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Shane Solly: Harbour Asset Management expert on oil prices surging as Iran war continues · 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 2: Shane Solly Harbor Asset Managements with Us. Hello Shane. All right,
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  Speaker 2: So the bring to oil price increased another two percent today,
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  Speaker 2: sitting at one one five USD a barrel. How have
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  Speaker 2: the investment markets reacted to the latest move and what
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  Speaker 2: economic sectism factors are markets pricing in?
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  Speaker 3: Do you think? Yeah, Look, I'll start with the second
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  Speaker 3: piece first, soonly we're starting to see, excuse me, markets
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  Speaker 3: think about a stagflation light type environment, so higher inflation,
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  Speaker 3: lower growth. And when we think about that, investors are
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  Speaker 3: pricing in the first round effect of inflation from oil prices,
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  Speaker 3: and now they're starting to think about sorry, higher inflation
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  Speaker 3: going through the interest rates, and now they start to
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  Speaker 3: think about what it means for earnings and things like
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  Speaker 3: credit ratings. So we've seen bond yields. There's this government
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  Speaker 3: ten yure bond years in particular increase with inflation risk.
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  Speaker 3: So US tenure bond yards roads to four forty three
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  Speaker 3: last week. We've seen the tenure bar years today up
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  Speaker 3: to four point eight percent, getting up there to recent
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  Speaker 3: highst here markets continued forward lower growth risk. US sure
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  Speaker 3: market down two percent last week to be down seven
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  Speaker 3: point four percent month to day when we were down
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  Speaker 3: one point four percent today Helen driven by weakness and
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  Speaker 3: Fish and Buckle Health Get and Brittilly Boss the big
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  Speaker 3: losers on the day with Fletcher Building, Westpac. Rymans have
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  Speaker 3: more cyclical names, the more sensitive to slower activity. So yeah,
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  Speaker 3: we're we're down seven point one percent month to day
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  Speaker 3: here in New Zealand.
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  Speaker 2: So seeing a risk off, Yeah, now, I see markets
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  Speaker 2: are talking about a bear flattener. What does a bear flatner?
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  Speaker 3: Yeah? So being flaten is unusual. It means that the
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  Speaker 3: yelk curve shape is for has changed. It's where the
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  Speaker 3: shorter termb interest rates, the nearer to maturity interest rates
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  Speaker 3: have increased faster than the longer term rates. So we've
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  Speaker 3: seen rates across the Yelk curve increase across all maturities,
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  Speaker 3: but they've increased more the short end, the nearer to maturity.
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  Speaker 3: Does it matters because the beer should often signals that
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  Speaker 3: the markets are expecting high to managey policy central banks
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  Speaker 3: increasing rates to combat inflation, but it frequently proceeds growth
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  Speaker 3: slowing down and potential recessions. So yeah, it's certainly a
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  Speaker 3: bit of a harbinger of things to turn down.
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  Speaker 2: Okay, now listen, tell me what you think of that
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  Speaker 2: deal between Zero and Anthropic on Fridays. It's going to
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  Speaker 2: boost the share price for Zero.
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  Speaker 3: Well, look on the face that we think it's a
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  Speaker 3: positive step. It sort of suggests that AI doesn't necessarily
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  Speaker 3: replace or dis intermediate software and they can actually work
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  Speaker 3: together because this has been the big shock. We've had
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  Speaker 3: the macro of Iran and now we've got the micro
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  Speaker 3: of which happen software over the last few months. So
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  Speaker 3: this is a good deal for Zero Andthropics CLAWD. We'll
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  Speaker 3: probably do a lot of the heavy lifting for Zero's
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  Speaker 3: AI agent jacks. But what we don't know either is
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  Speaker 3: what Zero is going to pay for the service. We
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  Speaker 3: don't know where the economic monetization is going to sit,
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  Speaker 3: so the market's been a little bit wiry about it.
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  Speaker 3: We think it's an important deal with it actually helps
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  Speaker 3: change market sentiment or perspectives about long run too or
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  Speaker 3: they you risk for Zero. But unfortunately on the day
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  Speaker 3: at the Zero share price is actually down three point
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  Speaker 3: two percent to seventy fifty really reflecting weakness and US
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  Speaker 3: software stock. So a good deal, but you need to
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  Speaker 3: really roll through.
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  Speaker 2: Yeah, Shane, thank you very much. Really appreciate your time.
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  Speaker 1: Mate.
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  Speaker 2: That's Shane Soally Harborst Management.
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