A Fed rate hike is coming into view. Here’s what UBS says to own
A strong August jobs report boosted Fed rate-hike odds, bringing a range of trading opportunities across assets, says UBS.
TL;DR
- August's nonfarm payrolls surged to 162,000, exceeding forecasts and increasing the odds of a September Fed rate hike.
- UBS recommends buying equities on dips, taking advantage of elevated medium-to-long duration bond yields, and using gold as a portfolio hedge.
- The firm remains positive on global equities, favoring AI, power, resources, and longevity sectors.
- Opportunities may arise in medium-to-longer duration bonds due to recent yield increases, offering income and diversification.
- A hawkish Fed turn could support the U.S. dollar, while gold's safe haven status may be bolstered by geopolitical uncertainty and credibility concerns, despite headwinds from higher real rates.