UBS On-Air: Market Moves

We discuss the factors behind YTD muni performance relative to other fixed income sectors, against a backdrop of geopolitical uncertainty, rate volatility, and elevated supply. Plus, a look at opportunities within prepaid gas bonds. Featured are Sudip Mukherjee and Barry McAlinden, Senior Fixed Income Strategists Americas, UBS Chief Investment Office. Host: Daniel Cassidy

As expected, the Bank of Japan raised rates to 1%, a level last seen in the distance past of 1995. This was a different move from the recent ECB policy error—unlike Europe, Japan began the year with an accommodative monetary stance. The rate increase is part of a process of returning to neutral, and is broadly considered appropriate.

While it was an exciting weekend for sports fans, it was also a notable weekend on the geopolitical front, with the US and Iran having agreed to a deal that will re-open the Strait of Hormuz. We discuss what this means for the markets, along with what investors will watch for during this week’s highly anticipated FOMC meeting. Plus, a review of CIO’s current positioning recommendations. Featured is Jason Draho, Head of Asset Allocation Americas, UBS Chief Investment Office. Host: Daniel Cassidy

The announcement of an Iran-US deal (to be signed on Friday) has supported risk markets and allowed oil prices to fall moderately. The deal comes before strategic petroleum reserves were exhausted, limiting the economic damage from the war. Iran will not toll shipping through Hormuz for 60 days—after that it is not clear, but tolls are not likely to be a major economic cost.

A US policy restricting access to a cutting edge AI model led to a sudden shutdown for all users last week, raising questions about what AI regulation means for markets. This episode explores how concerns around misuse, including jailbreaking and cyberattacks, could impact model development, access, and competition across regions, and what this means for markets in the near term.

We discuss the factors that have led to a pronounced repricing of US interest rates, an outlook for monetary policy, and CIO’s current fixed income positioning recommendations. Plus, a look at the lending that is powering AI investment, and the implications to credit markets. 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

Shane drops by to update on the latest surrounding a potential deal signing over the weekend to end the US-Iran conflict, along with updates on recent legislative developments spanning the Foreign Intelligence Surveillance Act and Secure America Act. Plus, a look a renewed efforts from the Trump administration to enact new tariffs. Featured is Shane Lieberman, Senior Governmental Affairs Advisor, Governmental Affairs US. Host: Daniel Cassidy

The expected error from the ECB was accompanied by rhetoric citing concerns about oil price pressures broadening throughout the Eurozone economy. There is no evidence of this reported broadening—non-oil prices should be expected to pass on oil-related costs, and only a wage-spiral or profit-led inflation would constitute a broadening of inflation pressures. These are notable by their absence. Nonetheless, the Teutonic cry of “we must have discipline” seems to be echoing throughout the ECB, raising the risk that the error will be compounded with a further rate increase.

The ECB is almost certain to commit a policy mistake today. Raising rates will not change Eurozone inflation or inflation expectations. This policy is stuck in an unhelpful 2022 mindset. Consumers will continue to reduce savings rates to pay for higher oil prices. The main consequence of today’s error is to increase fragility in the economy, rather than doing more serious damage.

On this episode of Viewpoints, with the commencement of the World Cup tournament just days away, Burkhard outlines the economics of soccer and the highly anticipated event. We also touch on the direction of interest rates, and the prospects for newly minted Fed Chair Kevin Warsh having to begin his term with a rate-hike, rather than a rate-cut.

May US headline consumer price inflation is expected to rise as the price of the Iran war is being passed through relatively quickly to consumers. A supply shock might have a delayed effect (with profit margins being squeezed), but the very visible cause of price increases and the precedents of the pandemic supply shocks and tariffs make it easier for firms to pass on higher costs without delay (limiting damage to profits, so long as demand does not falter).

Join Jeff Hans, Senior Portfolio Manager for the House View Equity Portfolios with UBS Asset Management, as he shares a performance update and outlook for US equities. Host: Dominic Schagar, Senior Equity Investment Specialist. Recorded on 27.05.26

China’s May exports were stronger than expected, with the seemingly insatiable demand of companies wanting to play with the nice shiny new toy of AI. Export data to the US was flattered by comparison to the volatility around US tariff announcements last year. Recent months have also shown strength in exports of the electrification big three—solar panels, batteries, and electric vehicles.

The string of nine consecutive positive weekly returns for the S&P 500 ended last week, with Friday being one of the worst days all year after the release of the May jobs report. Jason Draho, Head of Asset Allocation Americas from the UBS Chief Investment Office, joins to discuss the jobs data, the market response, and what it means for the investment outlook. Host: Daniel Cassidy

Bond and equity markets have weakened in Asian trading. There seems to be no single cause, rather a general sense of increasing risk. Economically, the drop in equities is not that significant—in theory, there might be negative wealth effects, but this is too small a move and most consumers have been relying on lowering savings rates, not equity liquidation to finance their consumption.

Health care has not seen the same stock market traction as AI and power and resources over the past year, but continues to serve as a key ingredient to a diversified portfolio and a source of stability. This episode explores how the sector is not just a defensive play, with the pharma industry moving toward innovation-driven growth led by GLP-1 drugs. At the same time, advances in artificial intelligence and genomics are transforming how drugs are discovered, while an aging global population provides a powerful structural tailwind for demand.

Shane drops by to recap this week’s primary election outcomes, and shares thoughts on potential outcome scenarios for the November mid-term elections. Plus, a review of Congressional legislative priorities over the next few months, and an update on where negotiations stand to end the US-Iran war. Featured is Shane Lieberman, Senior Governmental Affairs Advisor, Governmental Affairs US. Host: Daniel Cassidy

Andrew Dubinsky, Senior US Economist from the UBS Chief Investment Office, drops by on this jobs Friday to reflect on the May employment report and the overall health of the US labor market. Plus, a preview of next week’s May inflation data, and thoughts on what the inflationary environment could look like in the second half of the year. Host: Daniel Cassidy

The US employment report adds a rather unreliable narrative to the US labor market data. Expectations are for a dull report, with an unchanged unemployment rate and a sub-100,000 non-farm payrolls number. However, the range of estimates is particularly scattered. When job creation is this weak, the composition of the workforce may distort the average hourly earnings data without saying anything about wage growth.

Europe is often associated with weaker growth, energy shocks, and geopolitical pressure. But beneath the surface, some of the region’s leading companies are telling a very different story - one of resilience, adaptation, and innovation. In this episode of Across the Pond, hosts Christopher Swann and Belinda Peeters are joined by Rolf Ganter, Head of European Equities, to discuss what is driving the rebound in European corporate profits, why investors may be underestimating the strength of European companies, and which areas may offer opportunities from here.

The Federal Reserve Beige Book’s summary of economic anecdote mentioned “uncertain” and “uncertainty” no fewer than 50 times this month (before tariffs were announced). That is below the uncertainty peak that followed last year’s tariffs, but well above the 14 mentions in May 2024. Uncertainty has a paralyzing effect on business decisions—and the risk is that uncertainty endures.

US President Trump is proposing new tariffs—an additional 10% for US consumers of goods from most major economies. Someone in the administration seems to be aware that tariffing high frequency purchases aggravates inflation perceptions and the affordability crisis, and some key food items are exempted.

On this episode of Viewpoints, Burkhard reflects on recent market performance and the momentum of equities, along with the impact of inflation concerns to bond market activity. Plus, some observations and takeaways from the UBS Global Family Office report.

Another day, another round of Gulf war stories—the latest originated from semi-official Iranian sources, so markets took them more seriously. Iran’s apparent suspension of negotiations with the US prompted US President Trump to attempt a ceasefire between Israel and Hezbollah. Market opinions differ as to the terms and effectiveness of this.

June has commenced and summer is just around the corner. US equities however have not waited for summer to heat up, as the S&P 500 last week completed its ninth straight positive week. There exists however concern that this rally is overdone and at risk of a pullback. Jason Draho, Head of Asset Allocation Americas, reflects on current market conditions, drivers and provides an investment outlook. Host: Daniel Cassidy

Oil prices have edged higher on the lack of any discernible progress toward an Iran-US agreement. As with reports of an imminent deal last week, the reaction is muted. A jaded cynicism has come over investors, and in the absence of a definite statement from Iran there is a tendency to downplay comments from the US administration.

Every technology shift redraws the market leaderboard. From mainframe to PC, to internet and mobile, history shows it is not only about what stocks to own, but also what stocks not to own. Incumbents rarely win the next era, while profits shift to platforms and networks built on top of the hardware layer. In AI, companies fastest to reach platform mode, combining intelligence and application layers, are likely to define the next generation of market leaders.

Aakash Doshi, Head of Gold Strategy at State Street Investment Management, drops by the Talking Markets Podcast to outline the investment case for gold against a backdrop of geopolitical uncertainty. Aakash weighs in on price volatility, how he sees gold demand evolving, and how the structural factors that supported the gold market run in recent years have been impacted by recent geopolitical risk factors. Host: Daniel Cassidy

Energy markets gave a cautious response to reports the US and Iran may extend the terms of the “ceasefire”. Key approvals are missing—US President Trump wishes to think about it, which will take a couple of days. Market caution also reflects the more muted tone from the Iranian side. Energy markets need to consider a post-war environment—how quickly production normalizes, what damage must be repaired, and what a newly empowered Iran means.

Tony Kim, Head of the Global Technology Team within the Fundamental Equities division of BlackRock’s Portfolio Management Group, drops by the Talking Markets Podcast to reflect on a recent two-week Asia Tech Tour, where he met with over 40 companies across the AI stack. Tony shares what stood out most from those conversations, and shares how he is framing the opportunity and timing for another emerging tech theme, quantum computing. Host: Daniel Cassidy

In the past day, the US fired on Iran, Iran fired on Kuwait, Israel fired on Lebanon, US President Trump threatened to “blow up” Oman. The US administration says the ceasefire (sic) is holding. Market reactions have been negative but muted. Investors are eyeing US domestic political pressures as grounds for expecting a resolution, in spite of Trump’s denials. Trump’s approval rating hit a new low in a recent opinion poll, and the administration is being directly blamed for higher prices.

Hear from members of the UBS Chief Investment Office fixed income team as they provide a performance and positioning update across fixed income sub-sectors. Featured are Leslie Falconio, Head of Taxable Fixed Income Strategy Americas, along with Senior Fixed Income Strategists’ Letty Zemaitis, Frank Sileo, Sudip Mukherjee & Barry McAlinden, from the UBS Chief Investment Office.

The embarrassing lack of economic information leaves markets prey to idle speculation, rather than the pure and objective guidance that economists can offer. Yesterday’s exchange of fire between Iran and the US has not had a major market impact—it fits with Iran’s narrative on negotiations (which is what markets have priced), and keeps the optimism bias more or less intact.

Join David Lefkowitz, Head of Equities Americas, each month for a look at the factors that are driving performance across US equities. We also cover risk considerations, thematic focuses, and positioning recommendations from the UBS Chief Investment Office (as outlined within the latest UBS House View). This month, David explains CIO’s continued positive outlook for US equities, along with updates to S&P 500 price targets and earnings estimates. Plus, a review and risk considerations, spanning geopolitical factors and interest rate movement. Host: Daniel Cassidy

US air strikes against Iran seem to confirm the Iranian view of negotiations to end the war. Investors had tended to focus on Iran’s perspective rather than the view set out in US President Trump’s social media posts, so the strikes have generated only a muted market response.

Iran confirmed progress in talks with the US, lending credibility to US President Trump’s weekend social media posts. A deal still seems some way off, but progress is enough to fuel markets’ inherent bias to optimism and oil prices have fallen. Reopening Hormuz would not return oil prices to pre-war levels. However, the impact of any Iranian tariff on tankers using the strait (probably around USD 2 million per shipment) would be an economic rounding error for global inflation.

Joe Davis is the Global Chief Economist and Global Head of the Investment Strategy Group at Vanguard. Joe joined Jason Draho, UBS CIO Head of Asset Allocation Americas, at the 1285 podcast studio to exchange views on a range of topics, including how the current geopolitical landscape is impacting markets, the road ahead for monetary policy, how artificial intelligence is shaping innovation and the investment landscape, and other mega-trends top of mind for investors. Host: Bryan Contreras

UK consumer sentiment improved on the latest reading; but since the financial crisis, sentiment and reality have not been too closely aligned. UK April retail sales were weaker, with a more-than-10% decline in auto fuel sales leading the weakness. UK consumers have options (walking, public transport, flexible working) that can slow fuel consumption when prices rise.

Tiffany Agard, Strategist on the UBS Global Investment Management Sustainable and Impact investing team is joined by Preeti Sayana, Portfolio Manager with Fidelity Investments, for a discussion around advances in gender-lens investing, opportunities to advance gender equality, and how to leverage your investments as a means for achieving that advancement - referencing the 2026 Gender-lens investment report from UBS Global Investment Management. Host: Bryan Contreras

News that Iran has allowed some ships to cross the Strait of Hormuz encouraged a modest drop in the oil price. The volume of oil exiting the Gulf is a fraction of pre-war levels, but allowing some flow might diminish physical shortages. Assuming Iran benefits economically, it also lessens pressures on Iran to deal with the US. In terms of the Wile E. Coyote trajectory, this implies the economy is still over the edge of the cliff, but might continue running through thin air for longer.