UBS On-Air: Market Moves

Japan’s governing coalition lost its majority in the Diet lower house. Prime Minister Ishida signaled that he does not intend to resign, but a third coalition partner must now be sought. This creates market uncertainty. If political bargaining drags on, the Bank of Japan might delay raising rates. Opinion polls underestimated support for the opposition—a reminder that investment decisions should not be based on opinion poll evidence, anywhere.

In this livestream, Global Head of Investment Communications Kiran Ganesh and colleagues discussed the implications for Fed easing and US equities, while evaluating risks from the upcoming US election, and looked at the scenarios for the months ahead.

US Michigan consumer sentiment is due, including the inflation expectations reading. Is this useful information? It is not. The data will be distorted by frequency bias (there is more to life than food and fuel for the family fleet of SUVs, but that is pretty much all US households focus on for inflation). Political bias will also distort the data—Republicans think they are living in Weimar Germany, Democrats think inflation is under control.

Patricia Zobel serves as Head of Macroeconomic Research and Market Strategy for Guggenheim Partners Investment Management, and previously served as an executive at the Federal Reserve Bank of New York (New York Fed). Patricia shares perspective on a range of topics, spanning an outlook for the US economy, to the direction of monetary policy. We also spend time on allocation preferences across fixed income, real estate, and ex-US. Host: Daniel Cassidy

Our conversation revisits the emerging markets as we explore opportunities across equities and bonds, along with touch on what investors should keep in mind as it relates to the upcoming US election. Plus, we take inventory of what was a busy month of September spanning monetary and fiscal policy developments out of the US and China. Featured is Xingchen Yu, Emerging Markets Strategist Americas, UBS Chief Investment Office. Host: Daniel Cassidy

The authors of the latest Federal Reserve Beige Book are clearly followers of TikTok memes. The economy was described as being modest and demure (actually as growing at a “slight or modest pace” but it amounts to the same thing). The benign growth story fits with most economists’ central projections. On inflation, anecdotes suggested a more concerted resistance to profit-led inflation from consumers.

On this episode of Viewpoints, Burkhard weighs diverging viewpoints when it comes to the condition and health of the US economy, along with whether there is further room to run in equity markets in consideration of realized returns over the past couple of years. In doing so, Burkhard breaks down the anatomy of bull-and-bear markets.

ECB President Lagarde is set to speak again. It is very unlikely that the last 24 hours have changed the world view of the ECB president. The tone of yesterday’s remarks signaled the direction of travel for Euro area rates was clear, though there was an attempt to insert some ambiguity about the pace of easing.

We spotlight the latest edition of the quarterly UBS CEO Macro Briefing book as we explore how business owners and investors feel about the upcoming US election, the state of the US economy, the course ahead for Fed monetary policy, and more. Featured is Paul Hsiao, Asset Allocation Strategist Americas, UBS Chief Investment Office. Host: Daniel Cassidy

Yesterday’s pontification of Federal Reserve speakers created a stir in bond markets. There were a range of views expressed, from “keep on cutting” to “more gradual cuts”. Markets, rendered skittish by Fed’s “data dependency” on undependable data, have raised yields. US inflation is down one percentage point since last December, which would justify a similar reduction in rates over the course of this year.