UBS On-Air: Market Moves

Join Amantia Muhedini, a Sustainable & Impact Investing Strategist at UBS, and Dan Roarty, Chief Investment Officer of Sustainable Thematic Equities at AllianceBernstein, as they dive into the evolving landscape of sustainable investing. They unpack the complexities of EU Omnibus regulations and the changing U.S. policies under the Trump administration. The duo highlights the importance of transparency and data-driven decisions, while also exploring the implications of new executive orders on the electric vehicle market and fossil fuel reliance.

US Treasury Secretary Bessent signaled that former US Treasury Secretary Yellen’s debt issuance plan would continue, implying no increase in longer-dated Treasury bonds and lowering 10-year yields. This support is threatened by talk of a “DOGE dividend” to taxpayers. There is a considerable gulf between claimed government savings and economists’ view of reality. Refunding illusionary savings would be a deficit-financed stimulus check.

Join Paul Hsiao, an expert in M&A and asset allocation at UBS, as he unpacks the exciting prospects for dealmakers in 2025. He discusses the positive outlook for mergers and acquisitions and how AI is reshaping capital expenditure. Paul highlights the surge in take-private deals and the potential revival of IPO activity, driven by favorable market conditions. He also emphasizes the importance of assessing risks while maintaining market optimism, particularly in the evolving AI landscape.

The latest discussion dives into the cautious outlook of the Federal Reserve, emphasizing concerns over inflation tied to political maneuvers. There’s a palpable nervousness about how the administration's economic policies may fuel inflationary pressures. Interestingly, companies seem ready to pass tax increases onto consumers, a shift from the past. This episode highlights the complex interplay of fiscal policies and market reactions in these tumultuous times.

US President Trump threatened more taxes on US consumers, focused on autos, pharmaceuticals, and semiconductors. Trump rapidly retreated from trade taxes that would be very visible to US consumers—Gen Z would notice tariff-induced inflation for avocado on toast. Less visible taxes (like aluminum) have endured. The new proposals are partially visible—taxing new cars raises second-hand car prices and the cost of car insurance—but probably sufficiently disguised as to prevent a repeat retreat.

On this week’s episode of Viewpoints, Burkhard reflects on his recent travels to Africa and attendance at technology conferences across Europe - shedding light on the continental differences of our digital economy, along with opportunities to be aware of. Burkhard also previews the upcoming elections in Germany, and what clients and investors should be mindful of.

The Swiss franc has long been a safe haven during uncertain times - second only to the US dollar for many investors. But what makes the currency of the world's 20th largest economy so appealing? The small Alpine nation also boasts an impressively broad industrial base and an array of innovative companies. So, which other Swiss assets should global investors be considering? Featured in this episode is Daniel Kalt, CIO for Switzerland, alongside co-hosts Christopher Swann and Belinda Peeters.

Jason Draho, Head of Asset Allocation Americas at UBS Chief Investment Office, provides keen insights into current economic data and policy shifts. He analyzes January's inflation trends and disappointing retail sales, unveiling mixed signals in the U.S. economy. The conversation also highlights the intricate federal budget negotiations and their potential impact on market stability. Draho shares key strategies for navigating uncertainty, focusing on the resilience of the S&P 500 and tech sectors, while emphasizing inflation hedges for investors.

UK labor market data was stronger than forecast, with some positive revisions to previous month’s data. Anguished corporate cries about tax increases and related projections of mass unemployment do not (so far) appear in any of the data. Employment growth seems especially strong amongst the middle-aged, who matter because they have an important degree of spending power.

Sadiq Makarajee, a Fixed Income Strategist at UBS, shares his insights on the current state of the municipal bond market. He discusses the potential impacts of federal policy changes on municipal investments and the significance of tax exemptions. The conversation dives into the booming municipal ETF market, the growing interest in high-yield bonds, and strategic investment approaches in today’s fluctuating landscape. Makarajee emphasizes navigating quality and risk while staying updated on economic influences.