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Speaker 1: Now the Iran War five weeks on. That's where we're

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Speaker 1: at right The real story is starting to show up

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Speaker 1: where it matters most, which is in the company results,

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Speaker 1: in the consumer confidence and the everyday costs outside of

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Speaker 1: the petrol pump. Sam Dickey from Fisher Funds is with

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Speaker 1: us on this high.

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Speaker 2: Sam, Good evening, Heather.

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Speaker 1: So what are the companies actually saying right now?

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Speaker 2: Yes, a few different buckets. So firstly, the obvious one

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Speaker 2: being companies with fuel as a direct cost. And Scott Kirby,

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Speaker 2: the CEO of United Airlines, is stress testing his fleet

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Speaker 2: against oil hitting one hundred and seventy five dollars a barrel.

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Speaker 2: Now that's not a worst case, it's more a planning assumption.

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Speaker 2: Just for context. That adds a potential eleven billion dollar

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Speaker 2: dollars to United Airlines costs, which is more than double

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Speaker 2: their best ever profit year, and they're already cutting five

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Speaker 2: percent of flights on the most marginal routes. The second

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Speaker 2: bucket is Middle Eastern buyers have been critical growth drivers

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Speaker 2: for luxury demand and one hundred billion dollars are being

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Speaker 2: wiped off luxury valuations in the last month. And I

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Speaker 2: think Bentley's CEO on an investor call s at at best,

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Speaker 2: people in the Middle East sadly have thoughts on their

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Speaker 2: mind other than looking for a new Bentley right now.

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Speaker 2: And Ferrari's actually suspended deliveries to the region entirely. And

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Speaker 2: this is the hidden inflation story which we talked about before.

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Speaker 2: UPS and FedEx both just announced emergency fuel charges on

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Speaker 2: international freight. Container ships with goods on them are rerouting

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Speaker 2: via South in Africa, which adds up to forty days

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Speaker 2: to transit time. So if you think about that, those

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Speaker 2: additional costs land on shop shelves in the US and

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Speaker 2: sixty days. And here's the lest obvious one. So Samsung

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Speaker 2: and esk Heine's out of Korea make the chips that

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Speaker 2: power AI and those chips run on helium. Helium cools

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Speaker 2: the superconducting magnets that make semiconductors work, and Katar produces

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Speaker 2: a third of the world's helium. And then all ships

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Speaker 2: through hor moves of course, so we do think chip

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Speaker 2: makers will be prioritized over party balloons, but I do

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Speaker 2: think there's one to keep an eye on either. Yeah, totally.

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Speaker 1: And what are the consumer data points telling.

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Speaker 2: Us sum of confidence measures, which is sort of like

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Speaker 2: the crystal balls on future spending patterns for consumers are

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Speaker 2: under pressure. So the US University of Michigan sentiment fell

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Speaker 2: to fifty three, which is lower than ninety eight percent

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Speaker 2: of all months since the survey began in ninety seventy eight.

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Speaker 2: Closer to home, Australian consumer confidence just had a record

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Speaker 2: low ever in fifty years a couple of days ago.

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Speaker 2: In Europe's the same story, So consumer confidence had one

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Speaker 2: of the largest falls on record outside of the pandemic

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Speaker 2: and the Ukraine conflict. And the important thing to remember

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Speaker 2: is real consumer spending declines two to three months after

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Speaker 2: an oil shock. That's what history tells us, So any

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Speaker 2: spending cliff is likely to hit in June.

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Speaker 1: And so what does this mean for investors?

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Speaker 2: Do you think? I think we all know that the

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Speaker 2: longer this goes on for that, the deeper the future

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Speaker 2: consumer and business spending cuts will be. And the good

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Speaker 2: news is, though, I think I think the US government

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Speaker 2: knows this too, And as Goldman Sachs reminds us, in

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Speaker 2: twenty one military comp conflicts over forty years, markets were

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Speaker 2: high in ninety percent of the time eight weeks later,

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Speaker 2: So nobody knows when the straight upall moves opens. But

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Speaker 2: when it does, the relief rally in stocks will be

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Speaker 2: sharp and fast. Sam, thank you very much.

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Speaker 1: Just a lot to consider there, Sam Dickey Fisher Funds.

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Speaker 2: For more from Heather Duplessy Allen Drive. Listen live to

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