It's a 'strange' economy right now, says UBS' Evan Brown

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It's a 'strange' economy right now, says UBS' Evan Brown

ndx

When the Fed is easing and the economy is holding up and earnings are strong, that's some of the best returns you get in equities. It's a good environment for stocks. Tech momentum is strong, and Evan says you don't want to fight that.

10/24/2025 10:16:08 PM	medium term up	21 days later	-3.96%	-3.96%
10/22/2025 6:37:14 PM	short term up	5 days later	+3.64%	+3.64%
9/10/2025 1:15:07 PM	short term up	5 days later	+1.17%	+1.17%
8/20/2025 5:59:24 PM	short term cautious down	5 days later	+1.65%	-0.83%
8/20/2025 10:38:49 AM	medium term up	20 days later	+3.05%	+3.05%
7/31/2025 8:47:19 PM	short term up	5 days later	+2.42%	+2.42%

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For more and tomorrow's Fed decision, let's bring an Evan Brown of UBS. He is the head of multi-asset strategy. Evan, great to see you again. What do you make of where we are in the markets right now, given the backdrop we just laid out?

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Evan Brown

Yeah, I mean, I think it's... First of all, it's the strange economy right now. We're talking about that GDP is quite strong with the labor market is soft and we're waiting to see how that will evolve. The soft labor market is what's getting the fed to cut, and just history shows when the fed is easing and the economy is holding up and earnings are strong. That's some of the best returns that you get in equities. And so I think it's kind of keep it simple. This is a good environment for stocks.
When does the unemployment rate become problematic for the markets? Forget about the Fed because they're focused on it.

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Evan Brown

Yeah, I don't know that it's a particular level, it's the speed. We still have a pretty low overall unemployment level of 4.3%. But if we start seeing the speed pick up or initial jobless claims spike and it doesn't look too concerning, then I think we're in okay shape.
Today was a day when, in terms of asset allocation, you could have done nothing or been down; most of the S&P was down. How are you advising across this big umbrella? Lean heavier into what's working or find value in relative value cases? There's been a healthcare resurgence. How are you viewing this?

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Evan Brown

For the most part, we're leaning into what's working. Some sectors, like financials, have earnings not being rewarded, but we're overweight there and think we'll get going again. But with the momentum in tech, I don't think you want to fight that. We'll be getting earnings soon; it's looking pretty good.
You're looking for other ways to play the AI theme and recommend China.

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Evan Brown

Yes, China is a cheaper and less crowded way to play AI. The approach is different; in the US, we try to build the greatest models, whereas China focuses on efficiency and immediate applications.
A chart shows since October 22 with ChatGPT launch, stock market is up 70%, job openings down 30%. How do you think about this given job cuts and productivity?

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Evan Brown

It's tricky. Layoffs can be good for margins and stock prices short term, but if they build and hit top line through less spending, it's a problem. We can't predict how much productivity AI will bring. This will create public policy debates about income redistribution sooner than expected.

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