Latest / Best of Business / Greg Smith: Generate investment specialist on the economic impact of the Middle East conflict

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Greg Smith: Generate investment specialist on the economic impact of the Middle East conflict · 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: All right, we'll go now to the markets. The NZX
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  Speaker 2: has closed down nearly four percent on the day. What's
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  Speaker 2: happened over in Australia on the ASX has been described
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  Speaker 2: as a blood bath. Greg Smith is an investment specialist
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  Speaker 2: that Generate Wealth and Kiwi Save and is with us
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  Speaker 2: high Greg hi head, what brought this on? Is it
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  Speaker 2: the oil price?
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  Speaker 3: Yeah, it's all about the or prices. As you're just
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  Speaker 3: talking with Shane about up twenty five percent today. The
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  Speaker 3: or price was that that means it's risen seventy percent
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  Speaker 3: since the conflict began a week ago. And really just
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  Speaker 3: suppose those fears over our old faux inflation being stoked.
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  Speaker 3: So yeah, the New zeal market was down three point
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  Speaker 3: two percent. We're actually held up pretty well over the
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  Speaker 3: past week or so, but that all changed today. Really
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  Speaker 3: was nowhere to hide. So he had travel stocks and
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  Speaker 3: transport stocks they will are, but yeah, everything was sort
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  Speaker 3: of taking a bit of a bath, including fish and
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  Speaker 3: Pikal Healthcare and that's our biggest company down four point
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  Speaker 3: six percent. But Yeah, certainly all really resting with what
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  Speaker 3: happened to the all price today.
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  Speaker 2: Yeah, how worried to you about inflation as a result
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  Speaker 2: of what you're seeing?
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  Speaker 3: Well, looking at all pos stays where it is or
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  Speaker 3: even goes hi, that is going to be problematic for inflation.
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  Speaker 3: I suppose you know that the big unknown is what
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  Speaker 3: happens with the straight HU moves. I suppose it would
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  Speaker 3: point out that you know, a lot of people have
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  Speaker 3: been talking about this being like the seventies the oil crisis.
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  Speaker 3: It's certainly not that we're seeing a geopolitical risk premium
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  Speaker 3: being priced into will There's obviously various options for oil
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  Speaker 3: coming from elsewhere, so that the straight counts around about
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  Speaker 3: twenty percent worlds oil in terms of transport. Obviously Trump
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  Speaker 3: wants to get that going again. Iran they need oil revenues,
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  Speaker 3: so they'll be having interest there. And also, yeah, we
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  Speaker 3: can get all from other places. And also the US,
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  Speaker 3: un like that in the seventies, is now a net
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  Speaker 3: export of bill and it has shells. So yeah, I
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  Speaker 3: mean it's concerning, and obviously we want to see the
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  Speaker 3: oil price head back down, but yeah, current levels, it
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  Speaker 3: certainly would do a bit to stoke inflation. But I
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  Speaker 3: think look, it's also important here that we know those
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  Speaker 3: maybe that are looking at their key we saber just
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  Speaker 3: to realize what the market is doing in terms of
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  Speaker 3: the market. Stock market reaction is not accounting for what
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  Speaker 3: is happening, but what might happen. And I think we
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  Speaker 3: could easily see things turn you if even there was
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  Speaker 3: some sort of diplomacy. I think the other big thing
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  Speaker 3: today was obviously Iran has a new leader. Obviously Trump
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  Speaker 3: isn't backing down, so that sort of just perhaps pushed
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  Speaker 3: out the timeline a bit for it's being resolved. Obviously
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  Speaker 3: the US are still sticking to the narrative of weeks
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  Speaker 3: rather than months.
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  Speaker 2: Do you think we're being completely rational here or is
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  Speaker 2: this a little bit of the jittery stuff, you know,
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  Speaker 2: like wild reactions to anything at the moment because we're
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  Speaker 2: a bit panicky.
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  Speaker 3: Oh for sure. And yeah, we're remembering that stock markets
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  Speaker 3: and investors have dealt with lots of crises before, yeah,
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  Speaker 3: including wars. So if you look at the Ukraine War,
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  Speaker 3: we had a similar move in the old price. We
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  Speaker 3: had a similar move down the sheer market. It lasted
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  Speaker 3: a little bit longer, but you look at markets, they
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  Speaker 3: do recover, they get past these crises. If you look
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  Speaker 3: at the U. S and P five hundred, the biggest
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  Speaker 3: index in America, that's up around that eight eight percent
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  Speaker 3: since the Low's posts Russia's invasion of Ukraine, so really
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  Speaker 3: important to get some perspective here.
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  Speaker 2: You're too right, hey, Greg, Thank you very much. Appreciate
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  Speaker 2: a Greg Smith investment specialist. To generate wealth and key,
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  Speaker 2: we save.
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