Chief Investment Officer Mark Haefele and colleagues from around the world discussed the implications of the recent events in the global banking sector for central banks, economies and markets.

Early March export data from South Korea showed a fairly large drop in exports, led by weakness to China. The fact that developed economy consumers have been prioritising service sector spending over goods spending is well established—and record global manufacturing supply is meeting slowing goods demand. However there are some signs that a floor may be close.

We outline views on equity market performance drivers, themes, as well as positioning across sectors and regions. Featured are Nadia Lovell, Senior US Equity Strategist with the UBS Chief Investment Office, and Brad Neuman, Director of Market Strategy with Fred Alger and Company. Host: Daniel Cassidy

Recent events emphasized that the fourth industrial revolution is revolutionary. Social media has meant that any company’s reputation and brand has become exponentially more important. This emphasizes the importance of a strong corporate culture—having the right person, in the right job, at the right time—requiring employment free from prejudice.

The ECB raised interest rates 0.5%, and signalled that future policy would be data-dependent. One would hope that in any well-run central bank, policy would always be data dependent. ECB President Lagarde was asked about the role of profits in driving inflation—the answer was not terribly insightful. Raising rates should tackle profit-led inflation, but it is an unnecessarily destructive way of achieving that goal.

In the wake of developments across the US and European banking systems over the past week, my guests offer perspectives and positioning guidance through both an equity and credit lens. Featured are Elena Guglielmin, CIO Financials Credit Analyst, and Sacha Holderegger, CIO Financials Equity Sector Strategist. Host: Daniel Cassidy

Last week’s US bank runs were effectively the first of the social media age. In 2008, Twitter barely existed. The glories of Instagram and TikTok lay far in the future. US bank runs and European financial sector noise highlight the increased importance of reputation—if you have to explain on social media, you have already lost the argument. All companies have to worry about reputation risk in the modern world, but it is especially important for banks.

David Lefkowitz, Head of Equities Americas, Brad Ball, US Financials Sector Strategist, and Leslie Falconio, Head of Taxable Fixed Income Strategy Americas, discuss the latest developments in the wake of the collapse of Silicon Valley Bank and Signature Bank, the broader market and economic impact, and investment implications moving forward.

During the UK’s brief Truss debacle, the Bank of England stepped in to offer liquidity to a financial system battered rising bond yields. Having dealt with the liquidity crisis, the BoE went on to raise rates in a measured manner. Investors have to consider whether the Federal Reserve will now learn King’s English, spell the word “labour” correctly, and follow the UK precedent with a rate rise this month.

Financial markets were waiting for today’s US consumer price inflation data with unseemly enthusiasm, but now have become completely distracted by last week’s bank failures. In the real world, the cost of living (for which consumer price inflation is a very poor proxy) probably matters more to people.

Our conversation outlines how the federal government has been responding to fluid developments surrounding regional bank failures in recent days and what the road ahead might look like. We also recap President Biden’s 2024 budget proposal and next-steps, along with preview an upcoming meeting between House Speaker Kevin McCarthy and the President of Taiwan. Featured is Shane Lieberman, Federal Affairs Manager, UBS US Office of Public Policy. Host: Daniel Cassidy

In the wake of second largest bank collapse in US history last week, we discuss the near-term market implications, as well as those to the broader US economy and to the course for monetary policy from the Fed. We also cover portfolio positioning guidance for the near-to-medium term. Featured is Jason Draho, Head of Asset Allocation Americas, UBS Chief Investment Office. Host: Daniel Cassidy

The failure and bailout of two US banks raise two near-term economic questions: will lending standards tighten in the US (and elsewhere); and if standards do tighten, does that matter to markets?

Featured are David Lefkowitz, Head of Equities Americas, Leslie Falconio, Head of Taxable Fixed Income Strategy Americas, and Brad Ball, US Financials Sector Strategist, UBS Chief Investment Office. Host: Anthony Pastore

Our conversation recaps the February employment report and this week’s release of the Fed Beige Book. We also discuss the health of the US labor market, takeaways for Fed Chairman Powell’s Congressional testimony and other notable data releases from the past week. Plus, preview what you can expect in the week ahead. Featured is Brian Rose, Senior Economist Americas, UBS Chief Investment Office. Host: Shiavon Chatman

Putting aside the sensationalism that surrounds a US employment report, what is really happening to the US labor market? First, it is hard to describe nearly two years of catastrophically negative real wages as a “tight” labor market. Tightness should be judged by outcomes. Second, the defining feature of the US labor market has been churn. Only one third of California’s “temporary” unemployed workers returned to their original employer. Filling vacancies with external workers is more difficult, but hiring rates are near record levels. Third, structural changes are creating relative changes (fewer checkout operators, more delivery drivers), and mean some jobs are unreported (TikTok content creators, small business start-ups).

UBS Global Wealth Management's Solita Marcelli, Chief Investment Officer Americas sat down with KKR’s Henry McVey, Head of Global Macro, Balance Sheet, and Risk, and CIO of KKR Balance Sheet. The two discuss how investors can prepare for this new investing regime, with an eye toward longer-term opportunities and asset allocation guidance.

Our conversation outlines the recent upgrade by the Chief Investment Office of the US Real Estate sector to most preferred. My guest outlines associated risks to the thesis, along with highlights notable trends and investment themes across the sector. Featured is Jon Woloshin, Real Estate and Lodging Analyst Americas, UBS Chief Investment Office. Host: Daniel Cassidy

The economic story for 2023 might be summed up by the mixed narrative of the Federal Reserve’s Beige Book. Talk of a “hard” or “soft” landing misses the complexity of the economy. Some parts of the US may get a hard landing, and others no landing. Thus, housing activity was weak (it is sensitive to the relentless rate increases). But consumer demand for leisure travel is so resilient that vacations may have to be considered a consumer staple, not a cyclical purchase.

Our conversation explains the sudden buzz behind ChatGPT and how Artificial Intelligence (as a broader theme) can contribute towards economic development and growth. We also touch on associated risks and where investment opportunities exist. Featured is Kevin Dennean, Information Technology and Communications Services Analyst Americas, UBS Chief Investment Office. Host: Daniel Cassidy

In this podcast, we discuss the many risks that lurk in a financial plan, even (especially) when it has a 99% probability of success. We discuss the importance of anticipating non-market financial shocks, strategies to gain control and confidence over your hard-earned savings, and ways for families to give themselves permission to spend freely in retirement. Featuring Andrea Rothberg, Wealth Planning Specialist, Justin Waring, Investment Strategist, and Katie Williams, Discovery Strategist, UBS Chief Investment Office.

Federal Reserve Chair Powell’s cry of “hike, hike, hike” was evident in the Senate testimony yesterday. Powell stressed “data dependency” but not “understanding the data”. Profit-led inflation and seasonal adjustment distortions may slow disinflation early in the year, and accelerate disinflation later in the year. Despite some articulate questioning, Powell failed to elaborate how policy tightening will transmit to reversing profit-led inflation.

Our conversation focuses on International Women’s Day, a global holiday which celebrates the social, economic, cultural, and political achievements of women. Our guests discuss the wealth building journey for women and how to make financial decisions for the future. Featured are Nicole Herman, UBS Relationship Manager for the Women’s Client Segment, and Michelle Doyle, Assistant Vice President, Senior Marketing Consultant and Women in Investing Chair of Professional Development at Federated Hermes. Host: Shiavon Chatman

Our conversation revisits the emerging markets as my guests speak to how the Chief Investment Office is thinking about the opportunity set for the asset class and provide us with a look into the ESG leaders across the emerging markets. Featured are Amantia Muhedini, Sustainable and Impact Investing Strategist Americas, as well as Xingchen Yu, Emerging Markets Strategist Americas, UBS Chief Investment Office. Host: Daniel Cassidy

In the US today, a non-economist will attempt to explain to a collection of non-economists the extraordinary complexity of an economy undergoing dramatic structural change. The questioning will be mainly partisan point scoring. The question Fed Chair Powell needs to be asked is “what do you think you are doing?”. Powell has yet to explain how raising rates will tackle profit-led inflation. Pursuing higher unemployment seems an ineffective response.

China’s government announced a GDP growth target of around 5%, which is less ambitious than had been expected. Some academic estimates suggest that China’s economy is around two-thirds its reported size—so if a lower growth estimate reflects a more realistic target, increased realism will not change underlying reality. If China’s growth is focused on domestic consumption of services, there is less spillover to the rest of the world.

Learn about the 2023 Planning Guide from UBS with Brad Dillon, Senior Wealth Strategist.

Japan’s Tokyo consumer price inflation slowed on energy price subsidies. Food companies are trying to get price increases through, which added to the numbers. Durable goods prices also increased, which is not the international norm (in the US, durable goods prices have plunged into deflation). This may reflect different consumer patterns in Japan.

Against a challenging macro backdrop, our conversation outlines why CIO believes adding emerging markets to the opportunity set can help to achieve returns and manage portfolio risk. Featured is Alejo Czerwonko, Chief Investment Officer for Emerging Markets Americas, UBS Chief Investment Office. Host: Daniel Cassidy

Eurozone consumer price inflation has upside bias, with national data coming in above “expectations”. However, “expectations” are fairly meaningless—the Dutch consensus forecast was based off three numbers (so why was the consensus number even published?). There is a 2.3 percentage point range in the Italian consumer price expectation.

Our conversation explains the recent performance shift within the municipal market, plus a performance outlook against a backdrop of the recent climb in rates. We also cover portfolio themes to consider and discuss the relative value opportunities from New York issuers. Featured is Kathleen McNamara, Senior Municipal Strategist Americas, UBS Chief Investment Office. Host: Daniel Cassidy

Our conversation updates on the Russia-Ukraine War, the regulatory implications of and federal response to the Ohio train derailment, the latest on debt-ceiling negotiations, and more. Featured is Shane Lieberman, Federal Affairs Manager, UBS US Office of Public Policy. Host: Daniel Cassidy

German preliminary consumer price inflation for February is due, after some increases in the French and Spanish data. It is not helpful to describe these numbers relative to consensus, because consensus ranges are becoming so wide as to make the concept dubious. Profit-led inflation does risk higher price increases at the start of the year (when companies traditionally raise prices).

Co-Head Global Asset Allocation, Mark Andersen, and colleagues from around the world discuss the implications of the war in Ukraine one year in, US and China macroeconomics, as well as our global investment ideas.

Our conversation focuses on the latest Modern Retirement Monthly publication, which explores withdrawal rates and how to assess retirement readiness using house-hold specific factors. Featured are Justin Waring, Investment Strategist Americas, and Ainsley Carbone, Total Wealth Strategist Americas, UBS Chief Investment Office. Host: Daniel Cassidy

Preliminary February consumer price inflation data is due from France and Spain. The consensus is for a stable y/y rate from France, and a further slowing in Spain. The forecast range making up the consensus is so wide as to render the consensus an indicator of questionable value. Politicians in both France and Spain have focused on supermarket food price increases in recent weeks. Farm prices are rising less than consumer prices, with profit expansion down the food chain adding to inflation.

Our conversation focuses on the latest UBS House View, which touches how inflections in the macro economy are occurring at different speeds in different regions. We also cover the latest market outlook and asset allocation recommendations from the Chief Investment Office. Featured is Jason Draho, Head of Asset Allocation Americas, UBS Chief Investment Office. Host: Daniel Cassidy

We hear from Lane of the ECB, Broadbent of the Bank of England, and Jefferson of the Federal Reserve today. Central bankers have to know that seasonal adjustment weirdness will be giving false support to data near term. They also must know that monetary policy is a very, very blunt tool to deal with profit-led inflation. But the perception of central bank omnipotence over inflation means that spin will have to dominate over substance.

Our conversation focuses on wealth preservation, how investing differs in the Black community and what to look for in a financial advisor. Featured is Kleo Curry, Financial Advisor, Vice President, Wealth Management. Host: Shiavon Chatman

Our conversation focuses back in on fixed income as we examine the year-to-date performance drivers and what the prospects for return look like in the months ahead. We also touch on an outlook for rates and positioning recommendations within the asset class. Featured is Leslie Falconio, Head of Taxable Fixed Income Strategy, UBS Chief Investment Office. Host: Shiavon Chatman

US personal income and consumption data is due, with strength expected in consumption (funded by savings and credit). Partly, this is due to the unremitting hedonism of the US consumer. Low unemployment will also help; while this has not translated into pay bargaining power, it gives a level of job security that reduces the need to save as an insurance against an uncertain future.

The Federal Reserve minutes were anxious about the tightness of the labor market. The financial markets were anxious about the Fed’s anxiety. The weird thing is that US real wages have been breaking all records—and not in a good way. The year-over-year rate of real wage growth has been negative for 22 consecutive months. With such a collapse in living standards, the Fed’s relative focus on labor-led rather than profit-led inflation seems peculiar.

Our conversation touches on the burning questions on the minds of investors when it comes to sustainable investing, including ‘Is ESG over?’. We also outline how the US and China are working independently on renewable energy solutions and where opportunity might exist for collaboration. Plus, guidance on how investors should approach a sustainable allocation within their portfolio. Featured is Amantia Muhedini, Sustainable and Impact Investing Strategist Americas, UBS Chief Investment Office. Host: Daniel Cassidy