Welcome to the Lam Lens, where we bring clarity to
the world of finance.
I'm Kelsey Berryman, senior wealth strategy associate at The Lam
Group, joined by Evans Lam, managing director, wealth management and
senior portfolio manager at UBS Financial Services, Inc.
Our team is located in Pasadena, CA, and you can
reach out to us at evans.lam@ubs.com.
Our goal is simple: to educate, debunk financial myths and
share our team's lens on the markets.
Good afternoon, my followers.
Last time we talked about the outlook of the 2026,
this is Evans Lam from UBS Financial.
And now I want to really talk about the market
risk this year, because as mentioned last time that
everybody's very bullish on the market because the economic data
has been very stable and more on the positive side.
So for example, the inflation holding around 2.6, 2.7%,
productivity is more than 2%, corporate earning is still on
the rise.
And so give the market a lot of momentum.
I think the risk this year is still, largely
I call it the Trump risk, especially related to geopolitical,
and also the risk associated with the private equity valuation.
So let's talk about how we make money last year.
Either you do the TACOs,
that means that Trump will chicken out and after he
announced anything you kind of buy on the dip and
then later on he revised it or he canceled, you
know the announcement and then the market rebound.
So that has been working very well.
So whether we will continue to work this year, we
don't know.
For example, there's a few items that we have been,
the market has been trading on already.
Number one, of course, the interest rate cap at 10%.
Now whether it's time to get more on the credit
card companies because this is beyond the presidential authority to
control interest rate.
And then recently also he instructed the Fannie Mae and
the Freddie Mac to buy $200 billion of the bonds
outstanding and automatically before they do anything the 30 years
mortgage has dropped down already.
So sometimes work, sometimes you know, we just have to
see.
And so the greatest question is now on a geopolitical,
my humble opinion is that the Middle East war is
not.
I mean, it's still ongoing and the Ukraine war, my
humble opinion is again will be ongoing.
I don't think Russia and Ukraine or Europe want to
yield onto the Donbas region.
And then we have of course the Venezuela and the imminent
risk is Iran.
Whether we will attack or somehow protect the democracy of
Iran is questionable.
But I don't see that as a major risk for
the market because this is, really I think it's pricing.
The only items that I don't think the market is
pricing is the risk of US invading Greenland.
As you heard yesterday, the Denmark government has basically prepared
the soldiers to fight to protect Greenland in terms
of any military invasion or actions.
So the key is we are right now at economic
war or really at war between China and Russia already.
So can we afford a major war with the whole
of Europe, which is our allies?
I think, uh, this is depending on, uh, Trump's, uh,
recommendation.
And the key is that it's all about
mineral rights because right now under the current treaty, the
US military have full access to the,
build any naval base military base or have any, you
know, a soldier station in Greenland.
So the key is whether we want to acquire the
mineral rights in Greenland through invasion or through negotiation.
That will be the biggest risk I think for the
market.
Now
the other risk is later this year the direction of
the market will be dictated by the IPOs of
a few major private equity companies.
Of course, you know OpenAI is good.
It's a good example right now is value at 500
billion, 600 billion and the market expectation is that IPO of
OpenAI is a trillion.
Now whether it's going to be a trillion, we set
the dictation of the market direction of the market.
And then also we're looking at of course the SpaceX
as well.
So those are the two key risks.
The second risk is whether, you know, fear of missing
out, whether the institutional investor will continue with the practice
of doing and getting into the market because of FOMO,
you know fear of missing out.
This is something that we want to see later this
year.
Thank you very much for listening in.
Thank you for listening to this week's episode of Lam
Lens.
You can visit us at advisors.ubs.com/thelamgroup for more
information.
See you next week.
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