UBS On-Air: Market Moves

As we near the end of 1Q24, we reflect on fixed income performance and CIO’s current positioning recommendations within the asset class. We also outline the investment case for investment grade corporates and review considerations when it comes to investment grade portfolio construction. Featured are Leslie Falconio, Head of Taxable Fixed Income Strategy Americas, and Barry McAlinden, Senior Fixed Income Strategist Americas, UBS Chief Investment Office. Host: Daniel Cassidy

US producer price data is mercifully free of problematic used-car prices and fantasy owners’ equivalent rent. It is also less susceptible to profit-led inflation, covering prices further up the supply chain. The final demand measure has been below 2% y/y for almost a year now, and the overall picture should be of benign inflation pressures.

Following the upgrade of the US Healthcare sector to most preferred, Eric Potoker explains the allocation shift and sub-sector views within the broader group. We also spend time discussing healthcare-related investment themes, along with the investment risks to be mindful of. Featured is Eric Potoker, Healthcare Sector Strategist Americas, UBS Chief Investment Office. Host: Daniel Cassidy

Following this morning's release of the February CPI print, Senior Economist Americas with the UBS Chief Investment Office, Brian Rose, drops by to share his thoughts on the data release and the broader US economy.

US consumer price inflation was largely as expected, but the detail shows a narrower number of prices that are contributing to inflation. Excluding shelter the figure remains below 2% inflation, and durable goods had their fifteenth consecutive month of deflation. Economists exclude items from the headline not to fiddle the figures, but to better understand disinflationary forces. Food price inflation slows (though most prices are not falling, and chocolate and vending machine inflation is still high). This may be politically relevant in impacting inflation perceptions.

Mike Contopoulos rejoins Leslie Falconio for a discussion around asset class performance, the potential course for monetary policy from here, positioning, and more. Featuring Mike Contopoulos, Director of Fixed Income for Richard Bernstein Advisors, as well as Leslie Falconio, Head of Taxable Fixed Income Strategy Americas with the UBS Chief Investment Office. Host: Daniel Cassidy

US February consumer price data are due. It is the detail that will tell us about the strength of disinflation forces. The January number had less headline disinflation than anticipated, but this owed much to the fairy tale of owners’ equivalent rent—a price no one pays. The inflation experience of homeowners is a lot less than headline consumer prices, which means their spending power is better.

We begin the trading week by recapping last week’s macro developments, including the latest US jobs report, and Fed Chairman Jerome Powell’s semi-annual testimony to Congress. We also preview this week’s inflation data and discuss the potential implications to the course for monetary policy and markets. Plus, we share current views when it comes to positioning. Featured is Jason Draho, Head of Asset Allocation Americas, UBS Chief Investment Office. Host: Daniel Cassidy

We conclude the week by reflecting on the February Jobs Report, Fed Chairman Jerome Powell’s Congressional testimony, and discuss the investment implications of these macro events. Plus, we preview what you can expect in the week ahead. Featured are Brian Rose, Senior Economist Americas, David Lefkowitz, Head of Equities Americas, and Leslie Falconio, Head of Taxable Fixed Income Strategy Americas. Host: Shiavon Chatman

Japan offered a timely reminder of the unreliability of economic data. Fourth quarter GDP was revised from -0.4% to +0.4%. Admittedly, this is an annualized number, which sensationalizes and exaggerates changes, but it is still a notable revision. The revision was mainly due to stronger investment spending—Japanese consumer spending was revised somewhat weaker.