Latest / The SME Stream / Monday markets with Forsyth Barr Zoe Wallis talks GDP and financial themes for 2026

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Monday markets with Forsyth Barr Zoe Wallis talks GDP and financial themes for 2026 · The SME Stream

• 0:00
  Speaker 1: Time for a look at the weak ahead for the markets.
• 0:02
  Speaker 1: Thanks to our partners for sythe Bar, Zoe Wallace for
• 0:06
  Speaker 1: sythe Bar Investment strategist is with us now, Zoe, thanks
• 0:09
  Speaker 1: so much for being with us. So we've got New
• 0:11
  Speaker 1: Zealand's GDP out this Thursday, pretty important announce What are
• 0:16
  Speaker 1: we expecting out of that?
• 0:18
  Speaker 2: Yeah, good morning, Michael. Look, what we are expecting is
• 0:21
  Speaker 2: a pretty decent rebound in Q three compared to what
• 0:24
  Speaker 2: we saw in the second quarter. So if you remember
• 0:26
  Speaker 2: in the second quarter of this year, growth foul point
• 0:28
  Speaker 2: nine percent q on q, which was a pretty meaningful contraction.
• 0:32
  Speaker 2: What the sort of market consensus is looking like for
• 0:34
  Speaker 2: this yere is that sorry this quarter September quarter, is
• 0:38
  Speaker 2: that we are looking at GDP growth rising at about point
• 0:41
  Speaker 2: nine percent, so quite a big rebound that would tie
• 0:44
  Speaker 2: in with some of the more positive cyclical turning points
• 0:46
  Speaker 2: that we're seeing coming through in the economy and from
• 0:48
  Speaker 2: company reporting as well. However, it will be a bit
• 0:51
  Speaker 2: of a volatile release in our minds due to we
• 0:54
  Speaker 2: are likely to see some historical revisions to data, possibly
• 0:58
  Speaker 2: revising up that big new netive in the second quarter.
• 1:01
  Speaker 2: Plus this can be a bit of a choppy quarterly
• 1:03
  Speaker 2: release please as well, due to benchmarking exercises et cetera
• 1:06
  Speaker 2: as well. So I think really importantly for the reserve back,
• 1:08
  Speaker 2: we'll be looking through what they're seeing in the fundamental
• 1:11
  Speaker 2: sector results that we see out this week, plus also
• 1:14
  Speaker 2: just keeping an eye on the forward indicators.
• 1:16
  Speaker 1: Yeah, so last time we saw those big drops in manufacturing, construction,
• 1:21
  Speaker 1: and primary industries. So are you saying that there's indicators,
• 1:24
  Speaker 1: clear indicators that things have improved markedly on the results
• 1:28
  Speaker 1: posted in JURNE.
• 1:30
  Speaker 2: Yeah, and look, I think you know, was PAC did
• 1:32
  Speaker 2: a great piece look at the seasonalities and some of
• 1:34
  Speaker 2: the sort of unpredictability of that Q two GDP release
• 1:38
  Speaker 2: as well, So I think there's certainly up potential that
• 1:40
  Speaker 2: that gets revised up compared to where we actually saw
• 1:43
  Speaker 2: that print come out. I also think that you are
• 1:45
  Speaker 2: seeing some of those sectors really turn. So if you
• 1:47
  Speaker 2: look at the a Z business confidence surveys and actually
• 1:49
  Speaker 2: reported activity, if you look at the business en Z
• 1:52
  Speaker 2: performance and manufacturing sector data as well, you're starting to
• 1:55
  Speaker 2: see a pack up in terms of manufacturing activity and
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  Speaker 2: forward orders. You're also seeing you know, ongoing strength in
• 2:01
  Speaker 2: terms of the agricultural and are generally export sectors as well,
• 2:05
  Speaker 2: as well as things like retail spend and also building
• 2:08
  Speaker 2: work put in place start to turn a corner as well,
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  Speaker 2: which has been quite positive.
• 2:12
  Speaker 1: Yeah, and we've got the half year economic fiscal update tomorrow,
• 2:15
  Speaker 1: so how are we looking for that?
• 2:18
  Speaker 2: So that's going to be an interesting one. I think.
• 2:21
  Speaker 2: You know, when you think about where we are versus
• 2:23
  Speaker 2: where we were at May budget, we've seen a bit
• 2:25
  Speaker 2: of a weaker starting point and that will purely be
• 2:27
  Speaker 2: driven by that that Q two GDP data release, and
• 2:30
  Speaker 2: you know, we could growth the first half of this
• 2:31
  Speaker 2: year regardless of what comes out with stats on Thursday,
• 2:35
  Speaker 2: they will roll with those existing numbers, So it gives
• 2:38
  Speaker 2: you a bit of a weaker starting point for the economy.
• 2:41
  Speaker 2: I think one of the most interesting bits will be
• 2:43
  Speaker 2: whether government's still returning forecasting return to surplus in twenty
• 2:47
  Speaker 2: twenty nine fiscal year or whether that gets pushed out
• 2:49
  Speaker 2: a bit from here.
• 2:51
  Speaker 1: Yeah. Okay, so there's sort of fair bit of uncertainty.
• 2:54
  Speaker 1: So what do investors need to consider looking forward into
• 2:59
  Speaker 1: twenty twenty six? Is it too soon to sort of say, well.
• 3:03
  Speaker 2: Yeah, twenty twenty six is very much almossed upon us.
• 3:05
  Speaker 2: So look, we're just sort of looking ahead to the
• 3:07
  Speaker 2: year ahead and I think what we're what we're seeing
• 3:10
  Speaker 2: already and what we expect to see ongoing in twenty
• 3:12
  Speaker 2: twenty six is probably a bit of a rotation. And
• 3:14
  Speaker 2: by that I mean, you know, we've seen artificial intelligence
• 3:17
  Speaker 2: technology stocks have really been powering markets higher for the
• 3:20
  Speaker 2: last three years. What we see ahead is that we're
• 3:22
  Speaker 2: going to see a bit more I guess healthy skepticism
• 3:25
  Speaker 2: come into that sector, a bit less hype perhaps, and
• 3:27
  Speaker 2: you've already seen that really in the last couple of
• 3:29
  Speaker 2: months as well, and a bit more of a rotation.
• 3:31
  Speaker 2: So we're feeling a bit more positive, particularly around the
• 3:33
  Speaker 2: New Zealand market as we go forward, and that's on
• 3:37
  Speaker 2: the back of you know, improving cyclical backdrop, improving micro fundamentals,
• 3:41
  Speaker 2: cost cutting, you know, a bit of work being done
• 3:43
  Speaker 2: on balance sheets over the past few years, and starting
• 3:46
  Speaker 2: to see some of that more positive forwarder guidance coming
• 3:48
  Speaker 2: through from New Zealand domestic companies as well. So overall,
• 3:52
  Speaker 2: I think a rotation in terms of you know, high
• 3:55
  Speaker 2: high growth, exciting tech sector into probably some other areas
• 4:00
  Speaker 2: like property and infrastructure, as well as New Zealand listed
• 4:02
  Speaker 2: equities having a better year ahead after a pretty tough
• 4:05
  Speaker 2: couple of years.
• 4:06
  Speaker 1: So I really appreciate your time as always, that's investment
• 4:09
  Speaker 1: strategist Zowie Wallace, thanks to our partners Forsythe but