1 00:00:00,160 --> 00:00:02,160 Speaker 1: And I welcome to the program. First time I've spoken 2 00:00:02,240 --> 00:00:04,760 Speaker 1: to Shane Solely from Harvard Asset Management. 3 00:00:04,800 --> 00:00:07,800 Speaker 2: Hello, Shane, Hey Andrew here, you going very good. 4 00:00:07,920 --> 00:00:10,880 Speaker 1: We've got some inflation data data. We've got some inflation 5 00:00:11,200 --> 00:00:14,480 Speaker 1: data out from the United States of America and it's 6 00:00:14,480 --> 00:00:16,920 Speaker 1: looking promising. And could that mean a rate cut by 7 00:00:16,960 --> 00:00:17,320 Speaker 1: the Fed? 8 00:00:18,040 --> 00:00:20,320 Speaker 2: Yeah, it is. It is data data, whatever you want 9 00:00:20,320 --> 00:00:23,080 Speaker 2: to call it. And we saw a personal consumption experience. Sure, 10 00:00:23,120 --> 00:00:26,640 Speaker 2: this is the key measure that the Central Bank and 11 00:00:26,680 --> 00:00:29,040 Speaker 2: the US the Digital Reserve focuses on. It came in 12 00:00:29,360 --> 00:00:31,920 Speaker 2: zero point two percent for during two point six percent 13 00:00:31,960 --> 00:00:34,920 Speaker 2: for the year, and it just means that the US 14 00:00:35,000 --> 00:00:37,880 Speaker 2: is on track to hit the fence inflation target. They've 15 00:00:37,880 --> 00:00:41,800 Speaker 2: got a meeting on Thursday to discuss whether they're going 16 00:00:41,800 --> 00:00:45,120 Speaker 2: to cut rates or not. And certainly markets don't think 17 00:00:45,159 --> 00:00:48,160 Speaker 2: they would do it this time, but they'll start using 18 00:00:48,680 --> 00:00:52,639 Speaker 2: language it's more softer about reflecting the full on inflation 19 00:00:52,840 --> 00:00:55,840 Speaker 2: and labor markets, and so there's a lot of thinking 20 00:00:55,840 --> 00:00:59,200 Speaker 2: about as the CUPTA in September or there's a later 21 00:01:00,320 --> 00:01:02,480 Speaker 2: and summer markets have got quite a lot price. Then 22 00:01:02,480 --> 00:01:04,200 Speaker 2: if they do start cutting, there's a long way to 23 00:01:04,240 --> 00:01:06,600 Speaker 2: go back to sort of four percent by June twenty five, 24 00:01:06,680 --> 00:01:08,800 Speaker 2: so more than one and a quarter percent. And of 25 00:01:08,800 --> 00:01:10,920 Speaker 2: course that's helpful for our part of the world as well. 26 00:01:10,920 --> 00:01:16,120 Speaker 2: Be whereas our long term government bonders, interest rates teem 27 00:01:16,200 --> 00:01:18,119 Speaker 2: to refer back to that US rate. 28 00:01:19,240 --> 00:01:20,479 Speaker 1: Do we want lower rates? 29 00:01:21,800 --> 00:01:22,760 Speaker 2: Do we want you know? 30 00:01:22,920 --> 00:01:25,520 Speaker 1: You know what I mean, because during COVID we had 31 00:01:25,720 --> 00:01:28,640 Speaker 1: everyone was going, God, God, do it go going vis 32 00:01:28,920 --> 00:01:31,000 Speaker 1: they're giving the money away. It's free money, and they 33 00:01:31,040 --> 00:01:34,240 Speaker 1: can actually distort an economy just as much as expensive money. 34 00:01:34,240 --> 00:01:36,640 Speaker 2: You're right, yeah, And there's no such thing as as 35 00:01:36,720 --> 00:01:39,280 Speaker 2: three rates, but you're right. They're abnormally low, and it 36 00:01:39,319 --> 00:01:42,520 Speaker 2: creates some abnormal outcomes. And that's the price we're paying 37 00:01:42,600 --> 00:01:45,000 Speaker 2: right now, Andrew. And that's why we've got central bank 38 00:01:45,080 --> 00:01:49,560 Speaker 2: rates back to above average. Long run This is still 39 00:01:49,560 --> 00:01:51,360 Speaker 2: a by beverage, and so we would expect them to 40 00:01:51,400 --> 00:01:53,840 Speaker 2: settle somewhere a little bit lower. But I'd like to 41 00:01:53,880 --> 00:01:55,919 Speaker 2: see them to go back to the COVID lows unless 42 00:01:55,960 --> 00:01:59,520 Speaker 2: we do actually have a disaster like COVID or war. 43 00:01:59,440 --> 00:02:01,680 Speaker 1: Or something like that. But there we go. Is it is, 44 00:02:01,680 --> 00:02:04,280 Speaker 1: by the way, it is data because I checked this 45 00:02:04,400 --> 00:02:08,440 Speaker 1: apparently data data was the americanization. Data is what Routers says, 46 00:02:08,680 --> 00:02:10,840 Speaker 1: and I'm trying to train myself to say data. So 47 00:02:10,919 --> 00:02:15,000 Speaker 1: let's talk about New Zealand economic data, which continue to 48 00:02:15,000 --> 00:02:15,960 Speaker 1: be weaker than we thought. 49 00:02:16,560 --> 00:02:19,799 Speaker 2: Yeah, and anyone's at the string of weaker data confirmed 50 00:02:19,800 --> 00:02:22,160 Speaker 2: again with another piece today, which is a data point 51 00:02:22,200 --> 00:02:24,840 Speaker 2: that's not looked at very often. It's killed jobs employment 52 00:02:24,880 --> 00:02:28,040 Speaker 2: and that's a bit of an indicator about whether the 53 00:02:28,080 --> 00:02:31,440 Speaker 2: employment growth is stepping up or down. And unfortunately we're 54 00:02:31,520 --> 00:02:34,080 Speaker 2: down zero point six percent for the gene quarter, and 55 00:02:34,120 --> 00:02:38,160 Speaker 2: that means the unemployment that I may actually get above 56 00:02:38,200 --> 00:02:42,440 Speaker 2: five percent, and the Reserve Bank that's again when to 57 00:02:42,440 --> 00:02:44,639 Speaker 2: give about sitting policy. They're thinking it's going to be 58 00:02:44,639 --> 00:02:46,519 Speaker 2: around as a four and a half four point six percent. 59 00:02:46,840 --> 00:02:50,040 Speaker 2: So unemployment will we hire means there's more capacity in 60 00:02:50,120 --> 00:02:52,799 Speaker 2: economy taking some of that inflation push it down. We 61 00:02:53,080 --> 00:02:54,519 Speaker 2: all know it, we can see it in the street. 62 00:02:55,800 --> 00:02:59,160 Speaker 2: But there's a question about central bank policy works for 63 00:02:59,200 --> 00:03:02,760 Speaker 2: a lag, takes time to work, and so we're all 64 00:03:02,760 --> 00:03:05,520 Speaker 2: thinking about when does the Reserve bankings on cut rates. 65 00:03:06,680 --> 00:03:09,400 Speaker 2: Do they go on August or in fact, do they 66 00:03:09,440 --> 00:03:11,640 Speaker 2: go a little bit later as some of those non 67 00:03:11,720 --> 00:03:15,519 Speaker 2: trabletation peaks. So it's kind of win rather than if. 68 00:03:16,080 --> 00:03:19,280 Speaker 2: And certainly our economies is a weeknd quite fast. And 69 00:03:19,320 --> 00:03:22,919 Speaker 2: I know mister Nicolaie wallis making some comments this afternoon 70 00:03:23,000 --> 00:03:26,280 Speaker 2: saying who you are, Reserve Bank, You've got what you need? 71 00:03:27,120 --> 00:03:29,639 Speaker 1: Yes, But she wouldn't quite say that with me because 72 00:03:29,680 --> 00:03:31,560 Speaker 1: she's got She said, I've got to stay in my 73 00:03:31,600 --> 00:03:33,600 Speaker 1: own lane. But you know it's a week wink and 74 00:03:33,639 --> 00:03:34,480 Speaker 1: a nudge nudge there. 75 00:03:34,560 --> 00:03:39,280 Speaker 2: It's important central bank that's in attendant the reason people 76 00:03:39,320 --> 00:03:39,800 Speaker 2: trust us. 77 00:03:39,880 --> 00:03:42,240 Speaker 1: Yeah, but go on, honestly, wink wink, nudge nudge. Now 78 00:03:42,480 --> 00:03:44,720 Speaker 1: it's not just Kimi Rail that has problems with boats, 79 00:03:44,920 --> 00:03:47,680 Speaker 1: because Fletcher Building had a problem with a cement bulk 80 00:03:47,800 --> 00:03:51,040 Speaker 1: cement carrier ship as well, and now they're building their 81 00:03:51,040 --> 00:03:54,280 Speaker 1: whole share prices down. They've had another further earnings down, Greg, 82 00:03:54,360 --> 00:03:55,760 Speaker 1: What's what's going wrong there? 83 00:03:55,960 --> 00:03:58,640 Speaker 2: Yeah, really unfortunate for Fletcher Building. Ships down out of 84 00:03:58,640 --> 00:04:01,960 Speaker 2: the five point seventy cent to day turned three dollars thirteen. 85 00:04:02,640 --> 00:04:05,720 Speaker 2: And indeed they've command given a profit guidance warning of 86 00:04:06,640 --> 00:04:09,960 Speaker 2: a ten to thirty million dollar hits from the disruption 87 00:04:10,240 --> 00:04:14,200 Speaker 2: with the vessel, the cement carrier having to be a 88 00:04:14,320 --> 00:04:16,400 Speaker 2: paid out of the next two to four months and 89 00:04:16,440 --> 00:04:19,080 Speaker 2: that tend to thirty men is about a four percent 90 00:04:19,160 --> 00:04:22,080 Speaker 2: cut to earning spot Bus relative to what the market 91 00:04:22,120 --> 00:04:26,320 Speaker 2: had expected. It's really unfortunate for Fletcher Building mainly have 92 00:04:26,360 --> 00:04:29,200 Speaker 2: a modest impact for the new Zealm building Itus through. 93 00:04:29,200 --> 00:04:32,760 Speaker 2: There are ways around this. They can truck, they can 94 00:04:32,880 --> 00:04:37,000 Speaker 2: use containerized shipping to get that cement to where it 95 00:04:37,000 --> 00:04:39,800 Speaker 2: needs to be, or they can actually do contracts with 96 00:04:39,920 --> 00:04:43,280 Speaker 2: third party cement supplies such as Wholesome. So yep, a 97 00:04:43,279 --> 00:04:45,919 Speaker 2: bit of a hit for Fletcher Building. They just can't 98 00:04:45,760 --> 00:04:48,800 Speaker 2: catch a break of the month and this is just 99 00:04:48,920 --> 00:04:50,080 Speaker 2: another cack. 100 00:04:50,480 --> 00:04:52,480 Speaker 1: Good on your Shane Sally I thank you so much 101 00:04:52,760 --> 00:04:55,600 Speaker 1: and Shane comes to us from Harbord Asset Management. 102 00:04:56,440 --> 00:04:59,680 Speaker 2: For more from Hither duplessy Ellen Drive, listen Lived and 103 00:04:59,760 --> 00:05:02,760 Speaker 2: Used Hawk Said Be from four pm weekdays, or follow 104 00:05:02,800 --> 00:05:04,560 Speaker 2: the podcast on iHeartRadio.