Latest news with #MarkHaefele
Yahoo
22-05-2025
- Business
- Yahoo
Fiscal fears push bond yields higher as stocks fall
Global concern about America's fiscal health and how long it will retain its status as an economic safe harbor triggered bond yields to push higher yesterday after a 20-year auction saw a muted reaction. The long-term outlook for the U.S. is taking a hit as analysts eye America's $36.2 trillion national debt burden. Debt-to-GDP is expected to spiral to all-time highs in the coming decades. The fears are partly down to the 'big, beautiful bill' President Trump is trying to encourage Congress to pass. The bill includes a raft of tax cuts, partly an extension of a temporary bill first passed in 2017. While the Trump team argues that tax cuts will increase discretionary income and, as such, lead to a rise in economic activity and growth, other economists counter that the White House is shutting off vital revenue needed to rebalance its books. These concerns played out in the bond market yesterday with 30-year Treasury yields closing above 5% at 5.09% for the first time since October 2023. Yields took a further step yesterday when a 20-year Treasury auction received a muted response, with $16 billion in bonds issued at 1.2 basis points above the pre-sale held at 5.05%. Real yields spun even higher, finishing the day at 2.65% per the St Louis Fed's securities yield index, which is quoted on an investment basis and is inflation-indexed. May 2025 marks the highest the index has risen since the St Louis Fed started tracking the data in 2010. 'Market volatility has resurfaced amid renewed uncertainty surrounding trade policy and the fiscal outlook. With bond yields elevated and tariff and budget risks in focus, this volatility may persist as investors monitor further developments in policy,' Mark Haefele, CIO at UBS Global Wealth Management, wrote in a note seen by Fortune this morning. If surging yields spell trouble ahead, then some caution bleed into the stock market. The S&P 500 closed 1.6% down yesterday, with Mag7 stocks down 1.41% over the past five days. The performer of the day was Alphabet, which jumped 2.9% by close up to $170 a share. Uncertainty appears to have bled into other regions, with Germany's DAX down 0.8% Thursday at the time of writing, and London's FTSE 100 down 0.6% as of Thursday morning. The Nikkei 225 finished down 0.8%. Here's a snapshot of today's action prior to the opening bell in New York: The S&P 500 fell 1.61% Tuesday. The index is down 0.6% YTD. S&P futures traded down 0.2% this morning. The Stoxx Europe 600 was down 0.7% in early trading. Asia was up down: Japan was down 0.8%. Hong Kong down 1.1%. Shanghai was down 0.8% and India's Nifty 50 was down 1.1%. The Mag7 was down with the exception of Alphabet, up nearly 3%. Bitcoin was sitting up at approximately $110,600 this morning. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-05-2025
- Business
- Yahoo
Don't be fooled by deescalation, says UBS, Trump's ‘surgical increases' on specific sectors are yet to come
UBS chief investment officer Mark Haefele warns that despite recent signs of de-escalation, the Trump administration is laying the groundwork for a new wave of targeted tariffs in strategic sectors like pharmaceuticals, semiconductors, and critical minerals. The worst-case scenario arising out of Trump's tariff policy is hopefully in the rearview mirror, but analysts are warning that the White House may still make some cutting moves. Thus far, Trump's tariffs have been fairly broad, with a 10% hike applied to the majority of the world, with a few exceptions in China and Canada. While some sector-specific tariffs—on autos as well as steel and aluminum, for example—have been announced since Trump won the Oval Office, far more have been announced on individual nations. While the countries that were subject to higher rates, such as the EU, Japan and Taiwan, have been granted some brief reprieve in the form of a 90-day pause of Trump's 'Liberation Day' tariffs, economists suspect this does not mean the end of announcements for good. UBS's chief investment officer, Mark Haefele, wrote today in a note seen by Fortune that there are many downward pressures on tariffs, including "a growing docket of legal challenges and the steady erosion in the president's job approval." "Republican lawmakers could also fear that high tariffs may actually reduce tax revenues by slowing economic growth and diverting trade ... [and] in the event of an escalating trade war, elected officials could come under pressure to provide fiscal support for industries harmed by retaliatory tariffs from other nations," he said. But despite the myriad reasons to continue de-escalating, which analysts interpreted as beginning with the announcement of a U.S.-China agreement, UBS is unconvinced that the only path is downward. "Despite these pressures to lower tariffs, the Trump administration is also preparing the groundwork for a more surgical increase in tariffs beginning this summer following trade investigations into strategic industries like pharmaceuticals, critical minerals, lumber, copper, and semiconductors," Haefele wrote. So, what do those clues look like? When it comes to pharmaceuticals, it's been less about what Trump has said and more about what he has done. Pharmaceutical products have been exempt from tariffs so far, but this week the president signed an executive order pushing action to lower drug prices. While the notion may be more of a concern for domestic producers, it also signals to large European businesses like Ozempic-maker Novo Nordisk and coronavirus-test maker AstraZeneca that they face further pressure even if national agreements are reached. In a press event on Monday, Trump said: 'Basically, what we're doing is equalizing. We are going to pay the lowest price in the world. We will get whoever is paying the lowest price, that's the price that we're going to get.' On semiconductors, Trump has openly said he wants to encourage chipmakers to produce in America. He wrote on Truth Social, his own social media site, last month: "We are taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN in the upcoming National Security Tariff Investigations. "What has been exposed is that we need to make products in the United States, and that we will not be held hostage by other Countries, especially hostile trading Nations like China, which will do everything within its power to disrespect the American People." At the moment, Canadian lumber is exempt from tariffs, though Trump has accused the neighboring nation of "ripping us off" over the goods. Trump has also ordered an investigation into the threat copper importing poses to national security, and similar action on critical minerals. And unlike the flip-flopping tactics apparently used to get trading partners to the negotiating table, the CIO suspects the Oval Office will be resistant to tweaking such policies: "We think the product tariffs are likely to be more durable and feature fewer carveouts and country exemptions because they are focused on strategic sectors. We estimate a 25% tariff on these sectors could raise the U.S. effective tariff rate by an additional 4 percentage points." That means uncertainty in the economic outlook is not going away, and it is stalling everything from Fed interest rate decisions to business investments. "While we continue to expect a range of trade agreements to be reached to sustain the tariff rate at roughly the level during the pause period, ongoing uncertainty could trigger further bouts of market volatility," Haefele adds. "Phasing into the market can be an effective way for underallocated investors to position for medium- and longer-term upside in U.S. equities, while capital preservation strategies can help manage near-term downside risks." This story was originally featured on Sign in to access your portfolio
Yahoo
09-05-2025
- Business
- Yahoo
Investors pull money out of US equity funds for a fourth straight week
(Reuters) -U.S. equity funds saw outflows for a fourth straight week through May 7, driven by uncertainties around trade tariffs and as investors awaited U.S.-China trade talks for more clues. Investors withdrew a net $16.22 billion from U.S. equity funds during the week, the largest weekly net sales since March 19, data from LSEG Lipper showed. A U.S. trade deal with Britain on Thursday, however, has fueled guarded optimism for progress in tariff talks with other countries. U.S. President Donald Trump also signaled that productive talks with China could lead to lower tariffs. "We continue to view U.S. equities as attractive, with a year-end S&P 500 target of 5,800," said Mark Haefele, chief investment officer at UBS Global Wealth Management. U.S. large-cap and mid-cap equity funds suffered net outflows of $13.6 billion and $1.12 billion, respectively, during the week. U.S. small-cap equity fund outflows, meanwhile, eased to a six-week low of $917 million. U.S. sectoral funds saw a net $2.89 billion worth of sales. Investors divested financials, tech, and metals and mining funds worth $1.18 billion, $507 million and $420 million, respectively. Sentiment towards U.S. fixed-income markets improved during the week as fund investors poured a net $3.53 billion - the most in eight weeks - into U.S. bond funds. Short-to-intermediate government and treasury funds saw a net $1.15 billion worth of purchases, reversing a net $765 million of sales the prior week. Municipal debt funds also saw a net $1.06 billion worth of additions. At the same time, investors snapped up a net $28.4 billion worth of money market funds in their largest weekly net purchase since March 5. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
09-05-2025
- Business
- Reuters
Investors pull money out of US equity funds for a fourth straight week
May 9 (Reuters) - U.S. equity funds saw outflows for a fourth straight week through May 7, driven by uncertainties around trade tariffs and as investors awaited U.S.-China trade talks for more clues. Investors withdrew a net $16.22 billion from U.S. equity funds during the week, the largest weekly net sales since March 19, data from LSEG Lipper showed. A U.S. trade deal with Britain on Thursday, however, has fueled guarded optimism for progress in tariff talks with other countries. U.S. President Donald Trump also signaled that productive talks with China could lead to lower tariffs. "We continue to view U.S. equities as attractive, with a year-end S&P 500 target of 5,800," said Mark Haefele, chief investment officer at UBS Global Wealth Management. U.S. large-cap and mid-cap equity funds suffered net outflows of $13.6 billion and $1.12 billion, respectively, during the week. U.S. small-cap equity fund outflows, meanwhile, eased to a six-week low of $917 million. U.S. sectoral funds saw a net $2.89 billion worth of sales. Investors divested financials, tech, and metals and mining funds worth $1.18 billion, $507 million and $420 million, respectively. Sentiment towards U.S. fixed-income markets improved during the week as fund investors poured a net $3.53 billion - the most in eight weeks - into U.S. bond funds. Short-to-intermediate government and treasury funds saw a net $1.15 billion worth of purchases, reversing a net $765 million of sales the prior week. Municipal debt funds also saw a net $1.06 billion worth of additions. At the same time, investors snapped up a net $28.4 billion worth of money market funds in their largest weekly net purchase since March 5.
Yahoo
18-04-2025
- Business
- Yahoo
Gold just hit another record high. Why Wall Street says it still has room to run.
Gold (GC=F) prices hit a record high this week as the precious metal's year-to-date gains top 25%. And Wall Street analysts believe gold prices still have room to run as investors seek safety amid rising concerns about a recession and an ongoing trade war. "An adequate allocation of gold has proven a helpful cushion against uncertainty over trade," said UBS Global Wealth Management chief investment officer Mark Haefele on Thursday. "Despite this strong run, we believe gold can advance further, and our base case is that the price will reach USD 3,500 an ounce this year." Gold settled at $3,341 an ounce on Thursday ahead of the holiday weekend. Over the past year, gold prices have surged 40% as central bank demand reached all-time highs and investors poured into physical-backed gold exchange-traded funds (ETFs). A weakening dollar ( has also bolstered demand for gold. The rally in gold has also been persistent, offering only a few pullbacks for investors waiting to pile in at lower prices. A 5% drop earlier this month was largely driven by margin call liquidations after President Trump revealed his tariff plan on April 2 and equities sold off, Goldman Sachs analysts argued in a Thursday note. This sell-off was quickly bought, and prices recovered to record levels. Read more: How to invest in gold in 4 steps Lina Thomas and her team at Goldman Sachs still view gold as being at an attractive entry point, calling the rally "structurally supported and less exposed to sharp near-term liquidation risk." The firm noted the sharpest upward price moves this month were driven by Asian official sector buyers, like the People's Bank of China. "Thus, we see current levels as a tactically attractive entry point — despite the recent move — and believe this reinforces upside risk to our $3,700/toz [per troy ounce] year-end forecast." If a recession occurs, the analysts predict ETF inflows could accelerate further, lifting gold prices to $3,880 per troy ounce by year-end. Still, the recent equity drop is giving pause to some market watchers who say retail investors may want to wait to buy the precious metal. "If we are in the early stages of what could be multiple pulses of margin calls, given the volatility that we are seeing in stocks, it is only a matter of time before gold becomes the source of liquidity to cover those margin calls," Michael Gayed, Lead-Lag Report publisher told Yahoo Finance Live on Thursday. "I don't believe gold has entered a bear market, but if you're going to be tactical in your time, you might want to wait." Ines Ferre is a Senior Business Reporter for Yahoo Finance. Follow her on X at @ines_ferre. Click here for in-depth analysis of the latest stock market news and events moving stock prices
