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Mike Ryan, chief investment strategist for UBS Wealth Management, weighs in on emerging markets and geopolitical impacts on investments today.
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Economic problems so what does he think that needs to be done joining me now is Mike Ryan chief investment strategist for UBS wealth management.
Mike thank you for joining us obviously if it -- stimulus what do you think needs to be done.
Plus they personalize -- I think that the Fed is taking the right approach.
On hold out the promise that if things deteriorate further if the economy accelerates -- financial markets come under stress that -- stand ready willing and able to provide support.
But I don't think you want to commit to that just now.
I'm there's really no evidence that the economy has really back slip that much the stress points -- still largely in the eurozone not in the US and so I think the Fed is taking the right tactical approach towards.
Perhaps throwing a commitment out there but not going out and defining it just yet so as the biggest threat perhaps the expiration of the tax cuts let's I bet -- is gonna go down -- the last minute.
Yeah well if history is any guide always the history last couple years suggests that politicians await the eleventh hour.
And fifty ninth minute before they reach a deal.
I still think at the end of the day you will see resolutions words.
And extending some of the tax measures.
Perhaps dampening some of these spending cuts that are being acquitted because the fiscal cliff is in no one's interest it's on the democrats' interest is on the republicans' interest it's -- in congress interest is on the White House interest.
Meantime these businesses -- just sitting and waiting have you play this market right now Mike what you'll what kind of sectors do you like.
Well we're gonna continue to focus on sectors where.
That we we think that that the strength of the balance sheets is going to be important aspect to it but we also think that companies that.
Our are continuing to leverage some of the growth in the faster regions of the world for example we we still like technology we still like the consumer Staples area.
Areas that we think again we're gonna be less it less exposed to come of these this cyclical -- Issues were having with politics and -- Europe.
You mention on the fixed income side -- corporate bonds and emerging market dollar denominated sovereign debt.
Are you concerned about the slowdown in China and the effect that can have knock on to the emerging markets.
Well there's no question that this is the most important and right now in the emerging markets is.
How much is China is slowing and how extensive the slowdown we'll take our view is that this is this is a transition period -- -- the the Chinese economy's transition and and -- that we we think that that the Chinese authorities have ample latitude to ease policy in fact we just saw this week gap.
The bank of China has latitude it it's very different from other central banks that.
They can't cut rates that that have limited abilities -- -- and let's also remember that China also a lot of ammunition.
That they could expand in terms of fiscal measures that you won't get in Europe but -- -- get the United States talking of Europe before you go I have to ask you we -- the Greek elections in ten days you don't believe Greece will -- -- of the Arizona but that's really not the big issue.
All lies some Spain and it's banking system does like get resolved any time soon.
I think it's gonna take some time -- I I do think it's in everyone's interest to make sure.
But the Spanish banking issues are addressed remember that everyone kind of equates all of these peripheral countries.
You -- Greece and Spain and Portugal and Italy come along some altogether but -- very different.
The problems are different pathways are different towards a solution I I think Spain man is really about making sure that you have.
The banks stabilize because then that will help stabilize the sovereign situation.
Alright very good lots of information Mike -- -- UBS wealth management Mike thank you very much.
