Latest / Best of Business / Sam Dickie: Fisher Funds expert on the US Federal Reserve adopting a hawkish outlook for 2025

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Sam Dickie: Fisher Funds expert on the US Federal Reserve adopting a hawkish outlook for 2025 · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks. The'd be
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  Speaker 1: follow this and our wide range of podcasts now on iHeartRadio.
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  Speaker 2: Quite a tumultuous here in the markets, fair number of
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  Speaker 2: hits and missus Sam Dickey from Fisher Funds as well.
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  Speaker 2: Then run through it, Sam, Good evening to you.
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  Speaker 3: Good evening, Ryan.
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  Speaker 2: We'll get to that in just a second, because the
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  Speaker 2: Fed has decided to cut and the markets have reacted
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  Speaker 2: quite strongly. They don't like it, but not because of
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  Speaker 2: the cut, but because of the slower cutting cycle that's
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  Speaker 2: been forecasted.
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  Speaker 3: Right, that's right.
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  Speaker 4: It was a hawkish cut, if that makes sense to you,
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  Speaker 4: So you know, fewer rate cuts projected, and in fact,
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  Speaker 4: the FED raised their forecast for twenty twenty five core inflation,
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  Speaker 4: which is obviously their primary mandate. So the market took
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  Speaker 4: it as quite hawkish and took a lot of rate
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  Speaker 4: cuts out of the curve, and interest rates went up
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  Speaker 4: and equity markets went down.
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  Speaker 3: Yeah.
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  Speaker 2: Yeah, interesting that one, because I mean, they're obviously a
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  Speaker 2: bit a bit looser with their monetary policy when it
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  Speaker 2: comes to inflation than we are. I mean, can you
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  Speaker 2: imagine our Reserve bank making that call if inflation was
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  Speaker 2: so stubborn here. Anyway, we'll go through. We'll go through
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  Speaker 2: the rest of your top six. So we've done number one.
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  Speaker 2: Number two, the Trump.
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  Speaker 3: Bump, Yes, and US exceptionalism.
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  Speaker 4: So we are obviously Trump won and promised three things,
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  Speaker 4: really tax cuts. He promised to get rid of wasteful
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  Speaker 4: red tape, and to cut a lot of fat out
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  Speaker 4: of the federal government. So pretty powerful words. The market
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  Speaker 4: reacted strongly. And let's not forget Ryan that before these
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  Speaker 4: fighting words, the strength of the US economy had been
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  Speaker 4: the number one positive surprise for stock markets for the
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  Speaker 4: past eighteen months. So if we take a step back,
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  Speaker 4: the US was supposed to be in recession by now,
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  Speaker 4: according to economists, eighteen months ago. And then you compare
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  Speaker 4: that to the other big blocks, so China, which continues
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  Speaker 4: to struggle under huge debt burdens, and a structurally challenged Europe.
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  Speaker 4: So all of that's known as US exceptionalism. And then
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  Speaker 4: we get the Try bump, and so astonishingly before today,
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  Speaker 4: just to define what the Trump bump is, since Trump
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  Speaker 4: was elected a few weeks ago, the US stop market
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  Speaker 4: was up about seven or eight percent, China was down five,
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  Speaker 4: and Europe was flat so that is very rare outperformance
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  Speaker 4: in such a short space of time.
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  Speaker 2: It certainly is. And the Trump bump on the cryptocurrency
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  Speaker 2: has been pretty massive too, hasn't it.
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  Speaker 3: Right?
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  Speaker 2: Number three, This is, by the way, I for you
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  Speaker 2: just joining us Sam Dickey from Fisher Funds with basically
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  Speaker 2: the top six in terms of market movements for the year.
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  Speaker 2: Number three.
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  Speaker 3: Yeah, well, number three.
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  Speaker 4: I mean it's not necessarily market movements, but sort of
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  Speaker 4: big hits and misses that caught our eye, in the
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  Speaker 4: market's eye. So the umbrella reward I guess for down,
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  Speaker 4: up and a flash was the japan flash crash. So
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  Speaker 4: it seemed like a very big deal at the time
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  Speaker 4: we spoke about it in August. And Japan has been
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  Speaker 4: trying to manufacture inflation really since the Japanese bubble popped
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  Speaker 4: about thirty five years ago, so they kind of piggybacked
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  Speaker 4: on the once in forty year spike and inflation that
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  Speaker 4: we and the rest of the globe experienced in twenty
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  Speaker 4: twenty two to drive through higher wages. But they were
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  Speaker 4: just a little bit too late, so they tried to
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  Speaker 4: raise interest rates just as the rest of the world
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  Speaker 4: was cutting, and that popped a huge speculative bubble in
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  Speaker 4: borrowing Japanese year at zero percent interest rates and investing
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  Speaker 4: that money around the world and hot assets.
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  Speaker 3: And because of that.
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  Speaker 4: Kind of countertrend rate rise by the BOJ, the Japanese
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  Speaker 4: equity market had has worst down day in thirty five years,
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  Speaker 4: down twelve percent on the day, but it's recovered all
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  Speaker 4: of that lost ground because the BOJ said it wouldn't
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  Speaker 4: raise interest rates anymore until financial termol had calmed down.
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  Speaker 2: Number four, You've got humanoids here? Are they going to
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  Speaker 2: be a big deal?
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  Speaker 1: Yes?
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  Speaker 4: I meet George shitson a little bit of left field there, Ryan,
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  Speaker 4: just to sort of keep us on our toes.
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  Speaker 3: But yeah, I mean, so what is a humanoid. It's
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  Speaker 3: a robot that looks like a.
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  Speaker 4: Human and is designed to copy human actions, so like
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  Speaker 4: walking upright and using its fingers, because the world is
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  Speaker 4: built for humans. Now, there are only four million robots
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  Speaker 4: in operation today. But you've got to remember, over the
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  Speaker 4: next twenty five years, the working age population is going
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  Speaker 4: to shrink by about three hundred million people.
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  Speaker 3: So that's a big deal.
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  Speaker 4: And in theory, we need to replace those workers, so
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  Speaker 4: we're going to need hundreds of millions of these humanoids.
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  Speaker 3: So it's a really early stage thematic to keep an
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  Speaker 3: eye on.
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  Speaker 2: Very interesting. Number five, the award for market Darling is
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  Speaker 2: passing from in Vidia to Tesla.
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  Speaker 3: Why yeah, super interesting.
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  Speaker 4: So up until Trump got elected, for the year, the
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  Speaker 4: Nvidia stop price was up about one hundred and eighty percent.
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  Speaker 4: This is on November fourth day before he got elected,
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  Speaker 4: and Tesla was flat for the year, so huge dispersion there.
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  Speaker 4: And in the few weeks since Trump got elected, Nvidia
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  Speaker 4: is down five percent and Tesla's up eighty percent. So
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  Speaker 4: in short, it pays to be a friend of Trump.
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  Speaker 4: And of course Musk is promising to run the Department
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  Speaker 4: of Government Efficiency, which if you think about that acronym,
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  Speaker 4: it's dodge where he will go into the federal government
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  Speaker 4: and rip out two trillion dollars of wasteful spending and implicitly,
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  Speaker 4: because this is not explicitly, implicitly, in return, he's going
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  Speaker 4: to get tariffs on competing Chinese EV's imposed and he
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  Speaker 4: may win the race to dominate your time as vehicle market.
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  Speaker 4: So to be fair that some other things that have happened,
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  Speaker 4: like you know, General motors set would stop funding crews,
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  Speaker 4: which is a potential autonomous vehicle competitor to Tesla.
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  Speaker 3: But it is a crazy passing of the market Darling Baton.
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  Speaker 2: Yeah absolutely, I mean in Vidio had grown and Athlet's
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  Speaker 2: be honest, they had their time in the sun. Have
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  Speaker 2: you number six got a chip bro? What's this about
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  Speaker 2: the chip wars?
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  Speaker 3: I'm assuming yeah, the ultra high consequence computer chip war was.
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  Speaker 4: So the story there, of course is given the manufacturing
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  Speaker 4: of advanced computer chips is can considered the most complex
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  Speaker 4: and precise manufacturing process humans have ever undertaken. And given
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  Speaker 4: these chips drive, almost every bit of technology will be
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  Speaker 4: touched and underpin economies and militaries. It's no wonder this
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  Speaker 4: is a normal power struggle. So a few factoids there
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  Speaker 4: when you think about I guess the US and China
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  Speaker 4: chip wars that is going on. So China imports more
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  Speaker 4: in chips than it doesn't oil, so it's at a
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  Speaker 4: natural disadvantage there. And Taiwan, or to be more precise, TESTMC,
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  Speaker 4: the company controls ninety percent of high end.
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  Speaker 3: Chip manufacturing, so you can imagine the natural tensions there.
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  Speaker 4: And the US even has an active government called the
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  Speaker 4: Chips Act, which is funneling billions of dollars into US chip.
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  Speaker 3: Designers and manufacturers to make sure they win this war.
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  Speaker 4: So some very big, sort of above our pay grade
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  Speaker 4: type things to keep an eye on that absolutely.
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  Speaker 2: Hey, thanks so much, Sam, Good to have you on
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  Speaker 2: the show. Good to have you running through your top
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  Speaker 2: six hits and misses on the stock market for the
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  Speaker 2: year that is. Sam Dickey Fisher funds.
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