1 00:00:00,080 --> 00:00:02,560 Speaker 1: Time to chicken on the market. Samtrathuy is from Milford 2 00:00:02,560 --> 00:00:03,239 Speaker 1: Asset Management. 3 00:00:03,240 --> 00:00:05,480 Speaker 2: Hey, Sam, good evening, Heather. 4 00:00:05,320 --> 00:00:07,320 Speaker 1: Okay, Sam. So, we're starting to see the signs that 5 00:00:07,320 --> 00:00:10,360 Speaker 1: Trump's tariffs are impacting the corporate earnings and whatnot. What 6 00:00:10,400 --> 00:00:12,680 Speaker 1: are you seeing coming through? What are the initial impacts? 7 00:00:13,560 --> 00:00:16,440 Speaker 2: Yes, we certainly are. I think there's indications both locally 8 00:00:16,760 --> 00:00:19,880 Speaker 2: and from the large US listed companies that these tariffs 9 00:00:19,920 --> 00:00:22,279 Speaker 2: are real and they're starting to buy it. So the 10 00:00:22,320 --> 00:00:25,200 Speaker 2: current earning season underway in the US has been dominated 11 00:00:25,200 --> 00:00:27,920 Speaker 2: by a few concerns from a pretty diverse list of 12 00:00:27,960 --> 00:00:31,680 Speaker 2: companies that these tariffs are coming through. It's the first 13 00:00:31,720 --> 00:00:35,000 Speaker 2: time that many of these businesses have spoken publicly since 14 00:00:35,040 --> 00:00:37,839 Speaker 2: Trump's Liberation Day. So to give you a flavor of 15 00:00:37,880 --> 00:00:40,200 Speaker 2: it at the very headline level, the port of Los 16 00:00:40,240 --> 00:00:42,519 Speaker 2: Angeles was out overnight, and that's the busiest port in 17 00:00:42,560 --> 00:00:46,840 Speaker 2: the US, indicating that pandemic style shipping issues are coming back. 18 00:00:46,920 --> 00:00:49,800 Speaker 2: So imports from China down thirty percent in the past 19 00:00:49,840 --> 00:00:52,880 Speaker 2: week or so as many retailers ground to a halt, 20 00:00:53,520 --> 00:00:56,080 Speaker 2: and it's a matter of weeks before inventory starts to 21 00:00:56,080 --> 00:01:00,600 Speaker 2: inty out on many shelves across the US. Else Where 22 00:01:00,600 --> 00:01:03,680 Speaker 2: you've got the likes of Delivery Giant or courier ups 23 00:01:03,800 --> 00:01:06,200 Speaker 2: indicating that it's going to cut twenty thousand jobs to 24 00:01:06,240 --> 00:01:09,639 Speaker 2: lower costs in response. And more broadly, it's a variety 25 00:01:09,680 --> 00:01:13,160 Speaker 2: of companies from airlines to large car manufacturers having to 26 00:01:13,160 --> 00:01:15,800 Speaker 2: either slash or pull back their outlook statements for the 27 00:01:15,840 --> 00:01:19,240 Speaker 2: air ahead. So that's globally. Locally, our companies haven't been 28 00:01:19,280 --> 00:01:24,360 Speaker 2: immune either. Those with material US exposures have also reported impact. 29 00:01:24,440 --> 00:01:28,080 Speaker 2: So at the very pointing end of it, caravan operator 30 00:01:28,160 --> 00:01:31,880 Speaker 2: Tourism Holdings indicated in a recent update a sharp drop 31 00:01:32,120 --> 00:01:34,800 Speaker 2: of over fifty percent and inbound bookings for its US 32 00:01:34,840 --> 00:01:39,120 Speaker 2: business and elsewhere, Wind Exported Delegate signaled that there's real 33 00:01:39,200 --> 00:01:41,800 Speaker 2: uncertainty and it's forward orders from the US distributors. So 34 00:01:42,240 --> 00:01:45,399 Speaker 2: tariffs are becoming real and are beginning to impact earnings. 35 00:01:45,640 --> 00:01:48,120 Speaker 1: And so how is this changing what companies say about 36 00:01:48,120 --> 00:01:48,680 Speaker 1: their outlook? 37 00:01:49,960 --> 00:01:52,360 Speaker 2: What is driving I think the large US companies to 38 00:01:52,360 --> 00:01:55,040 Speaker 2: really slash or walk away from their guidance or the 39 00:01:55,120 --> 00:01:58,080 Speaker 2: typical outlook statement is the real uncertainty around the situation. 40 00:01:58,240 --> 00:02:01,560 Speaker 2: So these management teams are sitting they're either seeing very 41 00:02:01,600 --> 00:02:03,920 Speaker 2: weak demand all of a sudden turn up or having 42 00:02:03,920 --> 00:02:06,560 Speaker 2: to put through very material price likes to their products 43 00:02:06,560 --> 00:02:09,440 Speaker 2: and wondering what's that going to do to consumer demand. 44 00:02:09,600 --> 00:02:13,560 Speaker 2: So with their prior outlock comments unlikely reflecting anything like 45 00:02:14,000 --> 00:02:16,400 Speaker 2: what has played out in that announcement earlier this month 46 00:02:16,440 --> 00:02:20,720 Speaker 2: on Liberation Day, it is really causing that uncertainty. So 47 00:02:20,919 --> 00:02:23,080 Speaker 2: at the extreme end of it, as an example, you've 48 00:02:23,080 --> 00:02:25,880 Speaker 2: got the US airline industry, and demand in that sector 49 00:02:25,880 --> 00:02:29,000 Speaker 2: has been very quick to respond. So every major US 50 00:02:29,200 --> 00:02:32,800 Speaker 2: airline Delta, American Airlines, etc. Has pulled guidance and in 51 00:02:32,800 --> 00:02:36,320 Speaker 2: the case of United they have provided a recession scenario 52 00:02:36,400 --> 00:02:40,800 Speaker 2: where it's consistent with very sharp weakening demand for domestically 53 00:02:40,919 --> 00:02:44,240 Speaker 2: to travel. So ultimately huge uncertainty. No one has a 54 00:02:44,240 --> 00:02:45,800 Speaker 2: clear view of where we're going to end up, and 55 00:02:45,800 --> 00:02:49,200 Speaker 2: it's delaying businesses making decisions to see how the situation 56 00:02:49,400 --> 00:02:49,959 Speaker 2: plays out. 57 00:02:50,160 --> 00:02:51,760 Speaker 1: Okay, So Sam put this all together, how do you 58 00:02:51,760 --> 00:02:54,040 Speaker 1: think the market is interpreting the weekend earnings? Because we 59 00:02:54,120 --> 00:02:55,960 Speaker 1: had a decent recovery in the last week or so, 60 00:02:56,040 --> 00:02:56,400 Speaker 1: haven't we. 61 00:02:57,320 --> 00:03:00,000 Speaker 2: That's right, Yes, certainly the market has recovered quite material 62 00:03:00,040 --> 00:03:02,960 Speaker 2: early in the past week after that initial tariff shock 63 00:03:03,040 --> 00:03:04,799 Speaker 2: at the extend of the tariffs earlier in the month. 64 00:03:04,919 --> 00:03:07,200 Speaker 2: So I think it's fair to say the market is 65 00:03:07,240 --> 00:03:09,800 Speaker 2: taking a glass hufful approach to earnings at this stage, 66 00:03:09,880 --> 00:03:13,040 Speaker 2: so reflecting essentially that it hopes trade deals will be 67 00:03:13,080 --> 00:03:15,520 Speaker 2: done quickly and the impacts that we are seeing coming 68 00:03:15,520 --> 00:03:17,639 Speaker 2: through at the moment, we will be pretty short term live. 69 00:03:17,720 --> 00:03:18,919 Speaker 2: So if you look at the S and P five 70 00:03:18,960 --> 00:03:20,960 Speaker 2: hundred index, the headline indicts in the US is an 71 00:03:20,960 --> 00:03:24,240 Speaker 2: indication it is not far below the level it was 72 00:03:24,760 --> 00:03:27,520 Speaker 2: prior to that Liberation Day tariff announcement. Its roughly two 73 00:03:27,520 --> 00:03:29,840 Speaker 2: percent below that level. So the risk is really that 74 00:03:30,440 --> 00:03:34,079 Speaker 2: Trump and his negotiation team cannot get the appropriate deals 75 00:03:34,120 --> 00:03:36,200 Speaker 2: done quickly enough and the consumers we'll have to will 76 00:03:36,240 --> 00:03:39,320 Speaker 2: continue to pull back and hence the outlet for corporatetings 77 00:03:39,360 --> 00:03:42,160 Speaker 2: continues to weekend. So hopefully a solution is found soon. 78 00:03:42,320 --> 00:03:45,080 Speaker 1: Brilliant stuff, Sam, Thank you as always appreciate it. Samra three. 79 00:03:45,080 --> 00:03:48,400 Speaker 1: We have Milfit Asset Management for more from hither Duplessy 80 00:03:48,440 --> 00:03:51,280 Speaker 1: Allen Drive. Listen live to news talks it'd be from 81 00:03:51,320 --> 00:03:54,960 Speaker 1: four pm weekdays, or follow the podcast on iHeartRadio.