Latest / Best of Business / Sam Dickie: Fisher Funds expert on what investors can expect for the second half of 2025

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Sam Dickie: Fisher Funds expert on what investors can expect for the second half of 2025 · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks'd be follow
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  Speaker 1: this and our wide range of podcasts now on iHeartRadio.
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  Speaker 2: Andrew dickens more than halfway through the year, it's been
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  Speaker 2: a pretty extraordinary year for the market so far. Huge
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  Speaker 2: market uncertainty, the rise and rise of AI and all
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  Speaker 2: sorts of stuff, the ongoing recession. So anyway, let's talk
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  Speaker 2: about what investors should have learned and what we might
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  Speaker 2: see in the second half. And I'm joined now by
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  Speaker 2: Sam Dickey from Fisher Fund.
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  Speaker 3: Hello Sam, Andrew, Good evening.
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  Speaker 2: So how normal abnormal? Has this year.
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  Speaker 3: Been quite abnormal? I would say so, the biggest pickup
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  Speaker 3: in volatility and the sharpest correction in equity since the
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  Speaker 3: depths of COVID, And for that brief period after Donald's
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  Speaker 3: Liberation Day, sentiment and equity markets was at its lowest
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  Speaker 3: EBB for quarter of a century. And when you think
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  Speaker 3: about the three big drivers of the game, so growth, inflation,
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  Speaker 3: and interest rates, it's been a fair bit of abnormality
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  Speaker 3: there too. So inflation has continued to behave well and
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  Speaker 3: it's slowed from four and a half percent globally to
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  Speaker 3: three and a half, but interest rates have not played ball.
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  Speaker 3: So it's very very rare for US medium and long
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  Speaker 3: term interest rates to be higher now than they were
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  Speaker 3: at the start of the central bank rate cutting cycle.
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  Speaker 3: And that's partly due to fears that whatever tariffs are
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  Speaker 3: eventually implementabile drive up inflation. It's partly because of Trump
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  Speaker 3: meddling with the independence of the Federal Reserve independence and
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  Speaker 3: trying to force them to cut rates early, and partly
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  Speaker 3: because people trust the US a little less. And the
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  Speaker 3: other thing is, despite this once in a generation trade war,
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  Speaker 3: the US bombing three nuclear sites in Iran resulting in
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  Speaker 3: a twenty percent spike in oil prices, and all those
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  Speaker 3: other abnormal events, equity markets have smasher all Tom Highs again.
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  Speaker 2: Meanwhile, of course, the chair of the United States Federal Reserve,
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  Speaker 2: Roome Palell, has made a decision today to hold US
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  Speaker 2: interest rates. So he's still concerned about inflation, isn't he
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  Speaker 2: and the effect of the town.
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  Speaker 3: Yeah, that's right, and he's not buckling to the political
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  Speaker 3: pressure that Trump is putting on him. I think Trump's
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  Speaker 3: called him a loser and he's going to make another mistake.
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  Speaker 3: I think he might have even called him stupid at
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  Speaker 3: some stage, which is quite ironic actually, so yeah, he
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  Speaker 3: hasn't buckled depressure. And that's critical because the independence of
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  Speaker 3: a central bank from politics is absolutely critical to the
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  Speaker 3: credibility of a nation. And the very fact that Trump
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  Speaker 3: is meddling and there is a probability that Jerome Power
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  Speaker 3: would buckle to that pressure is one of the reasons
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  Speaker 3: why we see interest rates in the US sort of
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  Speaker 3: abnormally high at this point in the cutting cycle. And
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  Speaker 3: it's one of the reasons why I've seen such a
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  Speaker 3: weak US dollar.
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  Speaker 2: And meanwhile, the Nazi prices and equity prices, I know,
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  Speaker 2: I know some people have made a fortune. Enough rocket
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  Speaker 2: there because business continues. They got some contracts, so some
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  Speaker 2: of our equities are soaring, others are sinking. It's all
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  Speaker 2: over the.
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  Speaker 1: Shop, that's right.
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  Speaker 3: And you mentioned AI at the start, and that Big
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  Speaker 3: Trade got a bit over its skis at Bubbly late
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  Speaker 3: last year turned from boom to bus for a while.
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  Speaker 3: You might remember we talked about it in this program.
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  Speaker 3: The straw that broke the camel's back back in January
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  Speaker 3: February was that that Chinese company Deep Seek could allegedly
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  Speaker 3: build an AI model a fraction of the cost of
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  Speaker 3: the US big tech guys, and then the AI trade
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  Speaker 3: got a real kicking during the trade spat with China.
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  Speaker 3: Now that dust is cleared, the deep seat claims were
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  Speaker 3: a little misleading, and corporates around the world have really
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  Speaker 3: started clamoring for things like AI agents, which is a
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  Speaker 3: use case for all this investment in AI to answer
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  Speaker 3: calls or automated simple processes. And the AI bubble is
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  Speaker 3: fully formed again. And actually Microsoft, speaking of equities, are
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  Speaker 3: doing well. Andrew reported earnings a few hours ago and
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  Speaker 3: absolutely knocked it out of the park. So their data
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  Speaker 3: center business is You're now a huge business, sort of
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  Speaker 3: one hundred billion dollar business and growth is actually accelerating,
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  Speaker 3: so it's now growing forty percent as companies around the
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  Speaker 3: world rush to implement AI and inference their AI models
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  Speaker 3: on is your okay?
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  Speaker 2: So what an interesting first half? So what can we
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  Speaker 2: expect in the second half or is it expect the unexpected?
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  Speaker 3: Well, that's exactly what I would say, so that we
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  Speaker 3: need to get used to this abnormality we seem to
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  Speaker 3: have once in multi decade events every couple of years.
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  Speaker 3: And I do think part of that is the global
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  Speaker 3: economy is still finding its feet after the savage shock
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  Speaker 3: of COVID believe it or not. Part of that is
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  Speaker 3: the pace of technological change, especially with AI set to
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  Speaker 3: disrupt businesses around the world. Part of that is probably
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  Speaker 3: the political environment. But the lesson we did learn the
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  Speaker 3: first half andre before we got into the second half,
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  Speaker 3: is don't sweat the macro too much. More often than not,
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  Speaker 3: I'd say you've probably got a better seventy five percent
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  Speaker 3: hit rate on This is when extraordinary macro events happen,
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  Speaker 3: the market overreacts and it's a great buying opportunity for
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  Speaker 3: long term investors. As for the second half, it shouldn't
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  Speaker 3: be ignored that sentiment has turned from that super bearish
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  Speaker 3: sentiment we talked about back in April to now showing
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  Speaker 3: signs of irrational exuberance. And when you consider in the
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  Speaker 3: second half, we have to navigate, among other things, final
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  Speaker 3: clarity on Trump's tariff outcomes for the globe on August first,
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  Speaker 3: see he doesn't give another grace period, and economists think
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  Speaker 3: that could still drag US or global growth by anywhere
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  Speaker 3: from one to three percent. You shouldn't lose sight of
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  Speaker 3: the fact that the water is certainly sloshed to the
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  Speaker 3: bullish end of the Bath Pub.
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  Speaker 2: WHOA, what a lovely turn of phrase, and on that
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  Speaker 2: wonderful piece of English. We're going to leave you, Sam
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  Speaker 2: Dicky from Fisher Funds and thank you for your time.
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