Latest / Best of Business / Shane Solly: Harbour Asset Management expert on the BNZ Business NZ Performance of Services Index results

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Shane Solly: Harbour Asset Management expert on the BNZ Business NZ Performance of Services Index results · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks'd be follow
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  Speaker 1: this and our wide range of podcasts now on iHeartRadio.
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  Speaker 1: Shane Sally Harbor Asset Management is with us ELO.
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  Speaker 2: Shane, Hey here that Hey, what happened with that sell
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  Speaker 2: off in the offshore markets on Friday? Did it affect us?
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  Speaker 2: We assume the she market ran into the bond market.
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  Speaker 2: Bond yields cover my bond years increased. We've obviously seen
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  Speaker 2: oil prices back up, and what we saw was consumer
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  Speaker 2: price inflation and producer price inflation in the US above expectations.
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  Speaker 2: So that's many investors have started to think about does
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  Speaker 2: the US federal reserves start increasing rates and hither At
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  Speaker 2: the start of the year, people were thinking they're going
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  Speaker 2: to cut rates. Now we're thinking about how hard and
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  Speaker 2: fast they're to go long term bond years. This is
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  Speaker 2: the ones that sort account when we're valuing investments like shares.
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  Speaker 2: The US ten year bonds up above four point six percent,
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  Speaker 2: thirty year bonds above five point one, and that is
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  Speaker 2: increasing the hurdle we need to invest in shares. US
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  Speaker 2: bonds up half a percent since the start the Middle
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  Speaker 2: East conflict. So yeah, US market was now on led
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  Speaker 2: by Tech and that's quite sensitive to these bond years.
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  Speaker 2: Could be a bit of profit taking Center seventeen percent
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  Speaker 2: rally in seven weeks. Locally our tenure bonds up eight
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  Speaker 2: basis points to four point eight four and we had
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  Speaker 2: quite a broad sell off in the zone market. Sheer
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  Speaker 2: market down one point six percent, led both Fisher and
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  Speaker 2: Park Healthcare two Orpen Airport. But there was not a
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  Speaker 2: lot of green on the screen today either, I can go.
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  Speaker 1: What about the Chinese data that we got? The economic data.
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  Speaker 2: Yeah, again, probably didn't help the market. See they're quite weak,
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  Speaker 2: weaker than below expectations. Export data Oka, but domestic consumption
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  Speaker 2: pretty weak, their fixed acid investment. This is about investing
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  Speaker 2: and capital works that trunk quite sentiment les down one
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  Speaker 2: point six percent for the first four months. That was
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  Speaker 2: a surprise, well below expectation. Retail sales also missed though
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  Speaker 2: only up zero point two percent, and industrial production it
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  Speaker 2: was slower than expected, only out four point one So yeah,
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  Speaker 2: pretty weak numbers relative to expectations. There was an interesting
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  Speaker 2: statement by a spokesperson from a Chinese National Bureau of
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  Speaker 2: Statistics saying China needs to implement more fiscal policies. A
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  Speaker 2: bit more stimulus and open up the taps of monetary
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  Speaker 2: policy and me here in New Zealand, given China as
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  Speaker 2: a big trade partner, that might be quite helpful.
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  Speaker 1: Yeah. Now, what about the PSI and the PMI, because
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  Speaker 1: at first blush and neither of them look that flash.
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  Speaker 2: No, and so performance of Services Index and the Performance
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  Speaker 2: of Manfacturing and index Performance of Services Index is out today.
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  Speaker 2: That's about three quarters of the New Zealand economy. It's
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  Speaker 2: all the services businesses. By definition, it was actually less bad.
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  Speaker 2: It was a less bad data point. Today it was up.
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  Speaker 2: It was at forty eight point nine, which is up
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  Speaker 2: on one point seven on the previous month. It's still
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  Speaker 2: below fifty, so it says we're still contracting, but not
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  Speaker 2: as much as we were. And the bright spot was
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  Speaker 2: new orders, so people buy and getting inventry, and I
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  Speaker 2: think that went up to fifty one point two, so
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  Speaker 2: above it's expanding. Maybe that's a bit of a hoarding
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  Speaker 2: the heather. I'm a bit anxious about that. The good
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  Speaker 2: news is last week on Friday, where the PMI purch
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  Speaker 2: Performance and Manufacturing Index fall to just above fifty. You
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  Speaker 2: can bind the two. We're about forty eight point six,
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  Speaker 2: So it still suggests we're got a bit of a
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  Speaker 2: soft contraction in the US economy, not a big surprise
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  Speaker 2: to a lot of people will be listening, and of course,
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  Speaker 2: but when we blend that with the consumer price inflation
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  Speaker 2: going up about three point four, it's looking a little
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  Speaker 2: bit stagflationary and that creates a difficult trade off for
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  Speaker 2: the Reserve Bank next week with their monetary policy statement.
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  Speaker 1: All right, hey, Shane, as always, thanks very much, ma'am,
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  Speaker 1: talk to you in a week. Shane solely Harbor Asset Management.
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