Global markets plummeted Thursday, fueling concern that long-term positive market trends could be about to end — but UBS' chief economist has branded those fears as simply "noise."
Thursday saw stocks tank in markets around the globe. Asia-Pacific indexes like the Shanghai composite fell 5 percent while the pan-European Euro Stoxx 600 Index hit its lowest in 20 months. The sharp decline has raised concerns that trade tensions and rising interest rates could contribute to the end of the bull market – the current state of trading where stock prices are steadily rising.
Paul Donovan, chief economist for UBS, told CNBC that Thursday's tremors would not have a long-term impact, dubbing the recent challenges for investors as mild constraints that were "not that important economically."
"Trade taxes will hurt equities far more than they hurt the economy, because about 80 percent of global trade is conducted by large multinational companies," he said.
"Large-listed companies in the States are only 25 percent of the economy. As we start to see the cost of the trade taxes creeping into supply chains, it is going to create volatility in the equity markets while the economy carries on OK, which is why I think the (U.S. Federal Reserve) is right to be following this hike-pause cycle."
Adding that almost half of America does not own any equities, Donovan emphasized that to the majority of Americans the market decline was "not devastating."
"They've still got jobs, they're still getting pay rises — that's what matters to the economic cycle," he said. "The economic cycle carries on and the Fed will judiciously change quantitative and monetary policy."
Donovan also noted that U.S. Treasurys (U.S. government bonds) were seeing slower investment from foreign central banks.