Latest / Best of Business / Shane Solly: Harbour Asset Management spokesperson on financial markets factoring in Trump winning the presidency

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Shane Solly: Harbour Asset Management spokesperson on financial markets factoring in Trump winning the presidency · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks. They'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: Shane Sally Harbor Asset Management with US Now. Hey Shane,
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  Speaker 2: Hey here that Oh what's a big Oh? I'm Shane,
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  Speaker 2: I'm here for this. Are the markets still picking Donald
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  Speaker 2: Trump to win?
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  Speaker 3: They are? They are and soon we're seeing you know,
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  Speaker 3: we've seen the market position for a Republican win. What
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  Speaker 3: that means is that Trump winners had been rather to
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  Speaker 3: be outperforming. This is things like the US dollar, gold, crypto,
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  Speaker 3: all the US bank stocks have been pretty hot, they've
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  Speaker 3: run hard. Trump loses, things like the renewable sector anythink
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  Speaker 3: with a tariff risk, US COME and Barnes they've been
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  Speaker 3: sold off. So soonly we've seen a real swing towards
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  Speaker 3: Trump winning. We know this is going to take time
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  Speaker 3: to decide, you know, certainly last time round, back in
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  Speaker 3: twenty twenty, it took four days. Market didn't like its
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  Speaker 3: prety horta. Once we're through it, we saw markets recover.
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  Speaker 3: But this time around soon I think you know. One
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  Speaker 3: interesting point is bond you is these ten yure government bondyos.
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  Speaker 3: They used as a sort of a start point for investing.
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  Speaker 3: They've increased at three quarters of a percent from their
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  Speaker 3: low back in September. So there has been some really
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  Speaker 3: big swings here.
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  Speaker 2: Now, given that it is really close, and many say
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  Speaker 2: too close to col how do you reckon the markets
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  Speaker 2: are going to react to different electoral outcomes?
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  Speaker 3: Now, great question. Look sort of three scenarios of divided government,
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  Speaker 3: which means nobody has really got control. That would actually
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  Speaker 3: see a pretty neutral impact for bond markets and equity markets.
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  Speaker 3: Bond markets, so there's been interest rates. Now divided government
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  Speaker 3: makes it harder for some of that legislation, seeming some
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  Speaker 3: of the more extreme parts of the legislation that either
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  Speaker 3: parties talk about to get pushed through just harder to
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  Speaker 3: put through. So divided government kind of okay, republican clean
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  Speaker 3: sweep that may see these long term magistrates. There's bond
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  Speaker 3: viewers actually go higher again, just driven by stronger growth,
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  Speaker 3: higher inflation, and possibly the US would reserve not being
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  Speaker 3: so aggressive with its easing cycle. You might actually see
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  Speaker 3: the sheer markets see a little bit of a rally
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  Speaker 3: in the US. There's text burden for corporates being lower.
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  Speaker 3: If we saw a Harris Win, we may actually see
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  Speaker 3: long term bond years four and also see the U
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  Speaker 3: s shear market for because that would mean higher corporate
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  Speaker 3: tax rates. May also see a bit of a relief
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  Speaker 3: rarely in terms of tariffs, and certainly we're positioned at
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  Speaker 3: harbor for a range of different scenarios. It's really hard
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  Speaker 3: to call out there.
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  Speaker 2: If Trump wins and we have an increase in US tariffs,
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  Speaker 2: what does that mean for US?
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  Speaker 3: Look, I think you know, certainly these evolving international factors
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  Speaker 3: that that increases the risk for New Zealand's economic growth.
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  Speaker 3: You know, if we look at on balance the direct
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  Speaker 3: impacts of tariffs on New Zealand's exports to the US,
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  Speaker 3: it is limited the very heavy skew towards tourism with
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  Speaker 3: the US trade versus the fact that a lot of
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  Speaker 3: our agricultural exports can be moved to a lot of
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  Speaker 3: different locations. They're fungible, easy to move to different locations.
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  Speaker 3: So China is probably the interesting thing here. That's still
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  Speaker 3: our largest export market. If there is a spillover from
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  Speaker 3: potential increases in tariffs in China, there will be an impact.
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  Speaker 3: But of course we're on the cusp of another set
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  Speaker 3: of Chinese policy stimulus, so there could be a bit
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  Speaker 3: of an offset. So the short answer is we could
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  Speaker 3: actually be. It will be a risk, but it may
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  Speaker 3: not be as big as some people thenk.
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  Speaker 2: Yeah, okay. Now on the subject to the stimulus, it's
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  Speaker 2: a big week for central bank policy decisions around around
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  Speaker 2: the world this week. What are we expecting? What does
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  Speaker 2: it mean for us?
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  Speaker 3: Yeah? Look, we've got central banks responsible more than a
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  Speaker 3: third of the global economy set to hopefully reduce borrowing
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  Speaker 3: costs in the next few days. The US Federal Reserve
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  Speaker 3: due to come out and they are expected to cut
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  Speaker 3: interest rates again instantly. We're seeing this after a long
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  Speaker 3: period of interest rates being increased globally, putting pressure on
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  Speaker 3: global economies, and parts of our economy starting to go
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  Speaker 3: the other way. So certainly this potential for low interest
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  Speaker 3: rates is going to be helpful for our economy and
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  Speaker 3: that's going to be helpful for our sheer market.
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  Speaker 2: Good stuff. Shane's always good to talk to you, mate.
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  Speaker 2: Thank you so much. It's Shane Solly and we'll talk
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  Speaker 2: to you next week. Harbor Asset Management.
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