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Shane Solly: Harbour Asset Management expert on oil prices going up following Trump's blockade threat · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks. They'd be
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  Speaker 1: follow this and our wide range of podcasts now on iHeartRadio.
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  Speaker 2: Shane Solly Harbor Asset Management is with us. Hello, Shane,
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  Speaker 2: how are you the Yes? So, how did the markets
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  Speaker 2: react to the US deciding that they're going to do
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  Speaker 2: the blockade?
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  Speaker 3: Yeah, we look suddenly as you called out there, the
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  Speaker 3: will price was a key indicated there we're back up
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  Speaker 3: above one one hundred and one a barrel. It got worse. Obviously,
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  Speaker 3: mister Trump's gone on and say that he's unconcerned with
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  Speaker 3: their rangeings come back. I don't care they can come
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  Speaker 3: back or not. I'm all fine. The details of the blockade, obviously,
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  Speaker 3: we don't know yet until it's to supposed to start
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  Speaker 3: Washington time, ten o'clock tonight. But we did see the
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  Speaker 3: wider Asian markets down between sort of half a percent
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  Speaker 3: and one percent in the US dollar, up, gold down
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  Speaker 3: bond yield. It's a little bit up again. So we
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  Speaker 3: saw them drop last week after the ceasefire, and they've
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  Speaker 3: gone back to where they were. So really we're seeing
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  Speaker 3: this market it's being very weary about the residience and
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  Speaker 3: timing of the ceasefire to the uish sheer market futures
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  Speaker 3: is shown, the market should be down about zero. But look,
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  Speaker 3: if we go back to if there is a realistic
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  Speaker 3: CIS fire and we do get a de escalation, even
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  Speaker 3: if it's a bit of a noisy de escalation, markets
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  Speaker 3: kind of position to go. Bet that we've seen if
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  Speaker 3: we say stable geopolitical, better macro policies, market investors have
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  Speaker 3: really taken a lot of risk out, so we're back
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  Speaker 3: to interesting that we'll see heather pretty choppy though.
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  Speaker 2: Yeah, it really is quite choppy. And then I see
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  Speaker 2: A and Z and we've talked to Sharon Zola of
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  Speaker 2: A and Z about the saying that that there will
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  Speaker 2: be three rate hikes this year. What do you make
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  Speaker 2: of that?
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  Speaker 3: Yeah, look, I think it's about being pre emptive, so
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  Speaker 3: taking the obviously as it saying, hey, look take the
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  Speaker 3: medicine now, get ahead, get new true early, which means
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  Speaker 3: taking this terminal rate special case rate to three percent
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  Speaker 3: by October when we look at what the market's priced
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  Speaker 3: and the market's actually priced, and more than that, we
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  Speaker 3: go through the June next year. So it's about timing
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  Speaker 3: when it happens early or later. What we know is
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  Speaker 3: a real economy at the moment. It's struggling and certainly absorbing.
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  Speaker 3: And this tightening, whether by the Reserve Bank and ze
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  Speaker 3: On hiking rates or the banks actually front running the
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  Speaker 3: potential move we put that ballot into fuels. There's a
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  Speaker 3: bit of pressure going out there in New Zealand economy. Today.
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  Speaker 3: We had the purchasing services next out and that wasn't great.
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  Speaker 3: Were the performances A Serivers indexestions there was down the
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  Speaker 3: forty six, down from forty eight last month. So that's
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  Speaker 3: telling us that really consumer sensitive part of the economy, accommodation,
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  Speaker 3: cafes and so forth, is in the crunch already. If
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  Speaker 3: you crank up those rates too quick, we're going to
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  Speaker 3: see a company a country looking at a recession again.
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  Speaker 2: Now listen, this was interesting what happened today. Fontira sharholders
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  Speaker 2: fund today and A two milk share prices went in
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  Speaker 2: completely different directions today.
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  Speaker 3: What happened there, Yeah, big divergence. Fontira Shielders Fund up
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  Speaker 3: at nine point eight percent to six dollars fifteen A
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  Speaker 3: two down twelve point four percent nine eighty two. So
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  Speaker 3: Fonterra appoint announced the appointment of the local Frontier executive
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  Speaker 3: Richie Allen COO and also confirmed this payout of three
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  Speaker 3: point tb and tomorrow that's going to hlit people with
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  Speaker 3: bank accounts, So good announcement. Messed out is well regarded
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  Speaker 3: and as ACHII so people were worried about somebody being
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  Speaker 3: dropped and parachuted. And contrast A two can that with
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  Speaker 3: quite a significant twenty twenty six four coast downgrade, very
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  Speaker 3: much driven by supply supply chain disruption. And given where
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  Speaker 3: the A two ship price has been priced at quite
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  Speaker 3: a high multiple, it's so sort of stop price weaker.
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  Speaker 3: The guidance is about ten to fourteen percent down. Quite
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  Speaker 3: a lot of it is to do with product getting
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  Speaker 3: into China, particularly through Chinese clearance, through testing, and some
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  Speaker 3: of the costs associated with getting product and have gone up,
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  Speaker 3: and of course its manufacturer partner, Sinelay is having a
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  Speaker 3: few problems to it. So you look the at ship price,
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  Speaker 3: quite a sharp drop there. It's going to have to
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  Speaker 3: show us that we've got product going back into China
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  Speaker 3: as normal again before we perhaps see that ship. See
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  Speaker 3: you to sustained recovery.
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  Speaker 2: Yeah, hey, Shane, as always good to talk to you mate.
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  Speaker 2: Look after yourself and well Chat next week that Shane
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  Speaker 2: Solly Harbor Asset Management.
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