UBS outlines stocks, bonds, dollar and gold positioning as Fed hike odds rise

UBS says strongerthanexpected U.S. jobs data has increased the chance of a September Federal Reserve rate hike, and that any related market volatility could create portfolio opportunities. The bank said investors may look for dips in equities, consider higherquality longerdated bonds, reduce excess dollar exposure on strength, and use pullbacks in gold to build a longerterm hedge. UBS argued that a Fed responding to solid economic growth is more constructive for markets than one reacting to persistent inflation and weak growth. UBS remains positive on global equities, citing support from artificial intelligence investment, steady economic activity and earnings growth. In bonds, it warned that shorterduration Treasurys may be less attractive if policy rates move higher, while medium to longterm yields could offer better income and diversification. The firm also said a stronger dollar could be supported by tighter policy, while gold remains a portfolio hedge amid inflation, geopolitics and fiscal concerns.