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Speaker 1: Bryan Bridge.

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Speaker 2: Let's go to Remy Morgan from Milford for our market update. Remy,

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Speaker 2: good evening, good eathing. Right, let's start with the US

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Speaker 2: tech stocks showing just some signs of weakness. Again, this

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Speaker 2: is this AI bubble fear thing back.

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Speaker 1: Yes, so the market has reacted negatively following a couple

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Speaker 1: of results from some of the most followed AI stocks

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Speaker 1: at the back end of last week. Now, the results

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Speaker 1: themselves were not actually negative, but both Oracle and Broadcom

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Speaker 1: were down over ten percent, and I think that shows

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Speaker 1: that it's quite difficult to deliver against the very high

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Speaker 1: expectations investors place on these AI stocks. Oracle once again

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Speaker 1: raised its capex guidance. I think that spooked investors who

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Speaker 1: were already concerned that they're over investing in AI data

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Speaker 1: centers and the returns that that will generate. Broadcom reported

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Speaker 1: strong numbers and guided to AI chip sales growing more

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Speaker 1: than one hundred and fifty percent next year. But even

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Speaker 1: this level of growth seemed to disappoint investor expectations. So

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Speaker 1: I think it's likely that we'll see heightened AI scrutiny

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Speaker 1: until these AI investments and revenues start to really prove out.

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Speaker 2: Really outside of tech and the business of tech. The

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Speaker 2: stocks in the US generally have been a bit softer

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Speaker 2: this week as well. What's going on there? What's driving that?

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Speaker 1: Yet? So putting the AI fears aside, we have had

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Speaker 1: some slight softness in the US equity markets more broadly,

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Speaker 1: and that's because this week is a big week for

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Speaker 1: US data. We've got key data releases that indicate the

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Speaker 1: shape of the US economy and these can influence the

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Speaker 1: FEDS monetary policy decisions. Now, a lot of that data

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Speaker 1: has actually been delayed following that extended US government shutdown.

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Speaker 1: That's caused some concerns on the data quality, and the

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Speaker 1: market hasn't really been sure what to expect, So that's

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Speaker 1: created some uncertainty in the lead up.

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Speaker 2: What the US started. Do we get this week jobs?

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Speaker 1: Yep, So overnight we had the US employment report that

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Speaker 1: showed the US job mark it remains sluggish, but it's

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Speaker 1: not rapidly deteriorating. We also had the US October retail

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Speaker 1: sales which was a flat reed. Now, these two data

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Speaker 1: points didn't cause any material changes to market expectations for

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Speaker 1: interest rate cuts, but we did see the US equity

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Speaker 1: markets slightly softer overnight. Oh sorry, sorry, right, I was

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Speaker 1: just gonna say. We also get the USCPI print later

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Speaker 1: this week, which again won't be for a complete period,

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Speaker 1: so we could see markets continuing to be cautious.

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Speaker 2: Roger that back home, We've just spoke to co Op

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Speaker 2: Bank and they've been you know, they were one of

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Speaker 2: the first actually to put their longer term rates back up,

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Speaker 2: and we've seen a couple of banks do that now

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Speaker 2: after that November rbn Z cut.

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Speaker 1: Yeah, that's right. So what's happened since the last cut

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Speaker 1: is that market expectations have actually led to an increase

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Speaker 1: in New Zealand interest rates swaps. That's what flows through

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Speaker 1: to the increase in increases in some of those bank

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Speaker 1: mortgage rates. Now that could putent actually pose a bit

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Speaker 1: of a risk to economic growth, but we have had

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Speaker 1: the Reserve Bank governor come out this week with a

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Speaker 1: few comments that has seen some moves lower in swap rates,

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Speaker 1: not quite back to where they were pre the November

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Speaker 1: o CR announcement. But it's also worth mentioning that there's

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Speaker 1: still a relatively high proportion of mortgages that are yet

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Speaker 1: to roll over on to what are still overall lower

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Speaker 1: mortgage rates.

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Speaker 2: Nice one Roomy appreciate that. Thank you. Rumy Morgan mil

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Speaker 2: Fanaset Management with our market update tonight. For more from

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