Latest / Best of Business / Shane Solly: Harbour Asset Management expert on what the markets are projecting ahead of RBNZ announcement

Transcript

Shane Solly: Harbour Asset Management expert on what the markets are projecting ahead of RBNZ announcement · 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 Asset Managements with us Allo.
• 0:18
  Speaker 3: Shane, ay you that.
• 0:20
  Speaker 2: So, what are the markets expecting from the Reserve Bank
• 0:22
  Speaker 2: in a couple of days.
• 0:24
  Speaker 4: Yeah, so, look, the market's fully fact did in a
• 0:26
  Speaker 4: zero point two percent cut in rates.
• 0:29
  Speaker 3: So that take us to two twenty five is official
• 0:31
  Speaker 3: cash rate.
• 0:32
  Speaker 4: In fact, it's priced in a zero point two seven
• 0:35
  Speaker 4: to two twenty three of them.
• 0:36
  Speaker 3: It says the market's getting a little bit of hia themselves.
• 0:38
  Speaker 4: Maybe the main focus here there will be on how
• 0:40
  Speaker 4: much the Reserve Bank of New Zealand signals the possibility
• 0:44
  Speaker 4: of further cuts. Does it come out and sug just
• 0:46
  Speaker 4: another round of cuts given inflations stable but unemployment growth
• 0:51
  Speaker 4: is still modest, or does it actually indicate that using
• 0:53
  Speaker 4: cycle is over well close to over, I should say,
• 0:56
  Speaker 4: and let the cuts do the job of really picking
• 0:58
  Speaker 4: up the economy after quite a chunky series of cuts
• 1:01
  Speaker 4: of the last year or so. One thing here that
• 1:04
  Speaker 4: we need to keep watching for is this the New
• 1:06
  Speaker 4: Zealand doll.
• 1:06
  Speaker 3: It's pretty weak.
• 1:07
  Speaker 4: We near a five of your fifty six cents roughly
• 1:09
  Speaker 4: against the US dollar. That's doing a lot of the
• 1:12
  Speaker 4: work for the Reserve Bank. So yeah, when we look forward,
• 1:15
  Speaker 4: markets actually pricing and the official cash right had a
• 1:17
  Speaker 4: low of two point one percent in May twenty twenty six,
• 1:20
  Speaker 4: so market thinks there's going to be more rate cuts.
• 1:22
  Speaker 3: That'll be the interesting part of the discussion.
• 1:25
  Speaker 2: Now, we're about halfway through the current company reporting season
• 1:28
  Speaker 2: here in New Zealand. Is the tone getting a little
• 1:30
  Speaker 2: bit more upbeat? Do you think?
• 1:32
  Speaker 3: Yeah? Yeah, we are halfway through.
• 1:33
  Speaker 4: It's for the September period, and so far we've observed
• 1:37
  Speaker 4: more profit beats against consensus market expectations and messes. That's
• 1:41
  Speaker 4: pretty good. The last three years we've actually been seeing
• 1:44
  Speaker 4: more misses than beats, so it feels like there's a
• 1:46
  Speaker 4: little bit of a trend change something interesting.
• 1:48
  Speaker 1: Now.
• 1:48
  Speaker 4: Obviously, up to September, the economy is pretty challenging and
• 1:52
  Speaker 4: some companies has been calling that out. So there's been
• 1:54
  Speaker 4: the odd little disappointment in terms of timing versus markets
• 1:58
  Speaker 4: investors getting hid themselves. But you know, really the underlying
• 2:02
  Speaker 4: results are looking okay. We're seeing some companies really delivering
• 2:05
  Speaker 4: on their own self help, and those are the companies
• 2:08
  Speaker 4: that you know, when you look at it, they'll do
• 2:10
  Speaker 4: okay with the economy recovers in a hurry or not.
• 2:12
  Speaker 4: And that's where I think investors are starting to focus on.
• 2:15
  Speaker 4: Most companies are talking about since September, they've seen a
• 2:19
  Speaker 4: noticeable pickup in activity.
• 2:21
  Speaker 3: So we are seeing improven activity. So maybe that trend continues.
• 2:24
  Speaker 2: Yeah, brilliant stuff. Now listen to the US markets. We've
• 2:26
  Speaker 2: got a bit weird last week. Where did things get
• 2:28
  Speaker 2: to over the weekend?
• 2:29
  Speaker 3: Yeah? Yeah, so yeah, good good points.
• 2:31
  Speaker 4: So the US S and P five hundred, that's the
• 2:33
  Speaker 4: main index we all talk about, it was down about
• 2:35
  Speaker 4: one point nine percent last week, many due the technology
• 2:39
  Speaker 4: stocks falling, some risks around the US Federal Reserve not
• 2:42
  Speaker 4: cutting rates, in weak consumer confidence in comparison, zeon markets,
• 2:46
  Speaker 4: se markers and down zero point three So we did
• 2:49
  Speaker 4: our job of protecting. But the US markets on Friday
• 2:52
  Speaker 4: they bounced. There was a couple of the US Fed
• 2:55
  Speaker 4: Reserve speakers came out and suggested actually the central bank
• 2:58
  Speaker 4: headroom to ease cut rates, particularly given cool and labor markets,
• 3:03
  Speaker 4: and that actually saw the US market have a bit
• 3:05
  Speaker 4: of a flip and they needed stronger. I've seen a
• 3:08
  Speaker 4: bit of a pricing and of a December rate cut
• 3:10
  Speaker 4: back to seventy percent, So the expectation seventy percent of
• 3:13
  Speaker 4: the markets expecting the US feed to cut in December.
• 3:17
  Speaker 4: That's quite a big increase, and simile we're seeing a
• 3:20
  Speaker 4: bit of a bounce. US futures are showing that the
• 3:24
  Speaker 4: US market may be up zero point four percent tonight.
• 3:26
  Speaker 4: Our market here in his ZALM is up zero point
• 3:28
  Speaker 4: six so a little bit of a better time coming.
• 3:30
  Speaker 3: At the end of the last week.
• 3:31
  Speaker 2: Happy to hear that, Shane. Thanks very much, Shane, Sally
• 3:33
  Speaker 2: Harbor Asset Management.
• 3:35
  Speaker 1: For more from News Talks b listen live on air
• 3:38
  Speaker 1: or online, and keep our shows with you wherever you
• 3:41
  Speaker 1: go with our podcast on iHeartRadio.