2025-11-02 22:57:00
UBS said that while no formal trade or cooperation agreement emerged from the latest U.S./China discussions, the tone of the talks was positive enough to support market sentiment. The bank described the outcome as a “modestly positive” result for global investors, suggesting it could sustain recent rallies in both U.S. and Chinese equities.
UBS analysts noted that markets had braced for potential friction between the world’s two largest economies, but the absence of any escalation, coupled with signs of constructive dialogue, may be enough to reassure investors. “A modestly positive outcome on this U.S./China risk catalyst may be sufficient for global markets,” the note said, highlighting that risk appetite remains intact.
The report added that equity strength in both countries has already been underpinned by “strong AI demand and innovation,” which continue to drive technology shares higher. UBS said this backdrop, combined with easing geopolitical tensions, creates room for markets to maintain a firmer tone into year-end, though it cautioned that sentiment remains sensitive to policy or regulatory surprises.
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I can’t say I agree with the UBS take that begins the second paragraph. I think markets were braced for a papering over of the cracks, which is what we got. As for escalation(s), I expect it’ll (they’ll) begin again soon.
As for the final paragraph, yeah. That AI narrative is a non-stop driver. Will it last? Silicon Valley today resembles Wall Street in the run-up to the 2008 crash, enthusiastically cheering on opaque, complex investment schemes. The kind of developments that emerge during financial bubbles tend to follow a familiar pattern.
Humpty Dumpty’s wall keeps getting higher and wobblier, but I’ve no idea when the topple will come.
