Latest / The SME Stream / Sam Dickie: Fisher Funds expert on the reaction from global markets after Donald Trump won

Transcript

Sam Dickie: Fisher Funds expert on the reaction from global markets after Donald Trump won · The SME Stream

• 0:00
  Speaker 1: Together du for c L.
• 0:02
  Speaker 2: So the Trump victory has resulted in some very sharp
• 0:04
  Speaker 2: price moves and the asset prices around the world. As
• 0:06
  Speaker 2: we've been discussing, equities have rallied sharply, bonds have sold off.
• 0:10
  Speaker 2: Question is what's the early read from the markets? What
• 0:12
  Speaker 2: does it all mean for investor? Sam Dicky from Fisher
• 0:14
  Speaker 2: Funds is with us. Hey, Sam, hey, okay, what did
• 0:18
  Speaker 2: very well?
• 0:18
  Speaker 1: Thank you?
• 0:18
  Speaker 2: What did the equity markets think of the victory?
• 0:20
  Speaker 1: Then global? It could be your big moves across the
• 0:23
  Speaker 1: board in finacia classes, but equities a strong reaction, so
• 0:27
  Speaker 1: about three percent up globally, but it was very US centric.
• 0:31
  Speaker 1: So as a general backdrop, the markets bullish corporate tax cuts,
• 0:34
  Speaker 1: as bullish less regulation, as bush less red tape, and
• 0:38
  Speaker 1: it's sort of pro growth domestic infrastructure spending. But moving
• 0:42
  Speaker 1: to bonds and they sold off, which is the same
• 0:45
  Speaker 1: thing as saying interest rates when happened. This is one
• 0:47
  Speaker 1: thing to keep an eye on. So if you look
• 0:50
  Speaker 1: at US bond yields now they're back at levels we
• 0:53
  Speaker 1: saw way back in July, which was before we saw
• 0:55
  Speaker 1: that bid repricing and feed rate cuts. So people are
• 1:00
  Speaker 1: bidding there that Trump will drive inflation and growth higher,
• 1:03
  Speaker 1: which means higher interest rates.
• 1:07
  Speaker 2: Can you read into it how much they're expecting the
• 1:09
  Speaker 2: interest rates and the inflation to increase.
• 1:15
  Speaker 1: You can't. You can't necessarily map a moving interest rates
• 1:18
  Speaker 1: to a moving inflation. But if you look at what
• 1:22
  Speaker 1: the market's pricing in terms of rate cuts by the
• 1:25
  Speaker 1: feed twelve months ahead. Back in July, the market was
• 1:29
  Speaker 1: pricing five rate cuts and then it went as far
• 1:31
  Speaker 1: as pricing sort of seven or eight rate cuts at
• 1:33
  Speaker 1: one point in time. Now they're only pricing free rate
• 1:36
  Speaker 1: cuts and the twelve months ahead. So people are expecting
• 1:40
  Speaker 1: that the Trump's going to be reflationary and drive growth,
• 1:43
  Speaker 1: which means the Fed needs to cut rates less quickly.
• 1:46
  Speaker 2: YEA interesting, okay, And obviously we've seen the currencies move.
• 1:50
  Speaker 2: Their USD has gone up, Crypto's gone up. How far
• 1:54
  Speaker 2: do you see crypto going off the back.
• 1:56
  Speaker 1: Of this, Well, I mean, but there's a couple of
• 2:00
  Speaker 1: things coming on there right as. One of these obviously
• 2:02
  Speaker 1: very probate call and I think you said, make americ
• 2:04
  Speaker 1: at the crypto capital of the planet, So that's all go.
• 2:07
  Speaker 1: And the other thing is which I don't agree with
• 2:10
  Speaker 1: this one is that some people see cryptos as good
• 2:13
  Speaker 1: inflation head often fation goes up, crypto is a good
• 2:16
  Speaker 1: place to be. Now, that's was not true during the
• 2:19
  Speaker 1: twenty twenty two inflation spokes a bitcorn actually fell by
• 2:23
  Speaker 1: seventy five percent as the far far ago. See either
• 2:27
  Speaker 1: the other people out outside of me, you will be
• 2:29
  Speaker 1: able to give the answer to that, or will be
• 2:31
  Speaker 1: able the answer to that.
• 2:32
  Speaker 2: It's a fascinating one to look at. What have you
• 2:35
  Speaker 2: seen in equities across countries and the cross sectors that
• 2:37
  Speaker 2: you're fascinated by.
• 2:40
  Speaker 1: Yeah, definitely the US is the winner, which shouldn't come
• 2:42
  Speaker 1: as any surprise. But you know, look at New Zealand, Australia,
• 2:44
  Speaker 1: European and emerging market equipments. They're basically flat. And everyone's
• 2:48
  Speaker 1: watching China obviously given the rhetoric, and that was weakest
• 2:52
  Speaker 1: running into the election, but it's held up okay since
• 2:55
  Speaker 1: So that's that's mildly interesting. But under the hood in
• 2:57
  Speaker 1: the US is where all the actions being some huge
• 3:00
  Speaker 1: moves there, So perceived winners are domestic facing the sectors.
• 3:05
  Speaker 1: So to give you a few names, you are steel
• 3:06
  Speaker 1: companies up thirteen percent. Is everyone is expecting the first
• 3:10
  Speaker 1: tariff he will throw in China will be steered back
• 3:13
  Speaker 1: back in twenty sixteen twenty seventeen, US auto manufacturers are
• 3:18
  Speaker 1: like forward up five six percent because of this competition
• 3:21
  Speaker 1: from important waders. And of course Tesla is up fourteen
• 3:24
  Speaker 1: percent because Trump is mates with Elon. And US trucking
• 3:28
  Speaker 1: and rail companies up ten percent, partly driven by this
• 3:31
  Speaker 1: environmental and emission regulation. And this was quite surprising as
• 3:35
  Speaker 1: giant banks JP Morgan up ten percent overnight because he's
• 3:40
  Speaker 1: talking less regulation and many roles as perceived losers sold
• 3:45
  Speaker 1: the companies down twelve He said that they are part
• 3:48
  Speaker 1: of the new ing scan and his proposed tariffs that
• 3:52
  Speaker 1: will impact that sector go figure and just ranom on
• 3:56
  Speaker 1: cannabis stocks down twenty percent. He's not in favor of
• 3:58
  Speaker 1: legalized cannabis, but coincidentally, there was a couple of proposals
• 4:03
  Speaker 1: today yesterday. I think legalized marijuana and Floria are other
• 4:07
  Speaker 1: fates that failed. So outside of that, the only other
• 4:10
  Speaker 1: big moves were interest rates sensitive companies were property and utilities.
• 4:14
  Speaker 1: They went down because they want to benefit from this
• 4:17
  Speaker 1: big growth bonanza that's supposedly going to come, but they
• 4:20
  Speaker 1: will get hurt by high interest rates, so a.
• 4:22
  Speaker 2: Lot of investors to be thinking about with all the
• 4:24
  Speaker 2: stuff going.
• 4:24
  Speaker 1: On in huge move, and I didn't think it caught
• 4:28
  Speaker 1: the market by surprise. I mean, most betting markets were
• 4:31
  Speaker 1: expecting him to win, so it shouldn't have covered such
• 4:35
  Speaker 1: a shock. But I suspect the market was remembering twenty
• 4:37
  Speaker 1: sixteen too well. So remember the market was convinced he
• 4:40
  Speaker 1: winn't win, and in the unlikely event he did. Markets
• 4:43
  Speaker 1: with nose dive and they got burnt on both counts
• 4:46
  Speaker 1: and maybe once twice shy.
• 4:48
  Speaker 2: Sam, Thanks very much, appreciated interesting times ahead for you.
• 4:51
  Speaker 2: Sam Dickey, Fisher Funds