1 00:00:01,000 --> 00:00:04,480 Speaker 1: You're listening to a share these podcast, I'm interested. 2 00:00:04,600 --> 00:00:08,560 Speaker 2: We mentioned the uncertainty that's been created in the world 3 00:00:09,080 --> 00:00:12,560 Speaker 2: by the US presidential election. People trying to work out 4 00:00:13,000 --> 00:00:15,640 Speaker 2: what's going on there. I mean, I know it's MAGA 5 00:00:15,760 --> 00:00:18,840 Speaker 2: is the acronym, but it's almost like vuka volatile uncertain 6 00:00:19,400 --> 00:00:23,079 Speaker 2: complex and always forget ambiguous. As the last one. Is 7 00:00:23,079 --> 00:00:26,520 Speaker 2: that a pretty fair depiction of how investors are looking 8 00:00:26,560 --> 00:00:29,560 Speaker 2: at what that election means for the prospects of growth 9 00:00:29,880 --> 00:00:32,839 Speaker 2: and where rates and where exchange rates and things are 10 00:00:32,880 --> 00:00:34,879 Speaker 2: going to go, and how that could affect our economy. 11 00:00:35,920 --> 00:00:38,159 Speaker 1: Yeah, I mean the investors are scrambling around trying to 12 00:00:38,159 --> 00:00:41,720 Speaker 1: figure out exactly what this means. Now. Clearly with the 13 00:00:41,760 --> 00:00:44,559 Speaker 1: cryptocurrencies a rally doe very strongly. I mean, are just 14 00:00:44,600 --> 00:00:48,400 Speaker 1: purely a speculative, as said anyway, But the speculation is 15 00:00:48,440 --> 00:00:51,040 Speaker 1: that President Trump has been saying some nice things about it, 16 00:00:51,080 --> 00:00:53,239 Speaker 1: and Elon Musk is in there, and he's got his 17 00:00:53,320 --> 00:00:55,720 Speaker 1: doge coin I think it is if it still exists, 18 00:00:55,720 --> 00:00:58,040 Speaker 1: and the department that he's heading there has got the 19 00:00:58,080 --> 00:01:03,880 Speaker 1: same dog acronym. There are a first letters, so people 20 00:01:03,920 --> 00:01:06,920 Speaker 1: are looking at that asset. There's a feeling that maybe 21 00:01:07,240 --> 00:01:09,679 Speaker 1: inflation in the United States is going to be higher 22 00:01:09,680 --> 00:01:11,880 Speaker 1: than would otherwise be the case because of the tariffs 23 00:01:11,880 --> 00:01:16,720 Speaker 1: which are going on materials goods going into America. Already, 24 00:01:16,760 --> 00:01:20,960 Speaker 1: firms in Australia are holding pre tariff increased sales by 25 00:01:21,040 --> 00:01:23,440 Speaker 1: now before the price goes up for goods coming in 26 00:01:23,520 --> 00:01:27,440 Speaker 1: from Mexico, from Canada, China, et cetera. Of course, what 27 00:01:27,480 --> 00:01:29,360 Speaker 1: we don't know is how much of all of these 28 00:01:29,400 --> 00:01:33,039 Speaker 1: threats for tariff changes are really just bargaining positions to 29 00:01:33,120 --> 00:01:37,319 Speaker 1: get something else in exchange, either better trade access or 30 00:01:37,360 --> 00:01:41,640 Speaker 1: something of relevance in the geopolitical sphere, for instance. We 31 00:01:42,360 --> 00:01:45,800 Speaker 1: cannot know, and so this is going to be an 32 00:01:45,880 --> 00:01:49,680 Speaker 1: environment of high uncertainty for the next two four years, 33 00:01:49,720 --> 00:01:53,040 Speaker 1: et cetera. For New Zealand, the risks lie a bit 34 00:01:53,120 --> 00:01:58,280 Speaker 1: on the downside here because we export minimally processed commodities 35 00:01:58,320 --> 00:02:00,280 Speaker 1: to the rest of the world. A lot of the 36 00:02:00,320 --> 00:02:03,600 Speaker 1: rest of the world has strong farm lobby groups who 37 00:02:03,640 --> 00:02:06,280 Speaker 1: would like our stuff not to be going in there. 38 00:02:06,560 --> 00:02:09,880 Speaker 1: And if we're looking at a world reverting more towards 39 00:02:10,000 --> 00:02:16,320 Speaker 1: mercantilist policies of tariffs to somehow protect your domestic producers, manufacturers, farmers, 40 00:02:16,320 --> 00:02:19,640 Speaker 1: et cetera. We do risk getting a bit lost in 41 00:02:19,639 --> 00:02:22,360 Speaker 1: the wash there and having some negative outcomes. So the 42 00:02:22,480 --> 00:02:26,240 Speaker 1: environment for ourselves has become riskier over for the next 43 00:02:26,240 --> 00:02:29,200 Speaker 1: four years, and that may just constrain some investment in 44 00:02:29,200 --> 00:02:31,440 Speaker 1: New Zealand in this period of time. The intrast rate 45 00:02:31,480 --> 00:02:34,960 Speaker 1: implications difficult to figure out, but I'd say interest rates 46 00:02:34,960 --> 00:02:37,760 Speaker 1: again not going as low as people are thinking because 47 00:02:37,760 --> 00:02:40,040 Speaker 1: of some enhancement of the inflation risk. 48 00:02:40,639 --> 00:02:42,160 Speaker 2: If we were trying to wrap it all up for 49 00:02:42,200 --> 00:02:44,679 Speaker 2: how to make the best out of twenty twenty five, Tony. 50 00:02:44,960 --> 00:02:48,760 Speaker 1: I think people anticipate some recovery in the economy, the 51 00:02:48,880 --> 00:02:52,200 Speaker 1: labor markets improving. You asked earlier on Garth about the 52 00:02:52,240 --> 00:02:54,400 Speaker 1: unemployment rate. You know, we're four point eight percent at 53 00:02:54,400 --> 00:02:57,600 Speaker 1: the moment, go to five point five percent. I guess 54 00:02:57,639 --> 00:03:00,399 Speaker 1: I'm not greatly concerned about that. We had six point 55 00:03:00,440 --> 00:03:03,560 Speaker 1: seven percent back in about twenty twelve. I think eleven 56 00:03:03,600 --> 00:03:06,519 Speaker 1: point one percent or so back in about nineteen ninety two. 57 00:03:06,560 --> 00:03:10,040 Speaker 1: You know, we've seen far higher unemployment rates in the past. 58 00:03:10,200 --> 00:03:12,640 Speaker 1: That will act as a constraint on the strength of 59 00:03:12,720 --> 00:03:16,400 Speaker 1: recovery and consumers spending for a lot of twenty twenty five, 60 00:03:16,480 --> 00:03:20,520 Speaker 1: so I think there's more rationalization to come in the 61 00:03:20,560 --> 00:03:24,720 Speaker 1: retail hospitality sector. And because we're in sort of the 62 00:03:24,800 --> 00:03:28,120 Speaker 1: last stages of the weakness for the economy, that doesn't 63 00:03:28,160 --> 00:03:31,040 Speaker 1: mean things improve for businesses generally. As we see that 64 00:03:31,240 --> 00:03:35,120 Speaker 1: the failures liquidations are picking up because some firms do 65 00:03:35,200 --> 00:03:37,520 Speaker 1: not have the cash flow for the final three to 66 00:03:37,600 --> 00:03:39,600 Speaker 1: six months of the period of weakness. It might the 67 00:03:39,600 --> 00:03:44,440 Speaker 1: ird demanding tax payments, etc. We will see further weeding 68 00:03:44,480 --> 00:03:47,800 Speaker 1: out across all sectors, but the scene is being set 69 00:03:47,880 --> 00:03:51,520 Speaker 1: for better activity in our economy, mainly the second half 70 00:03:51,560 --> 00:03:54,400 Speaker 1: of twenty twenty five and twenty twenty six rather than 71 00:03:54,440 --> 00:03:57,720 Speaker 1: the first half of twenty twenty five. Conversely, for the 72 00:03:57,760 --> 00:04:00,800 Speaker 1: biggest parts of the falls and interest rates, that'll be 73 00:04:00,880 --> 00:04:03,440 Speaker 1: done and dusted, I think, quite frankly by the middle 74 00:04:03,600 --> 00:04:06,720 Speaker 1: of twenty twenty five. Investing involves for risk you might 75 00:04:06,760 --> 00:04:09,160 Speaker 1: lose the money you start with. We recommend talking to 76 00:04:09,200 --> 00:04:10,680 Speaker 1: a licensed financial advisor. 77 00:04:11,400 --> 00:04:15,240 Speaker 2: We also recommend reading product disclosure documents before deciding to invest. 78 00:04:15,480 --> 00:04:17,880 Speaker 2: Everything you're about to see and hear is current at 79 00:04:17,880 --> 00:04:18,760 Speaker 2: the time of recording.