Greg Smith: Generate investment specialist on the economic impact of the Middle East conflict

The NZX has fallen 3.1 percent as the US and Israeli war on Iran dents people's investment portfolios. 

Closure of the crucial Strait of Hormuz has ignited supply concerns over crude oil - now costing more than $100 US dollars a barrel. 

Shares in Auckland Airport and Fisher and Paykel Healthcare have tumbled.  

Generate investment specialist Greg Smith says the market's accounting for what might happen, and it could turn.

He explained it's also affected by Iran appointing a new leader and Donald Trump refusing to back down - which has pushed out the time frame for resolving everything.

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Episode Transcript

Speaker 1 (00:00):
All right, we'll go now to the markets. The NZX

(00:02):
has closed down nearly four percent on the day. What's
happened over in Australia on the ASX has been described
as a blood bath. Greg Smith is an investment specialist
that generate wealth and key we save and is with us.

Speaker 2 (00:12):
High Greg, Hi, Heather, what brought this on?

Speaker 1 (00:15):
Is it the oil price?

Speaker 2 (00:17):
Yeah, it's all about the aill prices as you're just
talking with Shane about up twenty five percent today. The
all price was that that means it's in seventy percent
since the conflict began a week ago and really just
disppose those fears over our faux inflation being stoked. So yeah,
and the New zeal market was down three point two percent.
We've actually held up pretty well over the past week

(00:38):
or so, but that all changed today. Really was nowhere
to hide. So he had travel stocks and transport stocks
they will are, but yeah, everything was sort of taking
a bit of a bath, including Frish and Pipal Healthcare
and that's our biggest company down four point six percent.
But yeah, certainly all really resting with what happened to
the your price today?

Speaker 1 (00:55):
How worried are you about inflation as a result of
what you're.

Speaker 2 (00:58):
Seeing, well, looking up all stays where it is, or
even goes hi, that is going to be problematic for inflation.
I suppose you know that the big unknown is what
happens with the straight of Hu moves. I suppose it
would point out that you know, a lot of people
have been talking about this being like the seventies, the
oil crisis. It's certainly not that we're seeing a geopolitical
risk premium being priced into oil. There's obviously various options

(01:21):
for oil coming from elsewhere, so that the straight counts
around about twenty percent worlds well in terms of transport.
Obviously Trump wants to get that going again. Iran they
need oil revenues, so they'll be having interest there. And also, yeah,
we can get all from other places. And also the
US UNLO back in the seventies is now a net
exporter ball and it has shells. So yeah, I mean

(01:42):
it's concerning, and obviously we want to see the oil
price head back down, but yeah, current levels, it certainly
would do a bit to stoke inflation. But I think look,
it's also important here that those maybe that are looking
at their key we Saber just to realize what the
market is doing in terms of the market. Stock market
reaction is not accounting for what is happening, but what
might happen. And I think we could easily see things

(02:04):
turn if even there was some sort of diplomacy. I
think the other big thing today was obviously Iran has
a new leader. Obviously Trump isn't backing down, So that
sort of just perhaps pushed out the timeline a bit
for it's being resolved. Obviously the US are still sticking
to the narrative of weeks rather than months.

Speaker 1 (02:20):
Do you think we're being completely rational here or is
this a little bit of the jittery stuff, you know,
like wild reactions to anything at the moment because we're
a bit panicky.

Speaker 2 (02:28):
Oh for sure. And yeah, we're remembering that stock markets
and investors have dealt with lots of crises before. Yeah,
including warts. So if you look at the Ukraine War,
we had a similar move in the old price. We
had a similar move down the shear market. It lasted
a little bit longer, but you look at markets, they
do recover, they get past these crises. If you look
at the S and P five hundred, the biggest index

(02:49):
in America, that's up around about eighty percent since the
Low's posts. Russia's invasion of Ukraine, so really important to
get some perspective here, yeah too.

Speaker 1 (02:58):
Right, Hey Greg, thank you very much appreciated greegs investment
specialists to generate wealth and can we save it?

Speaker 2 (03:03):
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