Latest / Best of Business / Brad Olsen: Infometrics Principal Economist on the market's response to Donald Trump's comments about the economy

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Brad Olsen: Infometrics Principal Economist on the market's response to Donald Trump's comments about the economy · Best of Business

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  Speaker 2: Like we predicted for you yesterday.
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  Speaker 3: The US Market's got the jitters today, this after Donald
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  Speaker 3: Trump's comments about the economy refused to rull out of recession.
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  Speaker 3: Wall Street worst day for twenty twenty five so far,
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  Speaker 3: S and P five hundred down two point seven, NASDAK
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  Speaker 3: down four. Here in Australia and New Zealand, we were down.
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  Speaker 3: The NZEX fifty the ASEX two hundred, both down point
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  Speaker 3: eight percent. Brad Olsen is Informetric's principal economists with me. Now, hey, Brad,
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  Speaker 3: good evening. Is this an overreaction do you reckon or
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  Speaker 3: a real concern?
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  Speaker 4: I think it's some pretty valid concerns coming out of
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  Speaker 4: the US, and really this is just condensing all of
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  Speaker 4: that risk, all of that worry, all of that uncertainty
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  Speaker 4: that's been coming through. When you know the president is
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  Speaker 4: asked directly, are we on track for a recession and
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  Speaker 4: he doesn't immediately say no, we're not. I think that's
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  Speaker 4: a pretty strong signal to investors, and certainly it's how
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  Speaker 4: the market's taken it that actually the worry from the
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  Speaker 4: new US president over how people's stocks do, how the
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  Speaker 4: markets are going, how the economy is going. He's willing
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  Speaker 4: to sort of give that up, and he's showing that
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  Speaker 4: that's already happening. So I think people have been sort
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  Speaker 4: of wavering. If you look at where the markets were
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  Speaker 4: after Trump was elected, there was a real sort of
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  Speaker 4: rally that came through an expectation there was a lot
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  Speaker 4: of growth possibly coming forward, and everyone sort of ignored
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  Speaker 4: the negatives. But I think there's been something like three
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  Speaker 4: point four trillion US dollars that's been wiped off since
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  Speaker 4: you know, those some of those higher points have come through.
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  Speaker 4: So you are now into a position where I think
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  Speaker 4: people are really going, Look, we're just not sure what
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  Speaker 4: the fundamentals of growth in the US economy are. Of course,
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  Speaker 4: how the US economy goes has implications for global growth, exports,
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  Speaker 4: and everything else, which is why our markets and the
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  Speaker 4: Asian markets have also taken a dive. Long story short,
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  Speaker 4: no one's quite sure where they're making money in the short.
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  Speaker 3: Term from yeah, and it is a concern.
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  Speaker 2: I mean, I was saying last night that forget about Hipkins,
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  Speaker 2: Luckson's biggest problem or biggest political opponent is actually Trump,
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  Speaker 2: because he's he could potentially put the kibosh on our
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  Speaker 2: growth plans, right. I mean that is a real risk, absolutely.
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  Speaker 4: And given that, you know the focus of our sort
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  Speaker 4: of trade growth over the last year or two has
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  Speaker 4: been a lot more around the US economy. You know,
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  Speaker 4: that was an area that did quite well for US,
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  Speaker 4: but it's now in a much shakier position. I think
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  Speaker 4: also it doesn't help the economic tone. You know, economists
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  Speaker 4: in New Zealand, and to be fair, across the world
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  Speaker 4: have talked about some of those greenish shoots starting to
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  Speaker 4: show through this year, some of those better economic numbers.
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  Speaker 4: Really hard to convince people that that's actually coming through
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  Speaker 4: when all they're reading about is that the markets are
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  Speaker 4: losing money. If they do go and check their kei
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  Speaker 4: we saver or you know they're investing account at showing
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  Speaker 4: a bit of a blood bath there. I mean, none
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  Speaker 4: of those numbers are easy to comprehend, and I think
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  Speaker 4: it does just put the jitters amongst not only the markets,
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  Speaker 4: but actual real households going well, look, I'm putting my
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  Speaker 4: money into these investments. I'm a little bit worried. I
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  Speaker 4: do think it's important that people realize that there always
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  Speaker 4: is quite a lot of volatility in the numbers. That's
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  Speaker 4: sort of the nature of the stock market. And unless
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  Speaker 4: you're really good at putting three phones to your ears
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  Speaker 4: and yelling into all of them like they do at
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  Speaker 4: the New York Stock Exchange, you probably shouldn't be too worried.
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  Speaker 4: You shouldn't be thinking about those sort of day day variations.
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  Speaker 4: You should be hopefully thinking about it for the long term,
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  Speaker 4: but assessing your risk, because let's be clear, this risk tone,
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  Speaker 4: this worry, this volatility, it's not going away anytime soon.
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  Speaker 2: Brad, Thank you for that. Brad Olsen and the metrics
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  Speaker 2: principle economists on News Talk SEDB.
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