UBS On-Air: Market Moves

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.