Latest / Best of Business / Shane Solly: Harbour Asset Management expert on the 'volatile' state of AI-based investments

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Shane Solly: Harbour Asset Management expert on the 'volatile' state of AI-based investments · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talks. There'd be
• 0:12
  Speaker 1: follow this and our wide range of podcasts now on iHeartRadio.
• 0:16
  Speaker 2: Shane Solly Harbor Esset Managements with us Alo Shane and
• 0:20
  Speaker 2: we've been enjoying your Chiprick pun.
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  Speaker 1: How good is that? But seriously, are we on course
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  Speaker 1: for a semiconductor chiprick?
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  Speaker 2: Look? It's Look, we've seen a lot of the leverage
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  Speaker 2: come out. It's a very crowded trade. There's a lot
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  Speaker 2: of people in there, a lot of hot money, a
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  Speaker 2: lot of people borrowing money to deliver up. So it
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  Speaker 2: has definitely seen a lot of heat come out. It's
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  Speaker 2: all about this capital investment debate and artificial intelligence and
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  Speaker 2: whether we're aging see decent returns on the investment and
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  Speaker 2: how we fund the required investment. There's a lot of
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  Speaker 2: new compute models coming out. There's things like token discounting,
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  Speaker 2: and it's really challenging the model. So yeah, there has
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  Speaker 2: been a bit of a quite a sharp pullback. Some
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  Speaker 2: of the more sensitive markets, the Korean and Japanese ship
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  Speaker 2: markets are very leveraged this AI CAPI. They were pretty
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  Speaker 2: weak last week. They've seen a bit of a recovery,
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  Speaker 2: but they're still pretty Viltile. I don't know whether we're
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  Speaker 2: going to see a big drop from here, but we've
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  Speaker 2: certainly seen a lot of heat taken out.
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  Speaker 1: How's the share market, by the way, over in the
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  Speaker 1: US expected to open after the long weekend there?
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  Speaker 2: Yeah, Look, so they are indicating that futures market, I
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  Speaker 2: should say, are indicating the market will be up and
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  Speaker 2: when it opens tonight about zero point three percent for
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  Speaker 2: the wider s and P five hundred. But this the
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  Speaker 2: tech heavy nasdeck, it was up about one point one
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  Speaker 2: one point two percent of here in the day, it's
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  Speaker 2: actually shown to be about plus point eight. So again
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  Speaker 2: coming back to this AI shop, we had some cooler
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  Speaker 2: US non FIO payrolls last week, which takes some pressure
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  Speaker 2: out of the inflation system. We've also seen Opic open
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  Speaker 2: up the taps with another one hundred and eighty eight
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  Speaker 2: thousand barrels per day of oil, so that's lowering the
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  Speaker 2: pressure on the US vigual reserve to increase rates tonight.
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  Speaker 2: We've got a US Institute of Supply Management Services index
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  Speaker 2: that's a lead indicator and activity. If it's a bit
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  Speaker 2: soft below headlines, below expectations, then that will help with
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  Speaker 2: interest rates falling if it's a bit firmer than we
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  Speaker 2: might see the rates that are being a bond years
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  Speaker 2: that have been falling actually back up. That print last
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  Speaker 2: month was fifty four point five, still expanding, and of
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  Speaker 2: course later this week here we've got the excitement of
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  Speaker 2: SpaceX joining the nasdack on Tuesday, so that'll be a
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  Speaker 2: bit of a test with the AI interesting as well.
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  Speaker 1: Yeah, locally, obviously, the thing that we're going to look
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  Speaker 1: for is the OCR decision on Wednesday. What's the market
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  Speaker 1: expecting there?
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  Speaker 2: Yeah, so the market's pricing at about a seventy five
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  Speaker 2: percent chance that the Reserve Bank increases rates by zero
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  Speaker 2: point two five percent on Wednesday, simodly that fall on
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  Speaker 2: oil prices and dropping. We've dropping inflation expectations in the
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  Speaker 2: recent business and consumer confidence. It's taken some of the
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  Speaker 2: pressure off the Reserve Bank to lift rates, but we've
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  Speaker 2: still got a sticky underlying inflation rate that suggests that
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  Speaker 2: the irbus in might want to keep working its way
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  Speaker 2: back to a three percentage type neutral rate. The focus
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  Speaker 2: for markets will be on the language we're still learning
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  Speaker 2: about this new Reserve Bank board and governor, So it
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  Speaker 2: would be the language, the tone, so is it a
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  Speaker 2: dubvish hike by increasing rates but we're not going to
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  Speaker 2: really pour on the heat, or is it more of
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  Speaker 2: a hawkish pause where no rate hike but actually we're
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  Speaker 2: really watching it, so it's going to be all about
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  Speaker 2: the rates. That didn't impact on markets today. We actually
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  Speaker 2: saw the New Zealand share market up one percent led
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  Speaker 2: by fishing piplan for two and a two in New
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  Speaker 2: Zealand ten year, gave my bond year it's actually down
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  Speaker 2: zero point three percent by four point four three percent,
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  Speaker 2: so market's not worried at this stage.
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  Speaker 1: Good stuff.
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  Speaker 2: I thank you very much. Shane.
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  Speaker 1: Talked to you next week. Shane, Sally Harborreset Management. For
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