Novelli expects more volatility on virus setbacks

Bloomberg

Negative surprises on Covid-19 crisis may fuel further market volatility in Europe, including potential corporate defaults next year, according to Piero Noelli, co-head of UBS Group AG’s investment bank.
Lockdowns in Europe and restrictions on mobility will cause a double dip in growth in the fourth quarter, he
said in an interview with Bloomberg TV’s Francine Lacqua. Setbacks on a Coronavirus vaccine such as delays in approval could impact markets that had surged in recent days with greater clarity the US election.
Investors are now anticipating that Joseph Biden will win the US presidential election and preside over a split Congress, a major shift from earlier expectations of a sweeping victory for Democrats. That affects assumptions about US stimulus, corporate taxation and regulation, Novelli said.
The pandemic has fueled a surge in trading across the globe, and allowed major investment banks to boost revenue while setting aside billions of dollars for an expected wave
of Covid-19 related
borrower defaults.

Novelli and co-head Robert Karofsky have narrowed the focus of the UBS investment bank on the consumer, industrial, TMT, and financial institutions industries, while tying the unit more closely to the wealth management business and seeking to boost cooperation between regions. They also cut lower-ranking jobs and reshuffled management.
The pandemic has fueled a surge in trading across the globe, and allowed major investment banks to boost revenue while setting aside billions of dollars for an expected wave of Covid-19 related borrower defaults. Despite a decrease in market volatility and an anticipated slowdown in trading, activity remained robust into the third quarter.