ulrike Hoffmann-Burchardi dives into the market's shift towards cash flows, highlighting signals from tech giants like NVIDIA and Meta. She discusses concerns over AI firms' financial struggles and potential monetization strategies, warning about price elasticity risks. With a focus on high-ROI areas for AI deployment, she points to healthcare and U.S. financials as key opportunities. A macro update reveals insights on the Fed's rate outlook and the importance of upcoming payroll data in shaping market movements.

The latest US employment report reveals significant issues, including poor survey response rates and a misleading seasonal adjustment. While payrolls increased, the unemployment rate also climbed, raising eyebrows in the markets. Notably, youth job-seeking trends point towards a 'no hiring, no firing' situation. Meanwhile, middle-aged job security could sustain consumer spending. The UK experiences weak retail sales, especially in clothing, and shifts from Black Friday may skew purchasing trends. Central bank decisions remain uncertain, influencing investor sentiment.

Jason Draho, Head of Asset Allocation for the Americas at UBS, shares insights on the economic landscape for 2026. He discusses the potential for AI to drive market momentum, examining the need for broader demand beyond current applications. Draho analyzes government debt issues, forecasting more fiscal expansion and its implications. Furthermore, he highlights how political dynamics will influence markets and offers key portfolio positioning strategies, advocating investments in equities, particularly US tech and commodities as potential diversifiers.