UBS On-Air: Market Moves

Hear the latest thinking and investment recommendations from the UBS Chief Investment Office with Leslie Falconio, Head of Taxable Fixed Income Strategy Americas, and Nadia Lovell, Senior Equity Strategist Americas.

We reflect on President Biden’s third State of the Union address, including a look at the key themes and messaging. We also update on Decision 2024 and the road ahead. Featured is Shane Lieberman, Senior Governmental Affairs Advisors, Governmental Affairs US. Host: Daniel Cassidy

The US employment report looms—for all its flaws (which are many), it still evokes excitement. Investors have two questions. Is the economy slowing? Will wage pressures create a fourth inflation wave? Payrolls data hints at the former—if the economy is not slowing the Federal Reserve might feel justified in allowing real interest rates to rise. The answer to the wage question is “no,” and average hourly earnings do not measure wages. Every time you use a self-service checkout, you push up average hourly earnings; your voluntary unreported labor replaces a low-paid worker.

Federal Reserve Chair Powell testifies to the Senate today. Yesterday’s remarks were consistent with three or four rate cuts this year, but there was surprise suggestion that a proposed tightening of bank regulation may be rethought. Fed President Kashkari hinted at support for a drastic tightening of monetary policy (suggesting only one rate cut this year, generating soaring real rates).

The US “Super Tuesday” primaries offered no real surprises for markets as to the outcome. However, opinion polls seem to be the clear loser. The Republican primaries were the main contested votes, and there notable errors in predictions of former US President Trump’s victory margin.

China announced a growth target of around 5%. China’s officials are strongly motivated to ensure official numbers meet the target, but do investors care? China’s domestic growth rate is more important to global companies (who make goods in China to sell in China) than to the global economy. China’s imports for domestic use are limited in volume. The quality of growth also matters. Were growth to come from increasing the consumer share of the economy, it might have more of a global impact.

Following what has been a busy week in Washington DC, Tom McLoughlin join us to update on government funding negotiations, preview this week’s Super Tuesday events, and the State of the Union address. Plus, we touch on what early polls are pointing to for the Presidential election, as well as the top issues on the minds of voters. Featured is Tom McLoughlin, Head of Fixed Income Americas, UBS Chief Investment Office. Host: Daniel Cassidy

With the S&P 500 having closed higher 16 of the past 18 weeks, Jason Draho outlines the factors that could determine whether the momentum will continue, including upcoming data releases, and the next FOMC meeting. We also cover positioning considerations for the current environment. Featured is Jason Draho, Head of Asset Allocation Americas, UBS Chief Investment Office. Host: Daniel Cassidy

It’s a quiet start to a busy week. The ECB makes a policy decision later this week—no one is expecting a change, but it allows for an official statement and ECB President Lagarde will speak. While Lagarde speaking might lack a certain scarcity value, the tone of recent comments from ECB members has tended towards rate cuts being later.

Recap of PCE data and Fed remarks, Washington DC policy negotiations. Preview of economic calendar, government spending bill analysis, and upcoming data releases like ISM Services Index.