1 00:00:00,280 --> 00:00:03,279 Speaker 1: Shane Sally Harbor Asset Management with US. Now. Hey, Shane, 2 00:00:03,640 --> 00:00:06,400 Speaker 1: Hey here that Oh what's a big Oh, I'm Shane, 3 00:00:06,440 --> 00:00:08,760 Speaker 1: I'm here for this. Are the markets still picking Donald 4 00:00:08,800 --> 00:00:09,320 Speaker 1: Trump to win? 5 00:00:10,240 --> 00:00:12,520 Speaker 2: They are? They are, And certainly we're seeing, you know, 6 00:00:12,560 --> 00:00:15,280 Speaker 2: we've seen the market position for a Republican win. What 7 00:00:15,400 --> 00:00:17,680 Speaker 2: that means is that Trump winners have been rather to 8 00:00:17,720 --> 00:00:21,120 Speaker 2: be outperforming. This is things like the US dollar, gold, crypto, 9 00:00:21,920 --> 00:00:23,960 Speaker 2: all the US bank stocks have been pretty hot. They've 10 00:00:24,040 --> 00:00:26,960 Speaker 2: run hard. Trump loses, things like the renewable sector, any 11 00:00:26,960 --> 00:00:30,160 Speaker 2: think with a tiff risk, US gamement bonds they've been 12 00:00:30,200 --> 00:00:34,720 Speaker 2: sold off. So certainly we've seen a real swing towards 13 00:00:34,800 --> 00:00:37,480 Speaker 2: Trump winning. We know this is going to take time 14 00:00:37,520 --> 00:00:40,080 Speaker 2: to decide, you know, certainly last time round, back in 15 00:00:40,080 --> 00:00:42,840 Speaker 2: twenty twenty, it took four days market didn't like it's 16 00:00:42,840 --> 00:00:45,400 Speaker 2: pretty VRD. Once we're through that, we saw markets recover. 17 00:00:45,479 --> 00:00:49,000 Speaker 2: But this time around, certainly, I think one interesting point 18 00:00:49,040 --> 00:00:51,320 Speaker 2: is bondy is these tenure government bond yo is they 19 00:00:51,479 --> 00:00:53,479 Speaker 2: used as a sort of a start point for investing. 20 00:00:53,880 --> 00:00:56,840 Speaker 2: They've increased three quarters of percent from their low back 21 00:00:56,880 --> 00:01:00,400 Speaker 2: in September, so there has been some really big swing heather. 22 00:01:00,920 --> 00:01:03,880 Speaker 1: Now, given that it is really close, and many say 23 00:01:03,880 --> 00:01:05,400 Speaker 1: too close to call, how do you reckon the markets 24 00:01:05,400 --> 00:01:07,440 Speaker 1: are going to react to different electoral outcomes? 25 00:01:08,160 --> 00:01:12,000 Speaker 2: Now, great question. Look sort of three scenarios of divided government, 26 00:01:12,360 --> 00:01:15,960 Speaker 2: which means nobody has really got control. That would actually 27 00:01:16,000 --> 00:01:19,880 Speaker 2: see a pretty neutral impact for bond markets and equity markets. 28 00:01:19,880 --> 00:01:22,639 Speaker 2: Bond markets, so there's been interest rates and divided government 29 00:01:22,680 --> 00:01:25,640 Speaker 2: makes it harder for some of the legislation. See some 30 00:01:25,640 --> 00:01:27,959 Speaker 2: of the more extreme parts of the legislation that either 31 00:01:28,360 --> 00:01:31,320 Speaker 2: parties talk about to get pushed through, just harder to 32 00:01:31,360 --> 00:01:35,199 Speaker 2: put through. So divided government kind of okay, republican clean 33 00:01:35,240 --> 00:01:37,920 Speaker 2: sweep that may see these long term magistrates. There's bond 34 00:01:38,000 --> 00:01:42,000 Speaker 2: years actually go higher again, just driven by stronger growth, 35 00:01:42,080 --> 00:01:45,839 Speaker 2: higher inflation, and possibly the US would reserve not being 36 00:01:45,840 --> 00:01:48,840 Speaker 2: so aggressive with its easing cycle. You might actually see 37 00:01:48,800 --> 00:01:50,280 Speaker 2: the sheer markets, see a little bit of a rally 38 00:01:50,320 --> 00:01:53,200 Speaker 2: in the US. There's tax burden for corporate spen lower. 39 00:01:53,800 --> 00:01:55,920 Speaker 2: If we saw a Harris win, we may actually see 40 00:01:55,960 --> 00:01:59,760 Speaker 2: long term bond years four and also see the US 41 00:01:59,760 --> 00:02:03,320 Speaker 2: sheha market for because that would mean higher corporate tax rates. 42 00:02:03,840 --> 00:02:06,200 Speaker 2: May also see a bit of a relief rarely in 43 00:02:06,320 --> 00:02:10,320 Speaker 2: terms of tariffs, and certainly we're positioned at harbor for 44 00:02:10,360 --> 00:02:12,760 Speaker 2: a range of different scenarios. It's really hard to call 45 00:02:12,800 --> 00:02:13,120 Speaker 2: out there. 46 00:02:13,639 --> 00:02:16,640 Speaker 1: If Trump wins and we have an increase in US tariffs, 47 00:02:16,680 --> 00:02:17,600 Speaker 1: what does that mean for US? 48 00:02:18,639 --> 00:02:21,720 Speaker 2: Look, I think certainly these evolving international factors that that 49 00:02:21,960 --> 00:02:26,480 Speaker 2: increases the risk for New Zealand's economic growth. You know, 50 00:02:26,520 --> 00:02:29,400 Speaker 2: if we look at on balance the direct impacts of 51 00:02:29,440 --> 00:02:31,960 Speaker 2: tariffs on New Zealand's exports of the US, it is 52 00:02:32,040 --> 00:02:37,799 Speaker 2: limited the very heavy skew towards tourism with the US 53 00:02:37,919 --> 00:02:41,960 Speaker 2: trade versus the fact that a lot of our agricultural 54 00:02:41,960 --> 00:02:44,880 Speaker 2: exports can be moved to a lot of different locations. 55 00:02:44,880 --> 00:02:48,960 Speaker 2: They're fungible, easy to move to different locations. So China 56 00:02:49,040 --> 00:02:50,959 Speaker 2: is probably the interesting thing here. That's still our largest 57 00:02:50,960 --> 00:02:54,400 Speaker 2: export market. If there is a spillover from potential increases 58 00:02:54,440 --> 00:02:57,440 Speaker 2: in tariffs in China, that will be an impact. But 59 00:02:57,480 --> 00:02:59,440 Speaker 2: of course we're on the cusp of another set of 60 00:02:59,639 --> 00:03:02,080 Speaker 2: china is policy stimulus, so there could be a bit 61 00:03:02,120 --> 00:03:04,800 Speaker 2: of an offset. So the short answer is we could 62 00:03:04,840 --> 00:03:08,919 Speaker 2: actually be It will be a risk, but it may 63 00:03:08,960 --> 00:03:10,280 Speaker 2: not be as big as some people. 64 00:03:10,280 --> 00:03:12,560 Speaker 1: Then yeah, okay. Now, on the subject of the stimulus, 65 00:03:12,560 --> 00:03:14,919 Speaker 1: it's a big week for central bank policy decisions around 66 00:03:15,000 --> 00:03:17,000 Speaker 1: around the world this week. What are we expecting? What 67 00:03:17,000 --> 00:03:18,079 Speaker 1: does it mean for us? 68 00:03:18,440 --> 00:03:21,600 Speaker 2: Yeah? Look, we've got central banks responsible more than a 69 00:03:21,680 --> 00:03:24,920 Speaker 2: third of the global economy set to hopefully reduce borrowing 70 00:03:25,000 --> 00:03:26,960 Speaker 2: costs in the next few days. The US Federal Reserve 71 00:03:27,840 --> 00:03:31,079 Speaker 2: due to come out and they are expected to cut 72 00:03:31,160 --> 00:03:34,520 Speaker 2: interest rates again instantly. We're seeing this after a long 73 00:03:34,560 --> 00:03:37,360 Speaker 2: period of interest rates being increased globally, putting pressure on 74 00:03:37,400 --> 00:03:42,240 Speaker 2: global economies, and parts of our economy starting to go 75 00:03:42,240 --> 00:03:44,760 Speaker 2: the other way. So certainly this potential for low interest 76 00:03:44,840 --> 00:03:47,280 Speaker 2: rates is going to be helpful for our economy and 77 00:03:47,280 --> 00:03:49,200 Speaker 2: that's going to be helpful for our sheer market. 78 00:03:50,120 --> 00:03:51,680 Speaker 1: Good stuff. Shane's always good to talk to you mate. 79 00:03:51,680 --> 00:03:53,480 Speaker 1: Thank you so much. It's Shane Sley. I will talk 80 00:03:53,480 --> 00:03:55,120 Speaker 1: to you next week harbor Asset Management. 81 00:03:55,720 --> 00:03:58,920 Speaker 2: For more from Hither Duplessy Alan Drive, listen live to 82 00:03:59,000 --> 00:04:02,000 Speaker 2: news talks. It'd be from four pm weekdays, or follow 83 00:04:02,040 --> 00:04:03,760 Speaker 2: the podcast on iHeartRadio.