Speaker 1: You're listening to a share these podcast, I'm interested.
Speaker 2: We mentioned the uncertainty that's been created in the world
Speaker 2: by the US presidential election. People trying to work out
Speaker 2: what's going on there. I mean, I know it's MAGA
Speaker 2: is the acronym, but it's almost like vuka volatile uncertain
Speaker 2: complex and always forget ambiguous. As the last one. Is
Speaker 2: that a pretty fair depiction of how investors are looking
Speaker 2: at what that election means for the prospects of growth
Speaker 2: and where rates and where exchange rates and things are
Speaker 2: going to go, and how that could affect our economy.
Speaker 1: Yeah, I mean the investors are scrambling around trying to
Speaker 1: figure out exactly what this means. Now. Clearly with the
Speaker 1: cryptocurrencies a rally doe very strongly. I mean, are just
Speaker 1: purely a speculative, as said anyway, But the speculation is
Speaker 1: that President Trump has been saying some nice things about it,
Speaker 1: and Elon Musk is in there, and he's got his
Speaker 1: doge coin I think it is if it still exists,
Speaker 1: and the department that he's heading there has got the
Speaker 1: same dog acronym. There are a first letters, so people
Speaker 1: are looking at that asset. There's a feeling that maybe
Speaker 1: inflation in the United States is going to be higher
Speaker 1: than would otherwise be the case because of the tariffs
Speaker 1: which are going on materials goods going into America. Already,
Speaker 1: firms in Australia are holding pre tariff increased sales by
Speaker 1: now before the price goes up for goods coming in
Speaker 1: from Mexico, from Canada, China, et cetera. Of course, what
Speaker 1: we don't know is how much of all of these
Speaker 1: threats for tariff changes are really just bargaining positions to
Speaker 1: get something else in exchange, either better trade access or
Speaker 1: something of relevance in the geopolitical sphere, for instance. We
Speaker 1: cannot know, and so this is going to be an
Speaker 1: environment of high uncertainty for the next two four years,
Speaker 1: et cetera. For New Zealand, the risks lie a bit
Speaker 1: on the downside here because we export minimally processed commodities
Speaker 1: to the rest of the world. A lot of the
Speaker 1: rest of the world has strong farm lobby groups who
Speaker 1: would like our stuff not to be going in there.
Speaker 1: And if we're looking at a world reverting more towards
Speaker 1: mercantilist policies of tariffs to somehow protect your domestic producers, manufacturers, farmers,
Speaker 1: et cetera. We do risk getting a bit lost in
Speaker 1: the wash there and having some negative outcomes. So the
Speaker 1: environment for ourselves has become riskier over for the next
Speaker 1: four years, and that may just constrain some investment in
Speaker 1: New Zealand in this period of time. The intrast rate
Speaker 1: implications difficult to figure out, but I'd say interest rates
Speaker 1: again not going as low as people are thinking because
Speaker 1: of some enhancement of the inflation risk.
Speaker 2: If we were trying to wrap it all up for
Speaker 2: how to make the best out of twenty twenty five, Tony.
Speaker 1: I think people anticipate some recovery in the economy, the
Speaker 1: labor markets improving. You asked earlier on Garth about the
Speaker 1: unemployment rate. You know, we're four point eight percent at
Speaker 1: the moment, go to five point five percent. I guess
Speaker 1: I'm not greatly concerned about that. We had six point
Speaker 1: seven percent back in about twenty twelve. I think eleven
Speaker 1: point one percent or so back in about nineteen ninety two.
Speaker 1: You know, we've seen far higher unemployment rates in the past.
Speaker 1: That will act as a constraint on the strength of
Speaker 1: recovery and consumers spending for a lot of twenty twenty five,
Speaker 1: so I think there's more rationalization to come in the
Speaker 1: retail hospitality sector. And because we're in sort of the
Speaker 1: last stages of the weakness for the economy, that doesn't
Speaker 1: mean things improve for businesses generally. As we see that
Speaker 1: the failures liquidations are picking up because some firms do
Speaker 1: not have the cash flow for the final three to
Speaker 1: six months of the period of weakness. It might the
Speaker 1: ird demanding tax payments, etc. We will see further weeding
Speaker 1: out across all sectors, but the scene is being set
Speaker 1: for better activity in our economy, mainly the second half
Speaker 1: of twenty twenty five and twenty twenty six rather than
Speaker 1: the first half of twenty twenty five. Conversely, for the
Speaker 1: biggest parts of the falls and interest rates, that'll be
Speaker 1: done and dusted, I think, quite frankly by the middle
Speaker 1: of twenty twenty five. Investing involves for risk you might
Speaker 1: lose the money you start with. We recommend talking to
Speaker 1: a licensed financial advisor.
Speaker 2: We also recommend reading product disclosure documents before deciding to invest.
Speaker 2: Everything you're about to see and hear is current at
Speaker 2: the time of recording.