UBS On-Air: Market Moves

US President Trump vowed to keep the (US) Hormuz blockade, declaring the Iranian economy was “crashing,” which would force negotiations. Investors are more inclined to look at the state of the US economy as determining how the situation evolves. In the Wile E Coyote scenario, the US is off the edge of the cliff but happily running on thin air. Thursday’s data showed household savings rates have fallen from 5.1% to 3.6% of disposable income during this administration, which is how consumers afford the affordability crisis. This decline can sustain consumption for some time, but not indefinitely.

On this episode of Viewpoints, Burkhard reflects on the factors that are contributing to global equity markets grinding higher, despite continued uncertainty stemming from geopolitics. We also touch on what investors should make of crude oil prices being once again on the rise, and assess how today’s market environment compares to that of the 1990s.

Despite King Charles reassuring US members of Congress that there was no “rearguard action” to re-establish control, the Federal Reserve has acquired a distinctly British accent. Four dissents (in two directions) is a straightforward Bank of England imitation (economics is always more convincing in a British accent). Fed Chair Powell pledged to remain in office as a governor.

Arif Joshi is a Senior Managing Director and Head of the Emerging Markets platform at Bramshill Investments. Arif shares boots-on-the-ground insights following a recent trip to Venezuela, as we discuss the country’s geopolitical relations with the US, along with the landscape for energy production and exploration. We also discuss the US-Iran war and its’ implications to economic activity in the region, upcoming talks between President Trump and China’s President Xi Jinping, along with where to locate opportunity across the emerging markets. Host: Daniel Cassidy

The UAE’s imminent departure from the OPEC oil cartel is the most significant to date. Near term, there is little impact—oil prices are primarily influenced by Iran. Longer term, it may mean more supply, although OPEC’s influence in broadly defined energy supply is likely to decline at an accelerated pace with electrification. The move may signal a more urgent need for revenue by the UAE—reflecting reconstruction, rearmament, and the loss of revenues from oil, tourism, and nomadic wealth.