Welcome to the House View

Dear reader,

This month's Feature reviews the first half of 2018, while also highlighting some key themes that we'll be watching in the second half of the year, including trade tensions, the risk of an overheating US economy, and growth prospects for China and the Eurozone. As global growth has shifted toward a more US-biased make-up, we are taking action to guard against the risk of continued US dollar strength. In addition to reducing our FX strategy underweight to the US dollar, we also trim our tactical overweight to emerging market (EM) assets – this latter trade is the subject of our In context video.

Transitioning to a longer-term perspective, our Top themes spotlight section takes another look at our Enabling technologies theme. In particular, we highlight some of the debate held during the business and innovation panels at our CIO Global Forum events in Dallas and New York City. While we acknowledge that there are fears and risks associated with innovation, history teaches us that the benefits of new technologies like artificial intelligence will vastly overshadow their short-term disruptions.

This month's Bull market monitor confirms that US GDP growth is accelerating, with upbeat sentiment, solid consumer spending, and strong growth in business investment. And despite the fact that the US unemployment rate now sits at one of its lowest in decades, wage growth remains modest and core inflation is still moving slowly toward the Fed's target. As a result, we reiterate our view that the bull market won't end any time soon.

Regards,

Mike

Mike Ryan, CFA

Chief Investment Officer Americas

UBS Global Wealth Management


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