Latest / Best of Business / Sam Dickie: Fisher Funds expert on the state of equity markets around the world

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Sam Dickie: Fisher Funds expert on the state of equity markets around the world · 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,
• 0:17
  Speaker 1: Heather dupless Ala.
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  Speaker 2: Most equity markets around the world continue to break all
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  Speaker 2: new high, all time highs. You don't need me to
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  Speaker 2: tell you, obviously that there are risks attached to that.
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  Speaker 2: To talk us through those risks, Sam Dickey, Official Funds
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  Speaker 2: is with us.
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  Speaker 3: Hey Sam, from Heather, Let's.
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  Speaker 2: Start with why these what the markets are? First? What
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  Speaker 2: markets are the ones that are hitting the all time highs?
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  Speaker 3: Yes, well overall global equities that are making new lifetime
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  Speaker 3: highs almost every day, and we'rerapping other twelve cent this year,
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  Speaker 3: and that's again being driven by the US, but Japan,
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  Speaker 3: Europe and I was a year all sitting kind of
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  Speaker 3: right near those all time highs.
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  Speaker 2: And why is this happening?
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  Speaker 3: It does remind us how far we've come. So who
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  Speaker 3: are back to the lows of October twenty twenty two,
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  Speaker 3: and back then we know global inflation was right near
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  Speaker 3: its forty year peak of ten percent in markets, we're
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  Speaker 3: expecting an eminent recession globally and then Flashi's fall and
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  Speaker 3: sharply as we know and globe economic growth has been
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  Speaker 3: much more of both for robust and expected, and that's
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  Speaker 3: driven a fifty one percent rally from that low point
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  Speaker 3: in October twenty twenty two.
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  Speaker 2: Now, obviously, Sam, if you're whenever you hear that markets
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  Speaker 2: are heading all time highs and breaking records and stuff
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  Speaker 2: like that, you should know that there is risk, right
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  Speaker 2: So what are the key risks that investors are focused
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  Speaker 2: on right now?
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  Speaker 3: That's right. There's always risk in investing, and there's always
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  Speaker 3: many things to worry about. But there are three things
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  Speaker 3: in particular that investors are grappling with right now, and
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  Speaker 3: the first one is decelerating global and especially as economic
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  Speaker 3: growth and I talked about this present. Second one is
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  Speaker 3: the return of animal spirits or height in some pockets
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  Speaker 3: of the market, and the third one is and as
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  Speaker 3: a result of both of those two things I just mentioned,
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  Speaker 3: the global stock market values once again been driven by
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  Speaker 3: a much narrower subset of companies. So just to go
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  Speaker 3: through each one of those really briefly, key e commic
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  Speaker 3: growth drivers have shifted from surprising positively for eighteen months
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  Speaker 3: almost uninterrupted, to now surprising negatively. And as a result
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  Speaker 3: of that, twenty twenty four US GDP growth you and
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  Speaker 3: I've been talking about for months. People has been getting
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  Speaker 3: upgraded is now getting trimmed by economists for the first
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  Speaker 3: time in a while, and that's driven a sharp underperformance
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  Speaker 3: of economic sensitive stocks like transport and housing related companies
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  Speaker 3: in the US. On the second thing, we are seeing
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  Speaker 3: the return of animal spirits, so mean stocks are on
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  Speaker 3: the move. We've talked about that one game stop at
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  Speaker 3: AMC up hundreds of percent, and there's lots of hot
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  Speaker 3: money in AI stocks. And the third thing is because
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  Speaker 3: of those two factors of the stock market rally you
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  Speaker 3: and I talked about being much healthier and much broader
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  Speaker 3: than Q one after that March quarter is now quite narrow.
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  Speaker 3: And to give you an example of that, while the
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  Speaker 3: broad use of stock market is up sixteen percent this year,
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  Speaker 3: almost half of those stocks in that index are actually
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  Speaker 3: negative on the year, and we know that it's been
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  Speaker 3: driven by a few large tech companies. And that tells
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  Speaker 3: us that the average stock is not as healthy as
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  Speaker 3: the headline stock market indexts whatever you believe.
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  Speaker 2: So what does all of this mean for investors?
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  Speaker 3: There are always risks, Like you said it, and we've
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  Speaker 3: had a fifty centh rally in twenty odd so investiness
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  Speaker 3: should not be surprised that would that comes for evaluations
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  Speaker 3: and more exuberance. But the good news is central banks
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  Speaker 3: are in a very different position now than they have
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  Speaker 3: been at most times in our teen or fifteen years.
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  Speaker 3: So they have significant firepower pushing any economic growth, ther
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  Speaker 3: pocket or other risk. And that is quite different to
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  Speaker 3: that twenty and nine to twenty and sixteen period in
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  Speaker 3: twenty twenty twenty twenty one when central banks had already
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  Speaker 3: set benchmark rates to zero and had less mo to
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  Speaker 3: cut rates and Cushing a blow. So that's the first
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  Speaker 3: bit of good news. The other bit of good news
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  Speaker 3: to opposite these risks is means that outside of that
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  Speaker 3: narrow subset of companies we've talked about the driving these markets,
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  Speaker 3: there are more attractive valuations on offer.
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  Speaker 2: Well that's something I suppose Sam. Thank you very much
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  Speaker 2: as always, really appreciate you expertise at Sam Dickey for
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  Speaker 2: your funds.
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