According to BlockBeats, on September 8, the U.S. added 162,000 nonfarm payrolls in August, sharply exceeding market expectations of 55,000 and marking the largest gain since March. The unemployment rate held steady at 4.1%. Following the data release, market pricing for a 25-basis-point rate hike at the Fed's September meeting rose to approximately 60%.
UBS Action Plan: Buy Stocks on Dips, Wait for Gold
UBS believes that whether the rate hike stems from economic strength or inflation pressure is more important for portfolios than the hike itself. The bank remains bullish on global equities, advising investors to use volatility to buy on dips while earnings prospects remain strong. It particularly favors themes such as AI, power & resources, and longevity.
On fixed income, UBS no longer recommends locking in yields on short- to medium-term bonds as a cash substitute, but views the rise in yields on high-quality long-term bonds as providing allocation opportunities.
In currency markets, UBS said that tightening under a strong economy could extend the dollar's strength cycle through capital inflows and relative economic outperformance. Investors are advised to reduce excess dollar exposure during periods of dollar strength.
For gold, UBS noted that the metal may face short-term pressure from rising real rates and a stronger dollar, but it remains a long-term hedge and diversification tool. Investors should wait for a price correction before building positions.