Jeremy Hutton: Milford Asset Management Equities Analyst ahead of Trump's 'Liberation Day'

Tomorrow at 9am NZT, investors, economists and financial experts will be tuned in to watch Donald Trump's much-anticipated update regarding tariffs. 

Many nations are bracing themselves for the potential economic impacts - but there's hope New Zealand could escape the worst of it.

Milford Asset Management's Jeremy Hutton speculated ahead of the big day.

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Episode Transcript

Speaker 1 (00:00):
Jeremy Hutton from Milford's with near the Rose Garden, nine
am tomorrow our time. It's all on for young and old.
What are you looking for in this Trump announcement, Jeremy.

Speaker 2 (00:09):
Yeah, that's right, Ryan. So financial markets have been very
focused on this tariff event, and you're right nine am
tomorrow morning. I think a lot of investors and traders
will be glued to their screens. But from a New
Zealand perspective, you know, there's still a little bit of
hope that we can fly under the radar. We won't
be able to avoid the universal tariff, which is one

(00:29):
limb that seems very likely to come in. That will
be negative for some of our key exports into the US,
so think wine, meat and some dairy products. But then
on the reciprocal tariffs, that's another limb. We do have
very low tariffs of US imports into New Zealand, so
that's a theoretical tick in the good box for US there.

(00:50):
And then the third limb, so Trump does seem very
fixated on US trade deficits. Now, the US does have
a small trade deficit with New Zealand, but again it's
not too bad, especially compared to some other countries like China,
so maybe also a small tick for US there. But
of course, these things are moving around a lot, and
we're just gonna have to wait and see for tomorrow morning.

Speaker 1 (01:10):
Global markets have been moving around a lot, although they've
settled down a bit this week. How's the inset expen today?

Speaker 2 (01:16):
Yeah, global markets in general have had to sell off
on this tariff news uncertainty though, though you're right, you know,
a small rally this week, but you know, to some extent,
markets have been assuming the worst news for now with
this uncertainty, and you know, they're they're seeing these tariffs
as stagflationary, so you know, in other words, that's very
low economic growth and potentially inflationary as as prices could

(01:40):
rise as well, and markets do hate this stagflationary environment.
They're getting none of the interest rate cuts that they
are expecting at the start of the year and also
some potentially lower earnings from companies going forward, so it
could be a bit of a bit of an ugly situation.
And you know, as a response to this, you know
the techivy NASDAK that's off around twelve percent from the

(02:01):
February highs. The SMP is off eight percent, but the
Injidex has feared a little bit better. It's only our
five and a half percent, And that does make sense
given the relative lack of focus that these tariffs have
had on New Zealand.

Speaker 1 (02:15):
Yeah, well, let's hope it stays that way. Hey, although
maybe not for Fisher and Pike with healthcare. They're quite
exposed to America, aren't they.

Speaker 2 (02:22):
Yeah, Fisher and pikeal healthcare that appears the most impacted
from the New Zealand the Intertex companies, and that share
prices down around eleven percent since all the tariff news began.
And effectively, this is Fisher and PIKEL. They you know,
they're manufacturing a decent amount of product in Mexico which
they then export into the US. And this is exactly

(02:42):
the type of business that has been right in Trump's
firing line. He's trying to reshure this type of business.
A few counters to that, though, you know, Fisher and
pikel is a fantastic business, and it operates in a
very defensive sector, which is medical devices. So they do
have a few mitigants they can go to, and they
have released the market already that they think they can

(03:04):
offset around half of the cost of these tariffs, mainly
by just switching their exports to or from New Zealand
from Mexico, so they do have a few options. But
remember Fisher and pikel It is our largest listed company.
It's around fifteen percent of the incidex index, so you
know these tariffs can still have a material impact on
the local market.

Speaker 1 (03:24):
Here, nice one, Jeremy Nice heavy on the show as always,
Jeremy houton Milford Asset Management. For more from Heather Duplessy
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