1 00:00:03,160 --> 00:00:06,240 Speaker 1: Kyonda, and welcome to Shared Lunch, brought to you by Chase's. 2 00:00:06,400 --> 00:00:07,520 Speaker 2: I'm Helen Madison. 3 00:00:08,039 --> 00:00:11,559 Speaker 1: Today we take a pulse check on the economy. I'll 4 00:00:11,600 --> 00:00:15,000 Speaker 1: be speaking with Infametrics principal economist Brad Olsen. 5 00:00:15,160 --> 00:00:18,919 Speaker 3: The worry now a little bit more is that households, businesses, 6 00:00:18,960 --> 00:00:22,200 Speaker 3: and professional forecasters are all now thinking that there is 7 00:00:22,239 --> 00:00:23,599 Speaker 3: a bit more inflation to come. 8 00:00:23,680 --> 00:00:25,480 Speaker 2: So what does this mean for investors? 9 00:00:25,680 --> 00:00:28,200 Speaker 3: It's only a temporary pause that we're seeing with these tariffs, 10 00:00:28,360 --> 00:00:30,720 Speaker 3: and that some of the results could still be pretty damaging. 11 00:00:30,840 --> 00:00:32,200 Speaker 2: What should you be looking out for? 12 00:00:32,520 --> 00:00:34,680 Speaker 3: Everyone's trying to figure out what the sweet spot is 13 00:00:34,720 --> 00:00:37,000 Speaker 3: and sort of how to balance what is a lot 14 00:00:37,000 --> 00:00:38,519 Speaker 3: of uncertainty. 15 00:00:38,000 --> 00:00:39,000 Speaker 2: And what should you ignore. 16 00:00:39,080 --> 00:00:40,920 Speaker 3: It's been the sort of recognition from a lot of 17 00:00:40,920 --> 00:00:44,680 Speaker 3: people that, hey, sometimes that the markets have been over 18 00:00:44,800 --> 00:00:47,760 Speaker 3: correcting or a bit overly worried about things and then 19 00:00:47,800 --> 00:00:48,919 Speaker 3: seem to come back the other way. 20 00:00:49,000 --> 00:00:51,840 Speaker 1: Before we get started, here's some important information. 21 00:00:52,320 --> 00:00:54,920 Speaker 4: Investing involves the risk you might lose the money you 22 00:00:54,960 --> 00:00:58,240 Speaker 4: start with. We recommend talking to a licensed financial advisor. 23 00:00:58,960 --> 00:01:02,800 Speaker 4: We also recommend eating product disclosure documents before deciding to invest. 24 00:01:03,040 --> 00:01:05,440 Speaker 4: Everything you're about to see and here is current at 25 00:01:05,440 --> 00:01:06,320 Speaker 4: the time of recording. 26 00:01:06,480 --> 00:01:09,000 Speaker 2: Welcome Brad, great to see you again. It's been a while. 27 00:01:09,240 --> 00:01:11,600 Speaker 3: It has been a while. In goodness, what a lot 28 00:01:11,640 --> 00:01:14,800 Speaker 3: has happened in the economy in that intervening period. Seems 29 00:01:14,800 --> 00:01:16,600 Speaker 3: like we've gone from the brink of World War III 30 00:01:16,760 --> 00:01:20,280 Speaker 3: to ceasefires, to tariffs to everything else. I mean, it's 31 00:01:20,319 --> 00:01:21,920 Speaker 3: been a pretty wild ride. 32 00:01:21,720 --> 00:01:22,200 Speaker 2: It has. 33 00:01:22,920 --> 00:01:27,039 Speaker 1: Let's start here at home and think about our economy 34 00:01:27,280 --> 00:01:31,360 Speaker 1: and growth. It appears that we are sort of stepping 35 00:01:31,440 --> 00:01:34,120 Speaker 1: up a little bit after all the kind of recession talk, 36 00:01:34,360 --> 00:01:37,520 Speaker 1: et cetera, et cetera. However, it appears to me that 37 00:01:37,560 --> 00:01:40,760 Speaker 1: the only real growth we're seeing is in the rural sector, 38 00:01:41,080 --> 00:01:44,520 Speaker 1: with milk prices, with beef for burgers to the US, 39 00:01:44,600 --> 00:01:48,720 Speaker 1: which is good for exports, and then that yellow gold butter. 40 00:01:49,640 --> 00:01:52,000 Speaker 3: You're definitely right, I mean, the rural sector is definitely 41 00:01:52,040 --> 00:01:55,080 Speaker 3: powering the early stages of the economic recovery. You look 42 00:01:55,080 --> 00:01:57,400 Speaker 3: at the likes of the trade numbers we've got coming through, 43 00:01:57,400 --> 00:02:00,760 Speaker 3: commodity prices all in a better place. I think it's 44 00:02:00,800 --> 00:02:02,920 Speaker 3: true as well when you look across the world. That's 45 00:02:02,960 --> 00:02:05,800 Speaker 3: also partly a supply story. From other providers. So you 46 00:02:05,840 --> 00:02:08,679 Speaker 3: look at the likes of butter, milk, other dairy products, 47 00:02:08,800 --> 00:02:12,440 Speaker 3: New Zealand productions actually up, which is unusual when prices 48 00:02:12,480 --> 00:02:14,720 Speaker 3: are sort of at the levels that they are. But 49 00:02:14,760 --> 00:02:16,760 Speaker 3: it's production out of the likes of Europe and the 50 00:02:16,760 --> 00:02:19,680 Speaker 3: Americas that haven't been doing quite as well. New Zealand's 51 00:02:19,680 --> 00:02:21,720 Speaker 3: able to provide everyone else wants to pay for it. 52 00:02:21,760 --> 00:02:24,120 Speaker 3: We've been doing not too bad. You look at also 53 00:02:24,160 --> 00:02:26,360 Speaker 3: the numbers though, so the milk payout that's come through 54 00:02:26,440 --> 00:02:30,119 Speaker 3: has generated over nineteen billion of money that'll be going 55 00:02:30,160 --> 00:02:33,040 Speaker 3: back into the primary sector. What's interesting is in the 56 00:02:33,080 --> 00:02:35,519 Speaker 3: season just finished, you're talking something like four point five 57 00:02:35,680 --> 00:02:38,519 Speaker 3: four point six billion dollars more than the season before. 58 00:02:39,160 --> 00:02:42,280 Speaker 3: That's more money coming through than the entirety of the 59 00:02:42,280 --> 00:02:44,880 Speaker 3: lower interest rates that households be paying this year. So 60 00:02:44,919 --> 00:02:47,359 Speaker 3: the primary sector is definitely a very critical part at 61 00:02:47,400 --> 00:02:50,040 Speaker 3: the start. The question is does it continue. Because you 62 00:02:50,120 --> 00:02:52,360 Speaker 3: do start to see a few of those numbers that 63 00:02:52,480 --> 00:02:55,960 Speaker 3: likes the latest couple of global dairy trade options, they've 64 00:02:56,000 --> 00:02:58,160 Speaker 3: fallen back a touch and I think that does just 65 00:02:58,200 --> 00:03:00,800 Speaker 3: suggest again things are all right for the minute, but 66 00:03:00,840 --> 00:03:02,880 Speaker 3: a bit of a question going forward in terms of 67 00:03:02,919 --> 00:03:05,359 Speaker 3: how strong it will be. Fonterra has also made it 68 00:03:05,440 --> 00:03:07,600 Speaker 3: quite clear that they think there's effectively a bit of 69 00:03:07,600 --> 00:03:10,760 Speaker 3: a downside risk. They've come out that said, you know, 70 00:03:10,840 --> 00:03:13,440 Speaker 3: milk prices at ten bucks for the season ahead, but 71 00:03:13,480 --> 00:03:16,200 Speaker 3: it could range anywhere between eleven and eight. That's a 72 00:03:16,240 --> 00:03:19,079 Speaker 3: three dollar range, the biggest they've ever provided, and more 73 00:03:19,120 --> 00:03:21,200 Speaker 3: on the downside than there is the upside. I guess 74 00:03:21,200 --> 00:03:23,120 Speaker 3: that's almost the tone for the second half of this 75 00:03:23,200 --> 00:03:25,720 Speaker 3: year is Yep, there's a recovery coming through, but it's 76 00:03:25,760 --> 00:03:27,560 Speaker 3: a very cautious and slow one. 77 00:03:27,919 --> 00:03:30,960 Speaker 1: Is it only the rural sector that are actually going 78 00:03:31,040 --> 00:03:33,440 Speaker 1: leaps and bounds or are other do you see other 79 00:03:33,480 --> 00:03:35,560 Speaker 1: sort of green shoots? Which is a bit of a 80 00:03:35,600 --> 00:03:38,520 Speaker 1: hackneyed phrase at the moment, but I'll use it anyway. 81 00:03:38,640 --> 00:03:40,680 Speaker 3: First three months of this year looked all right. You 82 00:03:40,720 --> 00:03:44,600 Speaker 3: saw economic activity that expanded actually quite a bit apecent, 83 00:03:45,120 --> 00:03:47,800 Speaker 3: you know, some of the biggest increase in quarterly growth 84 00:03:47,840 --> 00:03:50,360 Speaker 3: that we've seen amongst a lot of our international partners. 85 00:03:50,400 --> 00:03:52,840 Speaker 3: I think the challenges after that, once you start to 86 00:03:52,840 --> 00:03:54,880 Speaker 3: get into April, you have the lights of the tariff 87 00:03:54,920 --> 00:03:57,839 Speaker 3: slow down and everything else that's come through you've seen 88 00:03:57,880 --> 00:04:00,280 Speaker 3: some of those indicators that have fallen back. At the 89 00:04:00,280 --> 00:04:02,200 Speaker 3: start of this year, there were a few parts the 90 00:04:02,320 --> 00:04:05,520 Speaker 3: likes of there was some better manufacturing numbers that were 91 00:04:05,520 --> 00:04:09,160 Speaker 3: coming forward. You also saw better professional services activity, so 92 00:04:09,200 --> 00:04:12,440 Speaker 3: you're getting you know, business services going a bit more again. 93 00:04:12,480 --> 00:04:14,600 Speaker 3: Both of those look like they've fallen back of touch 94 00:04:14,640 --> 00:04:18,279 Speaker 3: as we've moved through into the mid year period, manufacturing 95 00:04:18,440 --> 00:04:22,640 Speaker 3: and services and disease falling back into sort of contractionary territory. 96 00:04:22,720 --> 00:04:25,400 Speaker 3: So just that feeling of yes, there's a recovery, but 97 00:04:25,440 --> 00:04:27,320 Speaker 3: it's a bit more stop start. It's a bit more 98 00:04:27,960 --> 00:04:30,560 Speaker 3: slow to get going than we might have first expected. 99 00:04:30,600 --> 00:04:32,719 Speaker 3: And I feel like a lot of people ask me 100 00:04:32,800 --> 00:04:35,480 Speaker 3: these days, you know, economist said survived till twenty five 101 00:04:35,560 --> 00:04:37,360 Speaker 3: and I sort of have to respond and say, look, 102 00:04:37,400 --> 00:04:39,240 Speaker 3: we've got into the thirty first of December for that 103 00:04:39,360 --> 00:04:41,719 Speaker 3: come true. But it is going to be a slow 104 00:04:41,760 --> 00:04:43,039 Speaker 3: slog I think for this year. 105 00:04:43,920 --> 00:04:46,320 Speaker 1: Yeah, it feels like one step forward to back to 106 00:04:46,400 --> 00:04:49,599 Speaker 1: some degree. I mean, the cost of food seems to 107 00:04:49,680 --> 00:04:53,320 Speaker 1: still keep rising, fuel keeps rising, and whether that's because 108 00:04:53,320 --> 00:04:54,479 Speaker 1: of the conflicts and the like. 109 00:04:55,520 --> 00:04:57,640 Speaker 2: Yeah, I mean, where are we at with inflation. 110 00:04:58,080 --> 00:05:01,480 Speaker 3: Inflation's uncomfortable at the moment, and like probably more uncomfortable 111 00:05:01,480 --> 00:05:03,920 Speaker 3: than we would have first been expecting some people in 112 00:05:03,920 --> 00:05:07,400 Speaker 3: our forecasting that headline inflation might go through three percent 113 00:05:07,520 --> 00:05:09,920 Speaker 3: towards the second half of this year. Now, that of course, 114 00:05:09,920 --> 00:05:11,920 Speaker 3: would be the first time that it had breached that 115 00:05:12,000 --> 00:05:15,200 Speaker 3: three percent high point of the highest that the Reserve 116 00:05:15,279 --> 00:05:18,120 Speaker 3: Bank generally wants it to go. Now, yes, there's an 117 00:05:18,120 --> 00:05:20,839 Speaker 3: expectation a short term, but there does just seem to 118 00:05:20,839 --> 00:05:24,279 Speaker 3: be enough sort of remaining inflationary pressure to make us 119 00:05:24,320 --> 00:05:27,160 Speaker 3: a little bit worried. And some people often ask, you know, 120 00:05:27,400 --> 00:05:29,279 Speaker 3: how do you have this when you've got the economy 121 00:05:29,279 --> 00:05:32,000 Speaker 3: that's in such a tough zone. You know, it's not 122 00:05:32,040 --> 00:05:35,279 Speaker 3: really a conducive environment right to raise prices, but you're 123 00:05:35,279 --> 00:05:37,359 Speaker 3: still seeing them. And I do wonder if we're starting 124 00:05:37,440 --> 00:05:40,400 Speaker 3: to see almost a twenty twenties version of stagflation. Now 125 00:05:40,440 --> 00:05:42,640 Speaker 3: that's a big word to use. I'm not saying we're 126 00:05:42,640 --> 00:05:45,320 Speaker 3: going back to the nineteen seventies. It's a very different environment, 127 00:05:45,520 --> 00:05:47,240 Speaker 3: but you do just get the feeling that there's a 128 00:05:47,240 --> 00:05:51,200 Speaker 3: little bit more of that inflationary undercurrent sitting around food 129 00:05:51,240 --> 00:05:55,320 Speaker 3: price inflation's now reaccelerated to four point four percent. What's 130 00:05:55,360 --> 00:05:58,039 Speaker 3: interesting is that last time it got sort of to 131 00:05:58,120 --> 00:06:00,359 Speaker 3: this high level, and I think you know now at 132 00:06:00,360 --> 00:06:02,679 Speaker 3: the highest food price inflation since the end of twenty 133 00:06:02,680 --> 00:06:05,560 Speaker 3: twenty three. The difference is at that point it was very, 134 00:06:05,640 --> 00:06:09,080 Speaker 3: very broad based, lots of stuff increasing in price all 135 00:06:09,080 --> 00:06:11,760 Speaker 3: the time, whereas now it's a bit more concentrated to 136 00:06:11,800 --> 00:06:14,640 Speaker 3: a more limited set of items. But the big increases. 137 00:06:14,880 --> 00:06:16,440 Speaker 3: You look at the likes of butter up sort of 138 00:06:16,480 --> 00:06:19,839 Speaker 3: fifty sixty percent the last year, mints and beef prices 139 00:06:19,920 --> 00:06:23,280 Speaker 3: higher again because those international prices. You look at the 140 00:06:23,360 --> 00:06:27,279 Speaker 3: likes of coffee, chocolate, olive oil, all of those increasing 141 00:06:27,600 --> 00:06:31,000 Speaker 3: all the But it's also it's not everything, but it's 142 00:06:31,000 --> 00:06:33,640 Speaker 3: the stuff that you notice so so much more, and 143 00:06:33,720 --> 00:06:36,200 Speaker 3: I think that's probably the difference. You've also got the 144 00:06:36,279 --> 00:06:39,159 Speaker 3: likes of oil prices, yes, fluctuating quite a lot this year. 145 00:06:39,400 --> 00:06:41,080 Speaker 3: But the real one, I think, and the kicker for 146 00:06:41,120 --> 00:06:43,960 Speaker 3: households at the minute, is energy prices. You look at 147 00:06:44,000 --> 00:06:47,520 Speaker 3: electricity and gas now rising at the fastest they've been 148 00:06:47,560 --> 00:06:50,000 Speaker 3: going in over ten years, and again it's just that 149 00:06:50,160 --> 00:06:53,000 Speaker 3: uncomfortable piece where from a household perspective. You've got food 150 00:06:53,000 --> 00:06:55,719 Speaker 3: prices going up, you've got energy costs going up. And 151 00:06:55,720 --> 00:06:59,480 Speaker 3: the worry now a little bit more, is that households, businesses, 152 00:06:59,520 --> 00:07:02,880 Speaker 3: and prefertional forecasters all now thinking that there is a 153 00:07:02,880 --> 00:07:06,520 Speaker 3: bit more inflation to come. Inflation expectations have increased, not 154 00:07:06,640 --> 00:07:09,960 Speaker 3: massively again, not to red alert danger zones, but just 155 00:07:10,000 --> 00:07:12,520 Speaker 3: to enough of a position where again the worry starts 156 00:07:12,560 --> 00:07:14,080 Speaker 3: to creep in, sort of a bit of a pit 157 00:07:14,120 --> 00:07:16,920 Speaker 3: in the bottom of your stomach around inflation sitting by, 158 00:07:17,200 --> 00:07:19,040 Speaker 3: and I think that's why the reserve banks in this 159 00:07:19,160 --> 00:07:22,960 Speaker 3: really challenging position where they're going the economy doesn't look great, 160 00:07:23,080 --> 00:07:25,120 Speaker 3: and I worry again. You look back to where we've 161 00:07:25,120 --> 00:07:27,400 Speaker 3: been a couple of years back, the likes of inflation 162 00:07:27,520 --> 00:07:29,560 Speaker 3: when it started to get bad. It was at a 163 00:07:29,600 --> 00:07:32,520 Speaker 3: time when we thought the economy wouldn't allow inflation to 164 00:07:32,680 --> 00:07:35,520 Speaker 3: pass through, and we sort of almost conveniently at the time, 165 00:07:35,640 --> 00:07:39,920 Speaker 3: ignored actual inflation starting to creep up again. Not fully 166 00:07:39,960 --> 00:07:42,040 Speaker 3: back in the same position, but it seems a little 167 00:07:42,080 --> 00:07:44,200 Speaker 3: bit too similar to completely ignore it. 168 00:07:44,760 --> 00:07:47,480 Speaker 1: That's a good segue to the Reserve bank. By the 169 00:07:47,520 --> 00:07:50,880 Speaker 1: time this episode goes to air. They will have actually 170 00:07:51,640 --> 00:07:54,200 Speaker 1: the Reserve Bank will have actually announced. 171 00:07:53,720 --> 00:07:54,960 Speaker 2: What the official cash rate is. 172 00:07:55,480 --> 00:07:58,560 Speaker 1: Everybody's been hoping it would be another reduction, but it 173 00:07:58,560 --> 00:08:01,600 Speaker 1: does feel like consensus is they will hold. 174 00:08:02,000 --> 00:08:05,720 Speaker 3: What was your prediction, We're expecting a hold as well, 175 00:08:06,080 --> 00:08:07,880 Speaker 3: to keep their official cash rate where it is at 176 00:08:07,880 --> 00:08:10,600 Speaker 3: three point twenty five percent, but also expecting that there 177 00:08:10,600 --> 00:08:13,560 Speaker 3: could be a further cut at some point later in 178 00:08:13,560 --> 00:08:16,080 Speaker 3: the year. And I guess that's where again that nervousness 179 00:08:16,080 --> 00:08:19,000 Speaker 3: creeps in that it's a little bit hard to justify 180 00:08:19,160 --> 00:08:22,560 Speaker 3: moving right this moment. You know, there's still the clarification 181 00:08:22,640 --> 00:08:25,160 Speaker 3: of what happens with the tariffs around the world, still 182 00:08:25,160 --> 00:08:26,960 Speaker 3: a bit more data to come through when it comes 183 00:08:26,960 --> 00:08:30,000 Speaker 3: to inflation and similar and so I think again that 184 00:08:30,080 --> 00:08:31,960 Speaker 3: sort of question of where does the Reserve Bank go 185 00:08:32,120 --> 00:08:34,560 Speaker 3: next is probably the bigger one, and they'll have a 186 00:08:34,559 --> 00:08:37,319 Speaker 3: better opportunity in August to be able to explain not 187 00:08:37,360 --> 00:08:40,160 Speaker 3: only the most recent decision, but also what that future 188 00:08:40,200 --> 00:08:43,240 Speaker 3: pathway looks like, because that's what everyone's concentrated on. Is 189 00:08:43,280 --> 00:08:44,959 Speaker 3: there a lot left to go? Are we close to 190 00:08:45,000 --> 00:08:47,280 Speaker 3: the end? Have we already seen the end? Quite a 191 00:08:47,320 --> 00:08:49,080 Speaker 3: lot of options going forward. 192 00:08:49,320 --> 00:08:52,240 Speaker 1: Yeah, I suppose they're sending out letters at the moment. 193 00:08:52,280 --> 00:08:57,440 Speaker 1: According to Trump's officials and to you know, lots of 194 00:08:57,480 --> 00:09:00,480 Speaker 1: countries that actually probably have quite high tarifs, they do 195 00:09:00,520 --> 00:09:03,840 Speaker 1: something quite quickly, So you're right, we probably might have 196 00:09:03,920 --> 00:09:05,600 Speaker 1: to wait until that happens. 197 00:09:05,720 --> 00:09:07,640 Speaker 3: And I mean you look at the market reaction as well. 198 00:09:07,720 --> 00:09:10,280 Speaker 3: I mean, when the tariffs originally came through at the 199 00:09:10,280 --> 00:09:12,079 Speaker 3: start of April like that, that was a bit of 200 00:09:12,080 --> 00:09:14,520 Speaker 3: a mountdown on the markets. What's I think interesting is 201 00:09:14,559 --> 00:09:17,160 Speaker 3: that even in recent times you've seen this sort of 202 00:09:17,160 --> 00:09:20,960 Speaker 3: the markets actually continue to push higher on some economic news, 203 00:09:21,160 --> 00:09:24,640 Speaker 3: but almost conveniently forgetting that there's it's only a temporary 204 00:09:24,640 --> 00:09:26,840 Speaker 3: pause that we're seeing with these tariffs, and that some 205 00:09:26,880 --> 00:09:29,240 Speaker 3: of the results could still be pretty damaging. I mean, 206 00:09:29,280 --> 00:09:32,840 Speaker 3: recently we've seen an agreement with between the US and Vietnam. 207 00:09:33,120 --> 00:09:35,400 Speaker 3: They came out and said, look, twenty percent tariff. Now 208 00:09:35,400 --> 00:09:37,840 Speaker 3: that's lower than the forty six I think percent they 209 00:09:37,880 --> 00:09:40,880 Speaker 3: started with. Twenty percent tariff on everything coming out of 210 00:09:40,960 --> 00:09:43,439 Speaker 3: Vietnam is still quite a lot though, and into the 211 00:09:43,520 --> 00:09:46,000 Speaker 3: US market becomes quite important because that's where a lot 212 00:09:46,000 --> 00:09:50,040 Speaker 3: more manufacturing is based. Anything that transits through Vietnam sitting 213 00:09:50,040 --> 00:09:53,520 Speaker 3: at forty percent tariffs and the US gets completely you know, 214 00:09:54,160 --> 00:09:57,240 Speaker 3: free access into the market. Like that's still pretty bad 215 00:09:57,360 --> 00:10:00,640 Speaker 3: for economic expectations going forward. So I'm a little bit 216 00:10:00,679 --> 00:10:03,600 Speaker 3: worried again that people are sort of quite happily blase 217 00:10:03,800 --> 00:10:06,520 Speaker 3: because it's been such a tough ride knowing what's coming next. 218 00:10:06,760 --> 00:10:10,640 Speaker 3: But if that's any indication again economic growth globally will slow. 219 00:10:10,760 --> 00:10:13,160 Speaker 3: If you're seeing those levels of teriffs. They might be 220 00:10:13,160 --> 00:10:15,240 Speaker 3: better than what was announced in April, but they're not 221 00:10:15,280 --> 00:10:17,280 Speaker 3: good for global economic growth. 222 00:10:17,480 --> 00:10:19,720 Speaker 1: And that's even with China and I think the UK 223 00:10:19,960 --> 00:10:23,280 Speaker 1: sort of negotiating, and we'll obviously see other negotiations in 224 00:10:23,320 --> 00:10:26,120 Speaker 1: the next month or so. But yeah, it feels still 225 00:10:26,280 --> 00:10:27,160 Speaker 1: somewhat bleak. 226 00:10:27,040 --> 00:10:27,440 Speaker 2: Doesn't it. 227 00:10:27,520 --> 00:10:29,559 Speaker 3: Yeah, very challenging, and I mean it's one of those 228 00:10:29,600 --> 00:10:31,439 Speaker 3: things for New Zealand, of course, we rely on the 229 00:10:31,440 --> 00:10:34,520 Speaker 3: global economic environment to trade. At the moment, I think 230 00:10:34,520 --> 00:10:37,319 Speaker 3: we're actually probably not too badly placed. People were still 231 00:10:37,320 --> 00:10:39,960 Speaker 3: buying our food stuff, so we're selling to consumers a 232 00:10:39,960 --> 00:10:42,679 Speaker 3: lot more if we were selling sort of semi manufactured 233 00:10:42,720 --> 00:10:45,040 Speaker 3: goods or sort of intermediate goods that went into the 234 00:10:45,040 --> 00:10:47,920 Speaker 3: production process. If we were selling cars, you'd be in 235 00:10:47,960 --> 00:10:50,200 Speaker 3: a very, very tough spot. And having been in Korea 236 00:10:50,240 --> 00:10:52,520 Speaker 3: earlier this year, when again they are a lot more 237 00:10:52,559 --> 00:10:54,880 Speaker 3: wedded to not only the US economy, but to some 238 00:10:54,960 --> 00:10:57,800 Speaker 3: of that more manufactured stuff, they were definitely sort of 239 00:10:57,800 --> 00:11:00,439 Speaker 3: feeling the pinch a whole lot quicker than we were now. 240 00:11:00,520 --> 00:11:04,640 Speaker 1: Interest rates also always have a bearing on house prices, 241 00:11:06,240 --> 00:11:08,120 Speaker 1: so the rate cuts. 242 00:11:07,800 --> 00:11:10,560 Speaker 2: That we've had, we've had several I think it's two. 243 00:11:10,559 --> 00:11:15,160 Speaker 1: Hundred and twenty five basis points over the last few months. However, 244 00:11:15,280 --> 00:11:18,520 Speaker 1: it doesn't appear that the heat has come back into 245 00:11:18,600 --> 00:11:19,720 Speaker 1: that housing market. 246 00:11:20,040 --> 00:11:22,400 Speaker 3: No, not at all. And despite the fact that you 247 00:11:22,400 --> 00:11:25,360 Speaker 3: know you've got some fairly attractive interest rates on offer, 248 00:11:25,679 --> 00:11:28,160 Speaker 3: you just haven't seen that same level of buyer demand 249 00:11:28,280 --> 00:11:30,640 Speaker 3: spark up to the same degree. At the same time, 250 00:11:30,679 --> 00:11:33,160 Speaker 3: you've got a huge number of houses that are still 251 00:11:33,200 --> 00:11:35,480 Speaker 3: on the market. I think there's a few elements that. 252 00:11:35,520 --> 00:11:37,560 Speaker 3: One is the fact that there is literally half a 253 00:11:37,640 --> 00:11:40,760 Speaker 3: year's worth of normal sales setting available on the market. 254 00:11:41,000 --> 00:11:43,400 Speaker 3: Takes a while to clear that backlog. You've also got 255 00:11:43,400 --> 00:11:45,400 Speaker 3: a lot of new builds that have only sort of 256 00:11:45,440 --> 00:11:49,439 Speaker 3: recently been finished up, a lot of selling activity potential 257 00:11:49,520 --> 00:11:52,200 Speaker 3: in the market, not as many buyers coming through. You've 258 00:11:52,240 --> 00:11:54,560 Speaker 3: seen the likes of net migration pull back, so your 259 00:11:54,600 --> 00:11:58,160 Speaker 3: population growth has slowed. But I think particularly again, it's 260 00:11:58,160 --> 00:11:59,640 Speaker 3: interesting sort of when you look at some of the 261 00:11:59,640 --> 00:12:03,520 Speaker 3: indicat after that tariff announcement in April, there did seem 262 00:12:03,559 --> 00:12:06,880 Speaker 3: to be a real feeling amongst potential buyers that they 263 00:12:06,920 --> 00:12:09,440 Speaker 3: actually weren't quite as keen to clamber in, you know, 264 00:12:09,520 --> 00:12:12,040 Speaker 3: worries around the likes that interest rate they might be paying, 265 00:12:12,080 --> 00:12:14,440 Speaker 3: and what it might be in the future, the risk 266 00:12:14,480 --> 00:12:16,000 Speaker 3: of do I have a job or not? Will this 267 00:12:16,120 --> 00:12:19,280 Speaker 3: completely upset the apple cart, probably more importantly for some 268 00:12:19,360 --> 00:12:23,239 Speaker 3: people that probably had their potential deposit in their investments, 269 00:12:23,320 --> 00:12:24,840 Speaker 3: all of a sudden they didn't have as much of 270 00:12:24,840 --> 00:12:27,480 Speaker 3: a deposit as before. That means that there's still no 271 00:12:27,600 --> 00:12:29,760 Speaker 3: real reason that prices are going to be bid up, 272 00:12:29,920 --> 00:12:31,880 Speaker 3: and I think for a while then you'll start to 273 00:12:31,960 --> 00:12:35,280 Speaker 3: we'll continue to see yes, probably some price rises, but 274 00:12:35,520 --> 00:12:38,160 Speaker 3: very very muted as you go through the next couple 275 00:12:38,200 --> 00:12:39,960 Speaker 3: of years. And that's probably not a bad place for 276 00:12:40,040 --> 00:12:42,600 Speaker 3: New Zealand. What's interesting is it does now mean that 277 00:12:42,600 --> 00:12:46,040 Speaker 3: people are increasingly going well, okay, housing market doesn't have 278 00:12:46,080 --> 00:12:48,520 Speaker 3: a lot of immediate growth in it. Where am I 279 00:12:48,559 --> 00:12:50,520 Speaker 3: making money now? And that seems to be the piece 280 00:12:50,520 --> 00:12:53,360 Speaker 3: where people are casting around a lot more for not 281 00:12:53,440 --> 00:12:56,960 Speaker 3: only money making options, but a wider variety of those options. 282 00:12:57,280 --> 00:13:01,440 Speaker 1: That's a nice segue into the Cheesies Quarterly Index, which 283 00:13:01,440 --> 00:13:04,679 Speaker 1: we have released this week. And definitely there is a 284 00:13:04,679 --> 00:13:09,560 Speaker 1: correlation we've seen between interest rates and investor sentiment. We've 285 00:13:09,559 --> 00:13:12,000 Speaker 1: got data for the last five years, which is, you know, 286 00:13:12,000 --> 00:13:14,840 Speaker 1: it's a good metric, and it would appear that when 287 00:13:15,000 --> 00:13:19,480 Speaker 1: rates have come down there is more immediacy in terms 288 00:13:19,520 --> 00:13:20,199 Speaker 1: of investing. 289 00:13:20,840 --> 00:13:21,719 Speaker 2: What would you. 290 00:13:21,640 --> 00:13:23,880 Speaker 3: Say, I think there's a few elements to it. One 291 00:13:23,960 --> 00:13:27,520 Speaker 3: is that generally, as your interest rates come lower, some 292 00:13:27,600 --> 00:13:30,400 Speaker 3: of your sort of less risky options, you know, putting 293 00:13:30,400 --> 00:13:33,240 Speaker 3: money into term deposits or similar just isn't nearly as 294 00:13:33,280 --> 00:13:36,240 Speaker 3: attractive anymore. When it becomes a little bit harder to 295 00:13:36,240 --> 00:13:38,200 Speaker 3: make those returns, you're having to sort of, you know, 296 00:13:38,320 --> 00:13:41,680 Speaker 3: change around or think about adjusting your risk profile. I 297 00:13:41,679 --> 00:13:44,600 Speaker 3: think it's also though, that as those interest rates come down, 298 00:13:44,600 --> 00:13:47,200 Speaker 3: they do normally stimulate a bit more economic activity on 299 00:13:47,240 --> 00:13:50,040 Speaker 3: the whole, both here and around the world. That generally 300 00:13:50,040 --> 00:13:53,080 Speaker 3: means more economic activity, more selling for the businesses that 301 00:13:53,120 --> 00:13:56,080 Speaker 3: you might be investing in, better returns, and similar over time. 302 00:13:56,120 --> 00:13:59,120 Speaker 3: So it's sort of reassuring to see that. I think. Also, though, 303 00:13:59,160 --> 00:14:01,400 Speaker 3: the big challenge in recent times has been that greater 304 00:14:01,520 --> 00:14:04,800 Speaker 3: level of volatility that you've seen coming forward. There's been 305 00:14:04,840 --> 00:14:07,640 Speaker 3: a lot of rebalancing, both from retail investors but also 306 00:14:07,679 --> 00:14:10,480 Speaker 3: the big institutional guys. Everyone's trying to figure out what 307 00:14:10,520 --> 00:14:13,080 Speaker 3: the sweet spot is and sort of how to balance 308 00:14:13,120 --> 00:14:15,520 Speaker 3: what is a lot of uncertainty, and the best way 309 00:14:15,559 --> 00:14:18,360 Speaker 3: for that seems to be less picking one deliberate strategy 310 00:14:18,360 --> 00:14:21,000 Speaker 3: and going all in and more having that quite a 311 00:14:21,040 --> 00:14:24,000 Speaker 3: bit more diversified option, which is reassuring to see because 312 00:14:24,040 --> 00:14:26,160 Speaker 3: that seems to be the best method. But people are 313 00:14:26,280 --> 00:14:28,960 Speaker 3: very much trying to sort of seek out those different opportunities. 314 00:14:29,280 --> 00:14:33,560 Speaker 1: We're also seeing subset of investors which is growing actually 315 00:14:33,600 --> 00:14:37,720 Speaker 1: looking to other emerging sectors, like we're talking AI, we're 316 00:14:37,720 --> 00:14:42,120 Speaker 1: talking crypto, we're talking defense tech, we're talking autonomous vehicles, 317 00:14:42,120 --> 00:14:48,320 Speaker 1: which it's quite exciting in some respects. Obviously, commercialization with 318 00:14:48,400 --> 00:14:52,240 Speaker 1: these sort of new tech aspects are coming to the fore. 319 00:14:52,520 --> 00:14:55,120 Speaker 3: I think also though, the availability of some of these 320 00:14:55,120 --> 00:14:57,960 Speaker 3: options to investors is new, right, Like, there are some 321 00:14:58,080 --> 00:15:01,520 Speaker 3: exciting opportunities there, but some of these again are a 322 00:15:01,560 --> 00:15:03,760 Speaker 3: little bit more unproven. And look, if you want to 323 00:15:03,760 --> 00:15:06,160 Speaker 3: take that big risk, you might get that big return, sure, 324 00:15:06,440 --> 00:15:09,080 Speaker 3: but equally it might not come off to the same degree. 325 00:15:09,320 --> 00:15:11,320 Speaker 3: I remember, even a couple of years ago, you started 326 00:15:11,320 --> 00:15:13,720 Speaker 3: to see a few more businesses that have basically sold 327 00:15:13,800 --> 00:15:17,120 Speaker 3: nothing at that point, and the evaluations continue to skyrock 328 00:15:17,280 --> 00:15:20,400 Speaker 3: higher and higher on this expectation of better things to come, 329 00:15:20,560 --> 00:15:23,520 Speaker 3: coupled with the fact that people are seeking those sort 330 00:15:23,520 --> 00:15:27,440 Speaker 3: of higher returns because inflation has been high, economic pressures 331 00:15:27,440 --> 00:15:30,200 Speaker 3: have come on. They are few people like say, not 332 00:15:30,240 --> 00:15:32,520 Speaker 3: all of them, but that growing subset caen to find 333 00:15:32,560 --> 00:15:35,400 Speaker 3: a different opportunity, and I guess hoping to be not 334 00:15:35,440 --> 00:15:37,720 Speaker 3: necessarily the first, but in that sort of early wave 335 00:15:37,840 --> 00:15:40,280 Speaker 3: of adopters and investors, because that's where you start to 336 00:15:40,280 --> 00:15:42,320 Speaker 3: make some of those longer gains. Over time, you get 337 00:15:42,320 --> 00:15:45,040 Speaker 3: an early you sort of ride that wave through. What 338 00:15:45,120 --> 00:15:47,240 Speaker 3: will be interesting, I think is that at some point 339 00:15:47,280 --> 00:15:49,120 Speaker 3: you will have some of these options that don't perform 340 00:15:49,120 --> 00:15:51,880 Speaker 3: as well. That's just how the market works. It'll be 341 00:15:51,920 --> 00:15:54,200 Speaker 3: interesting to see how people respond to that in terms 342 00:15:54,240 --> 00:15:56,160 Speaker 3: of do they get a little bit burned and then 343 00:15:56,200 --> 00:15:58,880 Speaker 3: immediately withdraw or do they go, look, actually, this is 344 00:15:58,920 --> 00:16:01,080 Speaker 3: how the markets work. I'm going to be sort of 345 00:16:01,280 --> 00:16:03,520 Speaker 3: happy to keep in it for that longer period of time. 346 00:16:03,680 --> 00:16:06,120 Speaker 3: I think that people generally will stick around. They're often 347 00:16:06,120 --> 00:16:09,120 Speaker 3: going to be younger investors who are have a bit 348 00:16:09,160 --> 00:16:11,600 Speaker 3: more risk tolerance, willing to ride the wave for longer. 349 00:16:12,240 --> 00:16:14,200 Speaker 3: I mean, it's something that also comes up a lot 350 00:16:14,240 --> 00:16:16,880 Speaker 3: more in conversation. You know, people have been asking recently 351 00:16:17,120 --> 00:16:21,080 Speaker 3: about the likes of AI, about gold, about carbon credits, 352 00:16:21,080 --> 00:16:24,600 Speaker 3: about you know, crypto and similar. But also what's interesting 353 00:16:24,640 --> 00:16:27,960 Speaker 3: I think is even some of the subsets of certain industries. 354 00:16:28,000 --> 00:16:31,000 Speaker 3: You know, defenses are often a lot hotter and of 355 00:16:31,080 --> 00:16:34,760 Speaker 3: greater interest these days. You know, questions around will actually 356 00:16:34,800 --> 00:16:36,760 Speaker 3: how do you what are you looking for when it 357 00:16:36,800 --> 00:16:40,000 Speaker 3: comes to defense assets? You know, it's not necessarily the 358 00:16:40,080 --> 00:16:42,320 Speaker 3: usual will if consumers get to spend more than things 359 00:16:42,360 --> 00:16:44,640 Speaker 3: will be better for defense as well. I think that 360 00:16:44,680 --> 00:16:47,080 Speaker 3: the geopolitics is going to be a whole lot more challenging, 361 00:16:47,120 --> 00:16:49,960 Speaker 3: so different drivers I think means that people are also 362 00:16:50,000 --> 00:16:52,640 Speaker 3: seeking out a different sort of information than what they've 363 00:16:52,640 --> 00:16:53,200 Speaker 3: had before. 364 00:16:53,480 --> 00:16:55,480 Speaker 1: And I do see like even in the US they're 365 00:16:55,520 --> 00:16:59,240 Speaker 1: thinking about being able to use your crypto assets as 366 00:16:59,320 --> 00:17:03,480 Speaker 1: part of your for a house. Even in Germany they're 367 00:17:03,480 --> 00:17:06,280 Speaker 1: looking at banks are looking at being able to transact 368 00:17:06,320 --> 00:17:08,800 Speaker 1: in crypto. I mean, we're not there yet, but it 369 00:17:08,840 --> 00:17:13,080 Speaker 1: does seem to be continuing to increase in demand. 370 00:17:13,840 --> 00:17:17,200 Speaker 3: Absolutely not only increase in demand, but becoming more mainstream. 371 00:17:17,280 --> 00:17:19,520 Speaker 3: You know, again, you go back sort of five, certainly 372 00:17:19,520 --> 00:17:22,080 Speaker 3: ten years ago, and let's be quite honest, crypto was 373 00:17:22,119 --> 00:17:24,800 Speaker 3: not mainstream. It was very much fringe. It was seen 374 00:17:24,840 --> 00:17:28,439 Speaker 3: to be you know, different odd at some points. I 375 00:17:28,480 --> 00:17:30,000 Speaker 3: still think, you know, for a lot of people that 376 00:17:30,040 --> 00:17:31,560 Speaker 3: you've got to keep your wits about you in some 377 00:17:31,640 --> 00:17:34,880 Speaker 3: of those areas because for sort of every sensible approach 378 00:17:34,920 --> 00:17:37,600 Speaker 3: that's being taken in some areas to crypto, there's another 379 00:17:37,640 --> 00:17:39,840 Speaker 3: fart coin that comes out every second day as well. 380 00:17:39,920 --> 00:17:43,560 Speaker 3: Like the variety there makes it hard sometimes to sort 381 00:17:43,560 --> 00:17:47,399 Speaker 3: of say crypto is this and be an all encompassing statement. 382 00:17:47,440 --> 00:17:49,280 Speaker 3: There's a bit of variety in there, but it is 383 00:17:49,320 --> 00:17:52,520 Speaker 3: becoming more mainstream. There's certainly more opportunity that starts to 384 00:17:52,560 --> 00:17:56,240 Speaker 3: come through, and I guess also slightly challenging to say this, 385 00:17:56,359 --> 00:17:58,600 Speaker 3: but I think it's real that you look around the world, 386 00:17:58,880 --> 00:18:01,440 Speaker 3: less trust and government and similar means that people are 387 00:18:01,520 --> 00:18:04,000 Speaker 3: again just wanting to hedge their bets a little bit 388 00:18:04,040 --> 00:18:05,960 Speaker 3: more in terms of where they sort of park their 389 00:18:05,960 --> 00:18:08,080 Speaker 3: money and their assets. And I think again, for a 390 00:18:08,080 --> 00:18:10,960 Speaker 3: lot of people, it's not necessarily saying, look, I'm going 391 00:18:11,000 --> 00:18:13,679 Speaker 3: all in on any one sect or whatever it happens 392 00:18:13,680 --> 00:18:16,840 Speaker 3: to be, but I'm quite keen. As an investor these days, 393 00:18:16,920 --> 00:18:19,080 Speaker 3: it seems on average to be a bit more exposed 394 00:18:19,080 --> 00:18:21,520 Speaker 3: to a lot of things, and that sort of broad, 395 00:18:21,600 --> 00:18:24,119 Speaker 3: diverse exposure does mean that you can pick up some 396 00:18:24,200 --> 00:18:27,120 Speaker 3: of those gains when some of those newer asset classes 397 00:18:27,160 --> 00:18:29,600 Speaker 3: start to emerge and provide you more potential. And I 398 00:18:29,600 --> 00:18:32,520 Speaker 3: think this is where it's been interesting seeing people develop 399 00:18:32,560 --> 00:18:35,199 Speaker 3: the last couple of years when there has been this 400 00:18:35,359 --> 00:18:39,320 Speaker 3: sort of implicit conversation amongst New Zealanders around their risk tolerance, 401 00:18:39,560 --> 00:18:41,960 Speaker 3: because it has been for you know, when term deposits 402 00:18:41,960 --> 00:18:43,959 Speaker 3: were high, where you didn't have to think about risk tolerance. 403 00:18:44,000 --> 00:18:46,440 Speaker 3: You parked your money in something that just gave you, 404 00:18:46,440 --> 00:18:48,560 Speaker 3: you know, it just continued to provide at a high 405 00:18:48,600 --> 00:18:50,240 Speaker 3: and high level. Now that you've got to be a 406 00:18:50,280 --> 00:18:52,280 Speaker 3: bit more discerning, I think that's where the level of 407 00:18:52,280 --> 00:18:54,560 Speaker 3: interest is coming back. I mean same in terms of 408 00:18:54,600 --> 00:18:56,960 Speaker 3: the number or proportion of people on shares as I 409 00:18:57,040 --> 00:18:59,679 Speaker 3: expect to are buying companies specifically, Again, a little bit 410 00:18:59,680 --> 00:19:03,160 Speaker 3: more new wants there where people are going. Look, I've 411 00:19:03,240 --> 00:19:04,920 Speaker 3: done a bit of research. I want to make sure 412 00:19:04,920 --> 00:19:07,239 Speaker 3: that I understand my exposure a bit more. These are 413 00:19:07,240 --> 00:19:09,480 Speaker 3: the areas I'm starting to push into. So again, I 414 00:19:09,480 --> 00:19:12,400 Speaker 3: think we've got a more discerning, a sort of more 415 00:19:12,640 --> 00:19:14,960 Speaker 3: more direct investor starting to come through. 416 00:19:15,359 --> 00:19:18,520 Speaker 1: Rat Just thinking about the US economy, there were lots 417 00:19:18,520 --> 00:19:21,639 Speaker 1: of predictions that with the tariff uncertainty and the like, 418 00:19:21,800 --> 00:19:24,359 Speaker 1: that that economy would start to slow. 419 00:19:25,240 --> 00:19:26,440 Speaker 2: We actually aren't. 420 00:19:26,320 --> 00:19:29,800 Speaker 1: Seeing that, maybe because the tariff situation is on again, 421 00:19:29,840 --> 00:19:33,480 Speaker 1: off again, but really it does seem that still a powerhouse. 422 00:19:33,880 --> 00:19:36,320 Speaker 3: Yeah, the US economy seems a little bit unkillable on 423 00:19:36,880 --> 00:19:39,400 Speaker 3: that front, I mean a bit serious. I mean, you're right, 424 00:19:39,480 --> 00:19:43,280 Speaker 3: people were expecting economic activity to pull back, for inflation 425 00:19:43,400 --> 00:19:46,119 Speaker 3: to spike a whole lot higher, for unemployment to start 426 00:19:46,160 --> 00:19:48,720 Speaker 3: to increase. You just really haven't seen too many of 427 00:19:48,720 --> 00:19:51,600 Speaker 3: those signs. I think underneath the surface is a little 428 00:19:51,640 --> 00:19:54,480 Speaker 3: bit in the data that does suggest again more challenges. 429 00:19:55,040 --> 00:19:57,200 Speaker 3: You look at the likes of some of the over 430 00:19:57,600 --> 00:20:00,600 Speaker 3: revisions that keep coming through to employment numbers in the US, 431 00:20:00,640 --> 00:20:03,440 Speaker 3: they do generally continue to be revised lower on this 432 00:20:03,560 --> 00:20:06,440 Speaker 3: sort of second and third published. But again there's still 433 00:20:06,560 --> 00:20:09,119 Speaker 3: enough in there, there's still enough jobs growth that's keeping 434 00:20:09,160 --> 00:20:11,919 Speaker 3: the economic motor humming. I do wonder if part of 435 00:20:11,920 --> 00:20:14,400 Speaker 3: it is a timing thing. You know, you have had 436 00:20:14,440 --> 00:20:18,280 Speaker 3: in recent times, a whole lot of uncertainty. People have 437 00:20:18,400 --> 00:20:22,240 Speaker 3: generally probably just tried to keep on moving forward, haven't 438 00:20:22,280 --> 00:20:24,080 Speaker 3: known what way to sort of move in terms of 439 00:20:24,080 --> 00:20:27,560 Speaker 3: investment or otherwise. So I do wonder if it might 440 00:20:27,600 --> 00:20:29,520 Speaker 3: be sort of again you start to see those impacts 441 00:20:29,520 --> 00:20:32,959 Speaker 3: a little bit later on. But again, even then, the 442 00:20:33,000 --> 00:20:35,760 Speaker 3: economic motor in the US still seems solid enough for 443 00:20:35,880 --> 00:20:38,480 Speaker 3: the moment with the I mean, the feed is still 444 00:20:38,480 --> 00:20:40,520 Speaker 3: talking about sort of one to two rates cuts this 445 00:20:40,640 --> 00:20:43,359 Speaker 3: year still as well, which is sort of the weird 446 00:20:43,400 --> 00:20:47,000 Speaker 3: thing is that the economy looks robust enough, underlying conditions 447 00:20:47,040 --> 00:20:48,960 Speaker 3: look a little bit weaker, which might allow you to 448 00:20:48,960 --> 00:20:51,600 Speaker 3: cut interest rates a bit more, but you're certainly not 449 00:20:51,640 --> 00:20:53,840 Speaker 3: going to get some of the larger cuts that some 450 00:20:53,880 --> 00:20:56,200 Speaker 3: people I think hope for to try and stimulate even 451 00:20:56,240 --> 00:20:58,760 Speaker 3: more activity, and that's probably the right spot for the 452 00:20:58,840 --> 00:21:01,880 Speaker 3: US in general, but it also means that increasingly look 453 00:21:02,320 --> 00:21:05,320 Speaker 3: earlier this year, when the tariffs were announced, people were saying, 454 00:21:05,320 --> 00:21:07,400 Speaker 3: We're going to completely move away from the US. I'm 455 00:21:07,440 --> 00:21:09,400 Speaker 3: just not going to park any money there. I mean, 456 00:21:09,440 --> 00:21:11,840 Speaker 3: people have come flocking back pretty quickly because there's still 457 00:21:11,840 --> 00:21:14,840 Speaker 3: good returns. They still look at other opportunities too. Europe 458 00:21:14,920 --> 00:21:17,080 Speaker 3: still seems to be a bit more in interest than before, 459 00:21:17,480 --> 00:21:20,600 Speaker 3: but certainly those US numbers look a little bit more solid. 460 00:21:20,720 --> 00:21:22,960 Speaker 3: I guess the question will be as we continue through 461 00:21:23,000 --> 00:21:25,080 Speaker 3: the year, do you see a bit more of a 462 00:21:25,119 --> 00:21:27,960 Speaker 3: trend start to emerge on either direction, because I think 463 00:21:27,960 --> 00:21:30,120 Speaker 3: that's almost part of the problem is that the US 464 00:21:30,160 --> 00:21:32,080 Speaker 3: economy is a little bit direction list at the moment. 465 00:21:32,080 --> 00:21:33,560 Speaker 3: You're not sure if it's about to trend down or 466 00:21:33,600 --> 00:21:36,159 Speaker 3: trend up. It's just it's just moving forward at a 467 00:21:36,160 --> 00:21:38,920 Speaker 3: solid pace without sort of any movement up or down. 468 00:21:39,560 --> 00:21:43,800 Speaker 1: Yes, and markets are definitely hitting record highs and NAISDAK 469 00:21:43,840 --> 00:21:47,359 Speaker 1: and the S and P five hundred, so it's I 470 00:21:47,400 --> 00:21:50,359 Speaker 1: can see why investors, particularly on Cheesy's. We have about 471 00:21:50,400 --> 00:21:54,160 Speaker 1: eighty percent of our trading as in US. That said, 472 00:21:54,240 --> 00:21:57,160 Speaker 1: forty one percent is held here in New Zealand, so 473 00:21:57,440 --> 00:21:59,240 Speaker 1: there's a bit of a difference there, but in terms 474 00:21:59,280 --> 00:22:02,640 Speaker 1: of trading, that's definitely where people are still gravitating. 475 00:22:02,880 --> 00:22:05,600 Speaker 3: Yeah, it's interesting as well, right with the volatility that's 476 00:22:05,640 --> 00:22:07,320 Speaker 3: come through because I mean, you look at some of 477 00:22:07,320 --> 00:22:10,920 Speaker 3: the days we've had this year, like wild wild times 478 00:22:11,680 --> 00:22:14,840 Speaker 3: and watching what would you know previously have been a 479 00:22:14,840 --> 00:22:17,439 Speaker 3: couple of weeks or months of movement happen, you know, 480 00:22:17,480 --> 00:22:21,440 Speaker 3: within seconds or minutes. Has been quite hard to stomach sometimes, 481 00:22:21,440 --> 00:22:24,040 Speaker 3: and even amongst that, actually it looks like people have 482 00:22:24,119 --> 00:22:25,960 Speaker 3: been buying in a bit more. You know. I'm not 483 00:22:26,000 --> 00:22:28,159 Speaker 3: going to say everyone buying the dip, but I think 484 00:22:28,200 --> 00:22:30,080 Speaker 3: there's been the sort of recognition from a lot of 485 00:22:30,080 --> 00:22:33,399 Speaker 3: people that, hey, sometimes that the markets have been I 486 00:22:33,400 --> 00:22:37,359 Speaker 3: think maybe over correcting or a bit overly worried about 487 00:22:37,400 --> 00:22:39,359 Speaker 3: things and then seem to come back the other way. Now, 488 00:22:39,960 --> 00:22:41,840 Speaker 3: let's be real. I also worry a little bit that 489 00:22:41,880 --> 00:22:45,600 Speaker 3: the markets sometimes undercook or don't forward cast as much 490 00:22:45,720 --> 00:22:48,880 Speaker 3: of the challenging conditions and sort of take good expected 491 00:22:48,920 --> 00:22:51,199 Speaker 3: economic news and sort of just run with it. But 492 00:22:51,480 --> 00:22:53,920 Speaker 3: what was fascinating, I think is also in recent times, 493 00:22:53,920 --> 00:22:56,120 Speaker 3: when you had conflict in the Middle East, we've been 494 00:22:56,160 --> 00:22:59,520 Speaker 3: expecting likes of oil prices some of those other commodities 495 00:22:59,560 --> 00:23:02,879 Speaker 3: to spike up sharply. There wasn't anything, in fact, in 496 00:23:02,960 --> 00:23:06,000 Speaker 3: terms of actual market action. I think most of the 497 00:23:06,119 --> 00:23:08,720 Speaker 3: US market numbers actually went higher despite some of those 498 00:23:08,720 --> 00:23:12,120 Speaker 3: commodities starting to show pressure. Now I do wonder if 499 00:23:12,320 --> 00:23:14,840 Speaker 3: everyone's become a little bit numb in a sense to 500 00:23:15,080 --> 00:23:17,920 Speaker 3: just how many of these big geopolitical things come through. 501 00:23:18,280 --> 00:23:20,080 Speaker 3: And people are now starting to look a little bit 502 00:23:20,080 --> 00:23:22,720 Speaker 3: more at the numbers and going, Okay, yep, some people 503 00:23:22,760 --> 00:23:26,520 Speaker 3: are expecting certain things, but until I actually start to 504 00:23:26,520 --> 00:23:29,480 Speaker 3: see them that expectation move to reality. I'm going to 505 00:23:29,520 --> 00:23:31,240 Speaker 3: look at what's actually right in front of me, what's 506 00:23:31,320 --> 00:23:33,919 Speaker 3: actually being reported here and now, and move with that. 507 00:23:34,040 --> 00:23:36,719 Speaker 3: And I think that's again, that's quite a different market 508 00:23:36,760 --> 00:23:39,360 Speaker 3: than what we've seen previously. When you jumped at shadows, 509 00:23:39,400 --> 00:23:41,400 Speaker 3: you jumped to any sort of little tibit of information. 510 00:23:41,520 --> 00:23:44,000 Speaker 3: Now people seem to be not only holding back but 511 00:23:44,080 --> 00:23:46,639 Speaker 3: going look when there is actual, real information. I'm going 512 00:23:46,720 --> 00:23:48,199 Speaker 3: to work on that. I'm going to pile in a 513 00:23:48,240 --> 00:23:50,199 Speaker 3: bit more, and I'm not going to react nearly as 514 00:23:50,240 --> 00:23:52,479 Speaker 3: much to sort of just some of that that broader 515 00:23:52,520 --> 00:23:54,959 Speaker 3: stuff in the expectation piece. That's a shift. 516 00:23:55,119 --> 00:23:58,440 Speaker 1: Let's jump back to New Zealand and how businesses here 517 00:23:58,520 --> 00:24:01,359 Speaker 1: are feeling. There's been a number of out in recent weeks. 518 00:24:02,760 --> 00:24:05,520 Speaker 2: They were looking at a recovery. But what would you say, 519 00:24:05,760 --> 00:24:07,040 Speaker 2: we're sentiment. 520 00:24:06,640 --> 00:24:10,840 Speaker 3: Now Sentiments okay? And I guess I say okay, because 521 00:24:11,240 --> 00:24:13,240 Speaker 3: depending on how you look at it, in some areas, 522 00:24:13,240 --> 00:24:16,680 Speaker 3: the economy still looks weak forward expectations still don't look great, 523 00:24:17,000 --> 00:24:19,679 Speaker 3: but confidence about what's sort of coming up next is 524 00:24:19,720 --> 00:24:22,760 Speaker 3: still improving, if you will, And I think that's again 525 00:24:22,800 --> 00:24:26,040 Speaker 3: probably indicative of where the economy is moving. It's improving 526 00:24:26,040 --> 00:24:28,439 Speaker 3: slowly but surely, but it's sort of a sluggish one. 527 00:24:28,560 --> 00:24:31,480 Speaker 3: People are still worried in different sectors about how they'll go. 528 00:24:31,840 --> 00:24:33,639 Speaker 3: You know, you look at the likes of the construction 529 00:24:33,800 --> 00:24:37,440 Speaker 3: sector again pretty tough in many respects, Retail a whole 530 00:24:37,480 --> 00:24:41,240 Speaker 3: lot more, mixed, manufacturing a whole lot more, mixed, agricultural 531 00:24:41,280 --> 00:24:43,440 Speaker 3: primary sector in a good spot, but I do think 532 00:24:43,480 --> 00:24:45,560 Speaker 3: as well. Second half of this year, you do have 533 00:24:45,600 --> 00:24:48,480 Speaker 3: people that are refixing onto those lone mortgage rates. Everyone's 534 00:24:48,520 --> 00:24:51,080 Speaker 3: trying to act a little bit more limited in terms 535 00:24:51,080 --> 00:24:53,760 Speaker 3: of their investment intentions and similar There seems to be 536 00:24:53,800 --> 00:24:55,720 Speaker 3: this view of, look, yes, there might well be better 537 00:24:55,760 --> 00:24:57,960 Speaker 3: things to come, but I'm going to be very careful 538 00:24:58,000 --> 00:24:59,800 Speaker 3: with my money. As a business, I'm going to be 539 00:25:00,000 --> 00:25:02,879 Speaker 3: careful with my hiring. And from a household perspective, everyone 540 00:25:02,920 --> 00:25:05,080 Speaker 3: seems to be more careful with their cash too. 541 00:25:05,560 --> 00:25:08,440 Speaker 1: Yeah, jobs, I would have thought they would be coming 542 00:25:08,480 --> 00:25:10,760 Speaker 1: back a little bit by now, but the figures aren't 543 00:25:10,800 --> 00:25:11,760 Speaker 1: really telling us that. 544 00:25:12,359 --> 00:25:14,879 Speaker 3: Every time we get monthly job numbers, they seem to 545 00:25:14,880 --> 00:25:16,600 Speaker 3: show a little bit of a slight tick up, but 546 00:25:16,640 --> 00:25:19,280 Speaker 3: then that almost always gets revised again within the next 547 00:25:19,280 --> 00:25:22,320 Speaker 3: couple of months. And the more interesting indicator in recent 548 00:25:22,359 --> 00:25:24,600 Speaker 3: times has been the number of job ads that are 549 00:25:24,600 --> 00:25:27,080 Speaker 3: out there, you know, the number of job opportunities that 550 00:25:27,119 --> 00:25:30,760 Speaker 3: you can apply for in seasonally adjusted terms. They've basically 551 00:25:30,840 --> 00:25:33,560 Speaker 3: been flat now for just about a year now. That's 552 00:25:33,720 --> 00:25:35,880 Speaker 3: flat at sort of levels that we haven't seen since 553 00:25:35,920 --> 00:25:38,480 Speaker 3: about twenty thirteen or so. So it's been a long time. 554 00:25:38,840 --> 00:25:41,320 Speaker 3: The fact that they're flat is good relative to the 555 00:25:41,320 --> 00:25:43,720 Speaker 3: idea that they could still be falling, but it also 556 00:25:43,800 --> 00:25:45,960 Speaker 3: says that if they've been flat for nearly a year now, 557 00:25:46,000 --> 00:25:48,240 Speaker 3: there's not really any real trend of them starting to 558 00:25:48,240 --> 00:25:51,480 Speaker 3: pick up any sort of momentum. And you do just 559 00:25:51,520 --> 00:25:53,960 Speaker 3: get this feeling again from businesses that they are in 560 00:25:54,000 --> 00:25:56,679 Speaker 3: this sort of holding pattern where they would love to 561 00:25:56,680 --> 00:25:59,119 Speaker 3: employ more people. They just can't see the sort of 562 00:25:59,520 --> 00:26:03,280 Speaker 3: expectations for really strong things ahead enough for you to 563 00:26:03,320 --> 00:26:05,399 Speaker 3: start to hire a whole bunch more. You're seeing that 564 00:26:05,440 --> 00:26:08,119 Speaker 3: as well a lot more young people that are becoming unemployed. 565 00:26:08,200 --> 00:26:11,000 Speaker 3: That's the group who are often losing their jobs, some 566 00:26:11,040 --> 00:26:13,280 Speaker 3: of them heading for Australia and similar So some of 567 00:26:13,280 --> 00:26:16,359 Speaker 3: those trends I think are fairly well established at this point. 568 00:26:16,400 --> 00:26:18,239 Speaker 3: We also haven't seen any real trend that they are 569 00:26:18,240 --> 00:26:21,520 Speaker 3: starting to improve any quicker than we might have expected. 570 00:26:21,520 --> 00:26:24,360 Speaker 3: In fact, in most cases they're taking a whole lot longer. 571 00:26:24,440 --> 00:26:28,919 Speaker 1: Now, Brad, is there anything positive that investors can look too? 572 00:26:29,920 --> 00:26:33,080 Speaker 2: Where is there any silver linux in somewhere? 573 00:26:33,119 --> 00:26:35,600 Speaker 3: As there seem to be some decent enough deals on 574 00:26:36,280 --> 00:26:38,359 Speaker 3: in terms of the prices that you can get various 575 00:26:38,400 --> 00:26:40,960 Speaker 3: stocks and options and similar for and again you know, 576 00:26:41,000 --> 00:26:43,640 Speaker 3: where you've done a bit of homework, other options seem 577 00:26:43,680 --> 00:26:46,119 Speaker 3: to be far over valued considering what they're delivering. But 578 00:26:46,400 --> 00:26:49,160 Speaker 3: again that's very case by case. I guess what's interesting 579 00:26:49,280 --> 00:26:52,720 Speaker 3: is that normally when we look at different sectors, is 580 00:26:52,800 --> 00:26:54,680 Speaker 3: quite a general environment. 581 00:26:54,760 --> 00:26:54,920 Speaker 4: Right. 582 00:26:54,960 --> 00:26:56,840 Speaker 3: You look at retail and you go, well, all of 583 00:26:56,880 --> 00:26:59,879 Speaker 3: retail's not doing that well. It's been interesting. In the 584 00:27:00,000 --> 00:27:02,159 Speaker 3: New Zealand case, you see a few places where they 585 00:27:02,200 --> 00:27:05,159 Speaker 3: put our announcement like, look, training conditions have been worse 586 00:27:05,200 --> 00:27:07,840 Speaker 3: than we thought. We've seen, you know, poorer results than 587 00:27:07,840 --> 00:27:10,520 Speaker 3: we've been expecting. But other areas sort of a little 588 00:27:10,560 --> 00:27:13,439 Speaker 3: bit quietly but pretty confidently going like, hey, numbers are 589 00:27:13,440 --> 00:27:16,000 Speaker 3: not bad at the moment. We're going all right, even 590 00:27:16,000 --> 00:27:18,520 Speaker 3: within sometimes the same segment, which really does go to 591 00:27:18,560 --> 00:27:20,920 Speaker 3: show that is a very discerning environment again, where it's 592 00:27:20,920 --> 00:27:23,560 Speaker 3: not sort of just everything moving in one broad thrust. 593 00:27:24,280 --> 00:27:26,240 Speaker 3: I do wonder as well if that means that people 594 00:27:26,280 --> 00:27:30,439 Speaker 3: are taking more notice of businesses, strategies, who's on the board, 595 00:27:30,480 --> 00:27:33,200 Speaker 3: what sort of movements they're making, and how quick because 596 00:27:33,240 --> 00:27:35,600 Speaker 3: this does seem to be quite a dynamic environment. Now 597 00:27:35,640 --> 00:27:38,679 Speaker 3: by that. I mean, it's shifting so quickly that I 598 00:27:38,720 --> 00:27:40,640 Speaker 3: do wonder. You know, people seem to be a lot 599 00:27:40,680 --> 00:27:43,760 Speaker 3: more interested in executives. You know, what are they doing, 600 00:27:43,800 --> 00:27:47,040 Speaker 3: what's the board doing? Have they made changes quickly enough? 601 00:27:47,119 --> 00:27:49,160 Speaker 3: Or have they sort of allowed things to just sort 602 00:27:49,200 --> 00:27:51,600 Speaker 3: of languish and then all of a sudden, Oh, some 603 00:27:51,640 --> 00:27:54,520 Speaker 3: big changes come through. They haven't reacted to I don't know, 604 00:27:54,640 --> 00:27:57,119 Speaker 3: be it you know, government cutbacks. They haven't reacted to 605 00:27:57,160 --> 00:27:59,720 Speaker 3: how the market's been shifting. So I do think that 606 00:27:59,720 --> 00:28:04,000 Speaker 3: there's an interesting variation in the reports. Like I say, genuinely, 607 00:28:04,040 --> 00:28:07,080 Speaker 3: some going look, it's pretty tough out there, and sometimes 608 00:28:07,119 --> 00:28:09,120 Speaker 3: operators that you thought would have been a lot more 609 00:28:09,160 --> 00:28:12,600 Speaker 3: solid or stable through a downturn. But equally some areas 610 00:28:12,600 --> 00:28:14,800 Speaker 3: of the market where you go, geez, that's pretty impressive 611 00:28:14,800 --> 00:28:17,359 Speaker 3: that you're still able to make some pretty good numbers happen. 612 00:28:17,600 --> 00:28:20,320 Speaker 3: It's a bit more all what has this company going 613 00:28:20,359 --> 00:28:23,159 Speaker 3: on below the surface? How are the board performing, how 614 00:28:23,160 --> 00:28:24,679 Speaker 3: long have they been there, what are they up to? 615 00:28:25,080 --> 00:28:28,240 Speaker 3: You know, are they agitating for change? What's the executive 616 00:28:28,240 --> 00:28:31,560 Speaker 3: team doing? What's the strategy? And that I do wonder 617 00:28:31,600 --> 00:28:33,000 Speaker 3: as well. I mean I don't think there's a good 618 00:28:33,000 --> 00:28:35,200 Speaker 3: indicator here in New Zealand, but like how many people 619 00:28:35,240 --> 00:28:37,719 Speaker 3: are showing up to the likes of agms and similar 620 00:28:37,920 --> 00:28:40,240 Speaker 3: to try and make sure they either get their point 621 00:28:40,240 --> 00:28:44,080 Speaker 3: across to management and the board, but also trying to 622 00:28:44,080 --> 00:28:45,840 Speaker 3: gain a little bit more information of what are you 623 00:28:45,920 --> 00:28:49,280 Speaker 3: taking us forward into because it is uncertain. You've got 624 00:28:49,280 --> 00:28:51,520 Speaker 3: to be nimble, and I think people are sort of 625 00:28:51,560 --> 00:28:54,440 Speaker 3: casing out boards and management a lot more than they 626 00:28:54,480 --> 00:28:55,000 Speaker 3: did before. 627 00:28:55,280 --> 00:28:57,960 Speaker 2: Is there anything investors should ignore if we end on that? 628 00:28:59,400 --> 00:29:01,840 Speaker 3: I mean, some times it's very easy to doom scroll 629 00:29:01,920 --> 00:29:04,800 Speaker 3: right in this environment like be it you know us 630 00:29:05,520 --> 00:29:09,040 Speaker 3: sort of market changes and similar. I guess probably a 631 00:29:09,160 --> 00:29:11,840 Speaker 3: need to keep your wits about you in terms of 632 00:29:11,840 --> 00:29:14,640 Speaker 3: how current your information is. I remember when the likes 633 00:29:14,640 --> 00:29:17,120 Speaker 3: of you saw a conflict in the Middle East recently. 634 00:29:17,400 --> 00:29:20,080 Speaker 3: I was sometimes reading analysis that had come out that 635 00:29:20,480 --> 00:29:22,440 Speaker 3: basically had missed the mark because it had come out 636 00:29:22,480 --> 00:29:24,760 Speaker 3: too late. You know, by the time someone had published 637 00:29:24,760 --> 00:29:26,440 Speaker 3: and been like, look there's a risk of the oil 638 00:29:26,480 --> 00:29:28,600 Speaker 3: goes to one hundred and ten dollars a barrel. Oil 639 00:29:28,640 --> 00:29:31,000 Speaker 3: had crashed back below seventy all of a sudden, and 640 00:29:31,040 --> 00:29:32,880 Speaker 3: it was just so there is a real need to 641 00:29:32,960 --> 00:29:35,440 Speaker 3: be very very current, or to at least be sort 642 00:29:35,480 --> 00:29:37,760 Speaker 3: of aware of when stuff has been coming out, so 643 00:29:37,800 --> 00:29:40,800 Speaker 3: that you make sure you've got the latest stuff. But also, 644 00:29:41,120 --> 00:29:43,320 Speaker 3: like I say, not doom scrolling too much, because there's 645 00:29:43,320 --> 00:29:45,800 Speaker 3: a lot out there that as an investor as a person, 646 00:29:45,880 --> 00:29:48,960 Speaker 3: you just can't control, and so I think more trying 647 00:29:48,960 --> 00:29:51,320 Speaker 3: to put some of that aside, looking for where there 648 00:29:51,400 --> 00:29:54,360 Speaker 3: is actionable intelligence that you can actually base a bit 649 00:29:54,400 --> 00:29:56,240 Speaker 3: more of a decision off that you might be able 650 00:29:56,280 --> 00:29:58,720 Speaker 3: to do something with yourself. Having a bit of a 651 00:29:58,760 --> 00:30:02,520 Speaker 3: clear headed strategy, working the information and then making the decision. 652 00:30:02,720 --> 00:30:04,640 Speaker 3: That'll probably put you a lot better than sort of 653 00:30:04,680 --> 00:30:08,200 Speaker 3: just blind reacting to every sort of market movement, because 654 00:30:08,560 --> 00:30:11,080 Speaker 3: certainly the thing that I've experienced the last couple of months, 655 00:30:11,120 --> 00:30:13,400 Speaker 3: people are coming forward with a lot more questions about 656 00:30:13,440 --> 00:30:16,760 Speaker 3: that volatility. They're going, hey, this has moved massively. Should 657 00:30:16,760 --> 00:30:19,200 Speaker 3: I be concerned? And normally the answer that question is 658 00:30:19,440 --> 00:30:21,920 Speaker 3: if you were concerned, you should have been concerned before 659 00:30:21,960 --> 00:30:24,120 Speaker 3: the big change came through. So if you've got a 660 00:30:24,120 --> 00:30:26,400 Speaker 3: good strategy, if you know where you're going, I think 661 00:30:26,400 --> 00:30:29,000 Speaker 3: that gives you a lot more confidence as an investor 662 00:30:29,240 --> 00:30:31,000 Speaker 3: as to what you're thinking about for the future. 663 00:30:31,760 --> 00:30:34,240 Speaker 1: Yeah, sometimes it pays to hold, doesn't it. But you 664 00:30:34,240 --> 00:30:35,880 Speaker 1: don't want to put your head in the sand at 665 00:30:35,920 --> 00:30:36,520 Speaker 1: the same time. 666 00:30:36,720 --> 00:30:39,320 Speaker 3: That's the balance, right, You've got to have enough recent 667 00:30:39,480 --> 00:30:42,000 Speaker 3: information to be able to make good judgment calls, not 668 00:30:42,040 --> 00:30:43,880 Speaker 3: so much that you get bogged down put your head 669 00:30:43,880 --> 00:30:46,120 Speaker 3: in the sand. Not so much either that you jump 670 00:30:46,120 --> 00:30:48,680 Speaker 3: at every moving shadow. It's a very delicate balance. 671 00:30:49,000 --> 00:30:51,320 Speaker 1: Well, Brad, we could talk forever as usual, but it's 672 00:30:51,360 --> 00:30:54,240 Speaker 1: time to go. Thanks so much for coming into the studio. 673 00:30:54,480 --> 00:30:56,680 Speaker 3: Thanks for having me. These are always great fun. 674 00:30:56,520 --> 00:30:58,960 Speaker 1: And thanks to everyone for tuning in. You can watch 675 00:30:59,000 --> 00:31:01,560 Speaker 1: your lunch on YouTube tube or find us on your 676 00:31:01,600 --> 00:31:04,360 Speaker 1: favorite podcast app. Leave us a rating and tell us 677 00:31:04,400 --> 00:31:08,080 Speaker 1: what you like to hear next. Matowa