Speaker · Updated
Burkhard Varnholt: latest market views
UBS
Summary
Managing Director and Senior Financial Markets Advisor in the Chief Investment Office of UBS Global Wealth Management, and former Global Chief Investment Officer of Credit Suisse, with about 30 years of investment experience.
Chorus has 13 views from Burkhard Varnholt across 3 episodes on UBS On-Air since October 15, 2026.
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Newest first. Every quote is checked against the episode's transcript.
Midterm elections matter for markets much less than most people think; earnings and rates drive stocks.
Burkhard says the midterms' market impact is probably much smaller than most expect. Markets are up because they prefer clarity over uncertainty. He argues Wall Street is driven by two things, earnings and interest rates, and that good earnings are made by innovative companies selling to customers, not in Washington. He says the factors that mattered before the election, earnings, inflation and interest rates, still matter now that it is over.
“Probably much less than most people think. Markets are up today because they prefer clarity over uncertainty. ... what's driving Wall Street is always the same thing. The same two things, earnings and interest rates. And good enough earnings aren't made in Washington.”at 0:58
UBS On-Air: Viewpoints with Burkhard Varnholt - A global markets podcast (Ep. 76) ·
Earnings growth is outpacing index gains and the P/E cheapening is healthy; the bull market can keep climbing.
S&P 500 forward earnings are up 31% this year, but that lifted the index only about 10%, because the market's P/E cheapened by 14%. Burkhard calls this cheapening healthy, since bull markets die in euphoria. He argues that as long as earnings keep climbing, the bull market is usually doing fine, a contrarian read on the 'fear of missing out' being fading while 'fabulous earnings momentum' drives the rally.
“So the S and P 500 forward earnings this year are up 31%, but that only lifted the index around 10%. ... While the stock market's PE cheapened by 14%. And, you know, from my contrarian perspective, this cheapening is healthy because bull markets die in euphoria.”at 2:53
UBS On-Air: Viewpoints with Burkhard Varnholt - A global markets podcast (Ep. 76) ·
China tech selloff reflects Chinese weakness, not AI failures; stimulus could reverse it quickly.
The STAR 50 index is down 40% over four months. Burkhard thinks this is driven more by China's weakness than by AI failures. Chinese investors are still spooked by the real estate crisis, and many Chinese companies prioritise market share over profits, so their exports are exporting deflation. That hurts their earnings and the Chinese stock market. He argues from a contrarian view that government stimulus is coming, that officials will re-emphasise profits, and that the market could turn around quickly once bad memories fade.
“I think that's probably more driven by China weakness than by AI failures. ... There'll be government stimulus. ... Bad memories fade, and then suddenly this market can turn around very quickly.”at 3:48
UBS On-Air: Viewpoints with Burkhard Varnholt - A global markets podcast (Ep. 76) ·
Investors should make sure they hold enough cybersecurity companies, as the heist-driven spending will persist for years.
The $6.5 billion crypto heist was shocking, and Burkhard suspects bad actors are using AI. A hack of this kind was waiting to happen somewhere. Because cybersecurity companies will be needed for the next couple of years, he argues investors should check that they are sufficiently invested in them.
“Investors should probably double check that they're invested sufficiently into cybersecurity companies because they will be prescribing on this for the next couple of years.”at 5:08
UBS On-Air: Viewpoints with Burkhard Varnholt - A global markets podcast (Ep. 76) ·
The heist exposed crypto's dependence on centralised exchanges, undermining its decentralised premise and trust in digital payments.
Many thought crypto was decentralised by design, but the heist showed it cannot do without a central exchange, and that is where the hackers struck. Burkhard also says the hack undermines trust in digital payments. He points to the North Korea link as a further geopolitical risk.
“For one, it exposed crypto's key vulnerability while many thought it to be decentral by design. Turns out it can't do without a central exchange, and that's precisely where they hack it.”at 5:12
UBS On-Air: Viewpoints with Burkhard Varnholt - A global markets podcast (Ep. 76) ·
Bond markets are less worried about inflation and deficits, accepting a productivity-led growth view with well-behaved rates.
With the 10-year Treasury yield back below 5%, Burkhard says the bond market is less worried than a few months ago about inflation, debt and the deficit. He says it is not euphoric, just less worried. He argues bond markets can spot a seismic shift before others do, and that the calmer market is accepting his 'roaring twenties' view of productivity, contained inflation and well-behaved interest rates.
“I think the bond market just seems a little less worried than it was a few months ago. ... not euphoric, just less worried. ... today, they're really accepting our roaring twenties view about productivity, inflation, and well behaved interest rates.”at 6:29
UBS On-Air: Viewpoints with Burkhard Varnholt - A global markets podcast (Ep. 76) ·
Europe has a structural investment case, with growth and returns concentrated in its periphery.
Based on travel in Europe's periphery and on market data, he argues Europe's growth is coming from the periphery rather than the core. Peripheral stock markets have outperformed the broader US market over the four-year bull run, while Germany, the core, lagged. He sees a structural investment boom building around energy security and infrastructure build-out. That boom is largely politically driven, and he says the trains have left the station. He also sees a productivity increase in Europe, smaller than in the US, that partly leverages US high-tech without the massive capex, so it is less capital-intensive.
“I think there's a structural investment case for Europe, but not necessarily where most people are looking.”at 3:53
UBS On-Air: Viewpoints with Burkhard Varnholt - A global markets podcast (Ep. 75) ·
France's recent spread widening is mostly global yields, not a eurozone crisis; markets are disciplining politics.
Street protests should not be confused with a risk of France triggering the next eurozone crisis. France has a large, diversified economy with globally competitive champions in luxury, tech, defence and energy. Its government debt has average maturities of about nine years or more, so there is no liquidity problem, only a growing debt burden. France also has Europe's highest savings rate, about 19%, which is a backstop that could be tapped by lowering the high taxes on bond holdings. He estimates about two-thirds of the recent credit spread widening came from the global rise in bond yields rather than from news on French debt service. Moody's and S&P confirmed France's rating, and the ECB has not stepped in because it would not help. He reads the spread move as a healthy signal from markets to parliament.
“most of the bond spread increases, the credit spread increases of the recent weeks, we believe even about two thirds of this, was probably driven more by the global increase of bond yields”at 8:28
UBS On-Air: Viewpoints with Burkhard Varnholt - A global markets podcast (Ep. 75) ·
European stocks can keep their strong run, driven by earnings momentum, cheap valuations and possible reform.
Earnings momentum in Europe has been strong and he expects it to stay strong. European markets are about a third cheaper than the US even though European bond yields are significantly lower than US yields. Europe's savings rate is about 15% versus about 5% in the US, which he reads as pent-up demand for future consumption or investment. He also sees hope for political change on the capital markets union, banking union, cutting red tape and competitiveness, though he is unsure how much is talk versus action. Background: European periphery markets such as Hungary, Romania, Greece, Poland and Spain roughly tripled or rose 130-250% over the four-year bull market, and the top seven outperformed the S&P 500, which he takes as evidence of fundamental improvement in European business and economics.
“Number one, we think earnings momentum has been strong and will continue to be strong, and that's what I see sense here.”at 9:41
UBS On-Air: Viewpoints with Burkhard Varnholt - A global markets podcast (Ep. 75) ·
The bull market, four years old, still has legs; investors should stay fully invested despite worries.
The bull market began on October 13, 2022, when the S&P 500 bottomed near 3,500, and has since more than doubled. The speaker still believes it has further to run. He argues investors should stay fully invested because bull markets must climb a wall of worry, and global stocks are being lifted by record corporate profits. He implies a horizon of about a year, saying the next bull-market birthday should come in October 2027.
“And, you know, as I've said before, I still believe it has legs to run for longer.”at 1:57
UBS On-Air: Viewpoints with Burkhard Varnholt - A global markets podcast (Ep. 74) ·
Governments missed the cheap refinancing window and are now boxed in, facing tax hikes, austerity or fiscal repression.
Large economies overspent fiscally in recent years and almost all failed to lock in cheap long-term funding during the pandemic, when US 10-year yields traded near 38 basis points and European yields were mostly negative. Governments are now squeezed between inflation, rising debt-service costs, fiscal gridlock and competing bond issuance from global capex. The speaker expects policy responses ranging from tax increases and austerity to yield curve control and other forms of fiscal repression, since raising taxes rarely wins re-election and cutting spending is very hard. He concludes that bears draw the wrong conclusion from this and that a globally diversified portfolio, not cash, is the best hedge.
“large economies around the world have been fiscally overspending in the last couple of years... they really almost all entirely missed that golden opportunity... So now they're boxed in.”at 2:33
UBS On-Air: Viewpoints with Burkhard Varnholt - A global markets podcast (Ep. 74) ·
US corporate profits are at record highs and should keep rising, supporting stocks and the economy.
US corporate America is highly profitable, with record profit margins in almost all segments of the economy. Pretax profit reached a record $4 trillion and after-tax profit a record $3.9 trillion through Q2, about a third of the global profit pool this year. Profits earned abroad by US companies also hit a record $1.2 trillion, which the speaker says shows the global economy is still doing well. Dividends have lagged profit growth, so undistributed profit reached a record $1.7 trillion, on top of record capex of $4.7 trillion this year. Profit growth outpacing employment growth also shows rising productivity. The speaker cites the IMF's forecast of 3.4% global growth next year, up from 3.1% this year, as further support. He argues profits are the lifeblood of the economy, funding taxes, jobs and investment, and he expects profits to keep rising through 2027.
“corporate America is incredibly profitable with a record high profit margin in almost all segments of the economy.”at 5:24
UBS On-Air: Viewpoints with Burkhard Varnholt - A global markets podcast (Ep. 74) ·
Productivity gains offset aging-driven labor shortages, so the current inflation rise and bond yields should reverse in 2027.
A productivity boom is offsetting labor shortages caused by population aging in the US, Asia and Europe. Because profit growth outpaces employment growth, there is no wage-price spiral that would sustain inflation. The speaker says this explains why the current rise in inflation and bond yields should reverse, at least in 2027, while corporate profits continue to rise.
“this productivity boom... offsets labor shortages, which are caused by population aging... explains why there is no wage price spiral that causes perpetuating of inflation... we expect this current increase in inflation and bond yields to reverse at least in 2027”at 7:04
UBS On-Air: Viewpoints with Burkhard Varnholt - A global markets podcast (Ep. 74) ·
Shows
- UBS On-Air · 3 episodes
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