Latest / The SME Stream / Shane Solly: Harbour Asset Management spokesperson on financial markets factoring in Trump winning the presidency

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Shane Solly: Harbour Asset Management spokesperson on financial markets factoring in Trump winning the presidency · The SME Stream

• 0:00
  Speaker 1: Shane Sally Harbor Asset Management with US. Now. Hey, Shane,
• 0:03
  Speaker 1: Hey here that Oh what's a big Oh, I'm Shane,
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  Speaker 1: I'm here for this. Are the markets still picking Donald
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  Speaker 1: Trump to win?
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  Speaker 2: They are? They are, And certainly we're seeing you know,
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  Speaker 2: we've seen the market position for a Republican when. What
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  Speaker 2: that means is that Trump winners have been rather to
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  Speaker 2: be outperforming. This is things like the US dollar, gold, crypto,
• 0:21
  Speaker 2: all the US bank stocks have been pretty hot, they've
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  Speaker 2: run hard. Trump loses, things like the renewable sector an
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  Speaker 2: you think with a teriff risk US game, and bonds
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  Speaker 2: they've been sold off. So soonly we've seen a real
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  Speaker 2: swing towards Trump winning. We know this is going to
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  Speaker 2: take time to decide, you know, certainly last time round,
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  Speaker 2: back in twenty twenty, it took four days. Market didn't
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  Speaker 2: like it's pretty horder. Once we're through that, we saw
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  Speaker 2: markets recover that this time around, certainly, I think you
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  Speaker 2: One interesting point is bond he is these ten yure
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  Speaker 2: government bond yo is. They're used as a sort of
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  Speaker 2: a start point for investing. They've increased three quarters of
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  Speaker 2: percent from their low back in September, so there has
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  Speaker 2: been some really big swing. Hether.
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  Speaker 1: Now, given that it is really close, and many say
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  Speaker 1: too close to call, how do you reckon the markets
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  Speaker 1: are going to react to different electoral outcomes?
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  Speaker 2: Now, great question. Look sort of three scenarios of divided government,
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  Speaker 2: which means nobody has really got control. That would actually
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  Speaker 2: see a pretty neutral impact for bond markets and equity markets.
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  Speaker 2: Bond markets, so there's been interest rates and divided government
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  Speaker 2: makes it harder for some of the legislation sera, some
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  Speaker 2: of the more extreme parts of the legislation that either
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  Speaker 2: parties talk about to get pushed through just harder to
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  Speaker 2: put through. So divided government kind of okay, republican clean
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  Speaker 2: sweep that may see these long term magistrates. There's bond
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  Speaker 2: viewers actually go higher again, just driven by stronger growth,
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  Speaker 2: higher inflation, and possibly the US would reserve not being
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  Speaker 2: so aggressive with its easing cycle. You might actually see
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  Speaker 2: the sheer markets, see a little bit of a rally
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  Speaker 2: in the US. This tax burden for corporate sping lower.
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  Speaker 2: If we saw a Harris win, we may actually see
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  Speaker 2: long term bond years four and also see the US
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  Speaker 2: market for because that would mean higher corporate tax rates.
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  Speaker 2: May also see a bit of a relief rarely in
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  Speaker 2: terms of tariffs, and certainly we're positioned at harbor for
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  Speaker 2: a range of different scenarios. It's really hard to call
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  Speaker 2: out there.
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  Speaker 1: If Trump wins and we have an increase in US tariffs,
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  Speaker 1: what does that mean for US?
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  Speaker 2: Look, I think you know, certainly these evolving international factors
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  Speaker 2: that that increases the risk for New Zealand's economic growth.
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  Speaker 2: You know, if we look at on balance the direct
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  Speaker 2: impacts of tariffs on New Zealand's exports of the US,
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  Speaker 2: it is limited the very heavy skew towards tourism with
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  Speaker 2: the US trade versus the fact that a lot of
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  Speaker 2: our agricultural exports can be moved to a lot of
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  Speaker 2: different locations. They're fungible, easy to move to different locations.
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  Speaker 2: So China is probably the interesting thing here. That's still
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  Speaker 2: our largest export market. If there is a spillover from
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  Speaker 2: potential increases in tariffs on China, that will be an impact.
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  Speaker 2: But of course we're on the cusp of another set
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  Speaker 2: of China is policy stimulus, so there could be a
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  Speaker 2: bit of an opposite. So the short answer is we
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  Speaker 2: could actually be it will be a risk, but it
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  Speaker 2: may not be as big as some people THENK.
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  Speaker 1: Yeah, okay. Now on the subject to the stimulus, it's
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  Speaker 1: a big week for central bank policy decisions around around
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  Speaker 1: the world this week. What are we expecting What does
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  Speaker 1: it mean for us?
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  Speaker 2: Yeah? Look, we've got central banks responsible more than a
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  Speaker 2: third of the global economy set to hopefully reduce borrowing
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  Speaker 2: costs in the next few that is the uspitual Reserve
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  Speaker 2: due to come out, and they are expected to cut
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  Speaker 2: interest rates again instantly. We're seeing this after a long
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  Speaker 2: period of interest rates being increased globally, putting pressure on
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  Speaker 2: global economies, and parts of our economy starting to go
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  Speaker 2: the other way. So certainly this potential for low interest
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  Speaker 2: rates is going to be helpful for our economy and
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  Speaker 2: that's going to be helpful for our sheer market. Good stuff.
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  Speaker 1: Shane's always good to talk to you, mate, Thank you
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  Speaker 1: so much. It's Shane Sally. I will talk to you
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  Speaker 1: next week. Harbor Asset Management