Shane Solly: Harbour Asset Management expert on investors calling for US rate cuts after weak payrolls report

Recent US payrolls data has indicated the economy is slowing, and it's sparked concern among investors.

Economists are calling on the US Federal Reserve to lower interest rates  at its September 16-17 meeting, in what would be its first reduction in nine months.

Harbour Asset Management's Shane Solly explained further.

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Episode Transcript

Speaker 1 (00:09):
You're listening to a podcast from news Talk zed B.
Follow this and our wide range of podcasts now on iHeartRadio.
Shane Sally Harbor Asset Management is with us.

Speaker 2 (00:18):
Hello Shane, Hello Eaver.

Speaker 1 (00:20):
So the US non farm payrolls data was a bit
weak on Friday. Had the markets react?

Speaker 2 (00:25):
Yeah? Look, it doesn't sound very exciting, but it's quite
a meaningful with this the US non fun payroll as well,
they're just twenty two thousand job ads in August, means
the US jobless rates up to four point three percent.
It's another sign that the US Federal Reserve needs to
get on with rate cats. Now, how did the markets
react us? She might pretty flat down a little bit
down point three. But the big move there was in

(00:46):
bond yields. These long term government bond yards fell, and
that's telling us that the market starting to expect rate
cuts and think in fact, we're seeing up to three
rate cuts from the U Central Bank price and were
actually saill two year agavement bonds fall to three point
five to two percent, which is the lowest since twenty
twenty two. Locally here today we've seen our two year

(01:07):
bond years down as well. We're down to two ninety six,
so below three percent, and the New Zealand Shi mark
wears up almost zero point four percent. We've been great
for it's four percent today, Yeah, more like a tenth
of it.

Speaker 1 (01:21):
Hey, what about the Chinese economic data that also wasn't
that that flash?

Speaker 2 (01:25):
Yeah? Look, we will continue to see some soft data
coming out of China. That August export and import data,
they were below expectations, just showing us that this Chinese
manufacturing machine is slowing down what we are seeing. On
the other hand, though, here there is Chinese regulators talking
about simulating economy. There's some reports about policies to support
consumption in the form of tourism, culture, lifestyle. There's some

(01:49):
opening up of the taps and residential property market. Sin's
in that's the third largest city in China, approximately seventy
and a half million people were there. Going to remove
home purchase restrictions, so meaning people without local household registration
you can buy a house. Quite a meaningful change we've
seen in Shanghai, for example, where we've seen similar changes
the house prices that actually increased sort of seven to

(02:10):
eight percent month on month, So that's quite an important signal.
We're trying to really get that Chinese a kind of aging.
And then a final point, mister G. President G is
going out announcing that China will drive trade and investment liberalization.
So he's of a pushback maybe to some of these
global tariff barriers that are coming through.

Speaker 1 (02:26):
Yeah, what about the stuff that's been happening here locally.

Speaker 2 (02:30):
Yeah, today we saw a couple of interesting corporate announcements.
Tourism Holdings announced that's the recreational van hire company. When
you're doing a trip around South Onland, you're in one
of their great vans. They have made the hard call
and they're going to reset their Australian retail business. They're
going to basically change the models to using the type
of vans conciding the brand, and they're going to reduce
the inventary levels. Also, they're going to close some branches

(02:52):
in Sydney and Brisbane, some of their sales branches, not
their rental branches, the places with their cell vans. Share
prices up slight the other day and we saw Investor,
which is a properly company mainly with retail real estate
by the Silverdale Retail from its current Stride property one
hundred and fortyeen million dollars and they're always going to

(03:13):
raise sixty two and a half million via subordinated convertible notes.
Pretty flat on both those stocks on the day, So yeah,
we're seeing a little bit of activity coming up in
the market here.

Speaker 1 (03:22):
Good stuff, Hey, Shane, thanks as always appreciate it. Shane Soally,
Harbor Asset Management. For more from News Talk sed B,
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