1 00:00:00,080 --> 00:00:03,920 Speaker 1: Stephanie Bachelor, Milford Asset Management. Hey, Steph. Hi, hevery Steph. 2 00:00:03,920 --> 00:00:05,760 Speaker 1: We've had about a week of trading now since Trump 3 00:00:05,840 --> 00:00:07,960 Speaker 1: won the election. So what are you seeing a week 4 00:00:08,000 --> 00:00:10,320 Speaker 1: on in terms of themes positive or negative? Now that 5 00:00:10,360 --> 00:00:12,240 Speaker 1: the dusters may be settled a little bit. 6 00:00:13,200 --> 00:00:15,080 Speaker 2: Yeah, So there's been a lot going on, but it's 7 00:00:15,120 --> 00:00:18,800 Speaker 2: all really been a risk on attitude, driven by the 8 00:00:18,840 --> 00:00:22,160 Speaker 2: fact that most of Trump's policies are very pro growth. So, 9 00:00:22,280 --> 00:00:25,480 Speaker 2: for example, small and medium sized businesses, particularly in software, 10 00:00:25,520 --> 00:00:27,800 Speaker 2: have done very well and they're expected to see a 11 00:00:27,840 --> 00:00:31,000 Speaker 2: boost from his support of business policies, things like tax 12 00:00:31,040 --> 00:00:35,680 Speaker 2: cuts and less regulation. Another sector benefiting from that deregulation 13 00:00:35,800 --> 00:00:39,640 Speaker 2: theme is financials. They've done very well, also helped by 14 00:00:39,840 --> 00:00:43,040 Speaker 2: tax cuts and more supportive conditions for mergers and acquisitions. 15 00:00:44,240 --> 00:00:47,440 Speaker 2: Another one is consumer discretionary, so that's moved higher. It's 16 00:00:47,440 --> 00:00:50,319 Speaker 2: a sector that tends to do well as growth picks up, 17 00:00:50,800 --> 00:00:53,000 Speaker 2: and now that the overhang of the election has gone 18 00:00:53,000 --> 00:00:55,600 Speaker 2: and we're heading into the holiday season, it's expected that 19 00:00:55,640 --> 00:00:59,520 Speaker 2: consumers will start feeling good and spending again. But on 20 00:00:59,560 --> 00:01:02,320 Speaker 2: the flips, and of course, the consumer companies that are 21 00:01:02,320 --> 00:01:05,559 Speaker 2: exposed to tariffs so, for example, any companies that import 22 00:01:05,600 --> 00:01:08,520 Speaker 2: goods from China, they've been seeing a bit of pressure. 23 00:01:09,000 --> 00:01:13,280 Speaker 2: And another area that's seeing pressure is clean energy or renewables. So, 24 00:01:13,520 --> 00:01:17,039 Speaker 2: as you know, Trump supports traditional oil and gas and 25 00:01:17,120 --> 00:01:21,640 Speaker 2: so he's expected to enact supportive policy there while reversing 26 00:01:21,680 --> 00:01:23,440 Speaker 2: some of the more green friendly policies. 27 00:01:23,680 --> 00:01:24,920 Speaker 1: But how long is it going to take for him 28 00:01:24,959 --> 00:01:26,280 Speaker 1: to implement some of these policies. 29 00:01:27,480 --> 00:01:29,360 Speaker 2: Well, it's looking like it will be a red sweep, 30 00:01:29,440 --> 00:01:32,600 Speaker 2: so Republicans in both the Senate and the House, so 31 00:01:32,640 --> 00:01:34,480 Speaker 2: that will make it a lot easier for Trump to 32 00:01:34,560 --> 00:01:37,400 Speaker 2: enact as policies, but he still will need to convince 33 00:01:37,440 --> 00:01:40,360 Speaker 2: the more moderate members of his party and there are 34 00:01:40,400 --> 00:01:43,679 Speaker 2: still some checks and balances in place. The makeup of 35 00:01:43,680 --> 00:01:46,280 Speaker 2: his cabinet appointees will also be key, and he's going 36 00:01:46,319 --> 00:01:49,520 Speaker 2: through that process right now. But in terms of timing, 37 00:01:49,800 --> 00:01:51,760 Speaker 2: so it's thought that tax cuts might be the first 38 00:01:51,800 --> 00:01:54,680 Speaker 2: cab off the rank. He's hoping to see those flow 39 00:01:54,720 --> 00:01:57,680 Speaker 2: on growth impacts much more quickly than he did when 40 00:01:57,720 --> 00:02:01,240 Speaker 2: he implemented tax cuts back in his first term. Whereas 41 00:02:01,280 --> 00:02:04,920 Speaker 2: the more extreme policies, so the ones around tariffs and immigration, 42 00:02:05,400 --> 00:02:07,920 Speaker 2: they'll probably take a little bit longer to implement, and 43 00:02:08,200 --> 00:02:10,880 Speaker 2: he'll also want to be quite careful because those sorts 44 00:02:10,880 --> 00:02:13,560 Speaker 2: of policies are more inflationary, and he's not going to 45 00:02:13,560 --> 00:02:17,000 Speaker 2: want to derail his sort of overarching plan, which is 46 00:02:17,040 --> 00:02:19,400 Speaker 2: to stimulate growth and boost US businesses. 47 00:02:20,280 --> 00:02:22,600 Speaker 1: Tesla has appears to have been one of the big 48 00:02:22,639 --> 00:02:24,919 Speaker 1: winners post election. I mean, their shares we're up I 49 00:02:24,960 --> 00:02:27,640 Speaker 1: think something like forty percent over four days. Why has 50 00:02:27,680 --> 00:02:28,480 Speaker 1: it been so strong? 51 00:02:29,560 --> 00:02:32,280 Speaker 2: Yes, So a large part of it is that Elon 52 00:02:32,400 --> 00:02:36,000 Speaker 2: Musk has been one of Trump's most visible and outspoken supporters, 53 00:02:36,400 --> 00:02:38,920 Speaker 2: and Trump seems to view him as a trusted voice. 54 00:02:39,000 --> 00:02:40,720 Speaker 2: So he's apparently been spending a lot of time with 55 00:02:40,760 --> 00:02:43,200 Speaker 2: Trump since the election, you know, even weighing in on 56 00:02:43,400 --> 00:02:46,960 Speaker 2: staffing decisions for the next administration. And actually Trump has 57 00:02:47,080 --> 00:02:50,600 Speaker 2: just confirmed that Musk, along with one other will lead 58 00:02:50,639 --> 00:02:53,760 Speaker 2: a new Department of Government Efficiency, and so they'll be 59 00:02:53,800 --> 00:02:58,560 Speaker 2: tasked with cutting bureaucracy, wasteful spending, removing excess regulations, and 60 00:02:58,639 --> 00:03:02,800 Speaker 2: even restructuring federal agencies. So this is certainly going to 61 00:03:02,800 --> 00:03:06,160 Speaker 2: give him a lot of power. And Musk has presumably 62 00:03:06,200 --> 00:03:09,080 Speaker 2: also been hoping that Trump will make certain decisions that 63 00:03:09,160 --> 00:03:12,160 Speaker 2: will help his various businesses that he has. 64 00:03:12,720 --> 00:03:14,959 Speaker 1: Hence the rally in his stock price. All right, now, 65 00:03:15,320 --> 00:03:17,280 Speaker 1: the FED it cut the rates by a quarter of 66 00:03:17,320 --> 00:03:19,800 Speaker 1: a percent last week, which is pretty much expected. I 67 00:03:19,840 --> 00:03:22,480 Speaker 1: think we've had quite a few conversations now on the 68 00:03:22,480 --> 00:03:24,440 Speaker 1: show in the last few days where it's starting to 69 00:03:24,480 --> 00:03:28,240 Speaker 1: look like Trump's victory actually means the interest rate cuts 70 00:03:28,240 --> 00:03:30,240 Speaker 1: are not as strong as we would have thought. Would 71 00:03:30,280 --> 00:03:31,040 Speaker 1: that be what you think? 72 00:03:32,280 --> 00:03:36,640 Speaker 2: Yeah, that's fair. On the FED chair Jeroone Power was 73 00:03:36,680 --> 00:03:40,120 Speaker 2: specifically asked at on the press conference and sort of saying, 74 00:03:40,120 --> 00:03:42,200 Speaker 2: you know, can the election outcome impact the path for 75 00:03:42,480 --> 00:03:45,320 Speaker 2: the future interest rate cuts? And his response was that 76 00:03:45,440 --> 00:03:47,880 Speaker 2: for now, there's no immediate impact, given we don't know 77 00:03:47,880 --> 00:03:50,480 Speaker 2: the timing or substance of any new policies. So he said, 78 00:03:50,720 --> 00:03:53,000 Speaker 2: you know, we don't guess, we don't speculate, we don't assume. 79 00:03:53,120 --> 00:03:56,200 Speaker 2: So for now they do remain on a rate cutting path. 80 00:03:56,640 --> 00:03:59,720 Speaker 2: But obviously how Trump's policies end up impacting the economic 81 00:03:59,800 --> 00:04:02,760 Speaker 2: data further down the track will have an effect. And 82 00:04:02,800 --> 00:04:05,440 Speaker 2: so I mentioned a lot of his policies are inflationary, 83 00:04:05,680 --> 00:04:07,720 Speaker 2: and so that would reduce the number of rate cuts 84 00:04:07,760 --> 00:04:10,960 Speaker 2: that fed implements, and actually the market is already starting 85 00:04:10,960 --> 00:04:13,360 Speaker 2: to price that in. So it's pricing in that rate 86 00:04:13,400 --> 00:04:16,800 Speaker 2: cuts will potentially stop much earlier and at a rate 87 00:04:16,920 --> 00:04:20,560 Speaker 2: that's much higher versus what was expected you back in 88 00:04:21,320 --> 00:04:22,120 Speaker 2: a few months ago. 89 00:04:22,240 --> 00:04:25,320 Speaker 1: Yeah, Steph, thank you so much. Stepanie Bachelor, Milford Asset Management. 90 00:04:25,920 --> 00:04:29,080 Speaker 1: For more from Heather Duplessy Allen Drive, listen live to 91 00:04:29,200 --> 00:04:32,200 Speaker 1: News Talk sa'd be from four pm weekdays, or follow 92 00:04:32,240 --> 00:04:34,040 Speaker 1: the podcast on iHeartRadio.