Sam Dickie: Fisher Funds expert on what investors can expect for the second half of 2025

2025 is nearly halfway over - and it's been a memorable one for the markets so far.

Between new developments in AI, ongoing economic uncertainty and Donald Trump's string of tariff announcements, investors have had to contend with a lot of unique factors.

Fisher Funds expert Sam Dickie explains further - and reveals what investors can expect for the months ahead.

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Episode Transcript

Speaker 1 (00:00):
Andrew dickens more than halfway through the year. It's been
a pretty extraordinary year for the market so far, huge
market uncertainty, the rise and rise of AI and all
sorts of stuff, the ongoing recession. So anyway, let's talk
about what investors should have learned and what we might
see in the second half. And I'm joined now by
Sam Dickey from Fisher Funds.

Speaker 2 (00:17):
Hello Sam, Andrew, Good evening.

Speaker 1 (00:20):
So how normal abnormal? Has this year been.

Speaker 2 (00:24):
Quite abnormal? I would say so, the biggest pickup in
volatility and the sharpest correction in equity since the depths
of COVID, and for that brief period after Donald's Liberation Day,
sentiment and equity markets was at its lowest EBB for
quarter of a century. And when you think about the
three big drivers of the game, so growth, inflation, and

(00:46):
interest rates, it's been a fair bit of abnormality there too.
So inflation has continued to behave well and it's slowed
from sort of four and a half percent globally to
three and a half. But interest rates have not played ball.
So it's very very rare for US medium and long
term interest rates to be higher now than they were
at the start of the central bank rate cutting cycle.

(01:07):
And that's partly due to fears that whatever tariffs are
eventually implementable drive up inflation. It's partly because of Trump
meddling with the independence of the Federal Reserve independence and
trying to face them to cut rates early, and partly
because people trust the US a little less. And the
other thing is, despite this once in a generation trade war,

(01:29):
the US bombing three nuclear sites in Iran resulting in
a twenty percent spike in oil prices, and all those
other abnormal events, equity markets have smasher all Tom Highs again.

Speaker 1 (01:40):
Meanwhile, of course, the chair of the United States Federal Reserved,
Jerome Powell, has made a decision today to hold US
interest rates. So he's still concerned about inflation, isn't he
and the effect of the tariffs.

Speaker 2 (01:53):
Yeah, that's right. And he's not buckling to the political
pressure that Trump is putting on him. I think Trump's
called him a loser and his to make another mistake.
I think he might have even called him stupid at
some stage, which is quite ironic actually. So, yeah, he
hasn't buckled depression. And that's that's critical because the independence
of a Central Bank from politics is absolutely critical to

(02:13):
the credibility of a nation. And the very fact that
Trump is meddling and there is a probability that Jerome
Power would buckle to that pressure is one of the
reasons why we see interest rates in the US sort
of abnormally high at this point in the cutting cycle.
And it's one of the reasons why I've seen such
a weak US dollar.

Speaker 1 (02:31):
And meanwhile, the nacid prices and equity prices. I know,
I know some people have made a fortune enugh rocket
there because business continues. They got some contracts, so some
of our equities are soaring, others are sinking. It's all
over the shop, that's right.

Speaker 2 (02:46):
And you mentioned AI at the start, and that that
big trade got a bit over its skis a bit
bubbly late last year, turned from boom to bus for
a while. You might remember we talked about it in
this program. This draw that broke the camel's back back
and Nary February was that that Chinese company Deep Seek
could allegedly build an AI model a fraction of the
cost of the US big tech guys, and in the

(03:07):
AI trade got a real kicking during the trade spat
with China. Now that dust is cleared, the deep seat
claims were a little misleading, and corporates around the world
world have really started clamoring for things like AI agents,
which is a use case for all this investment in
AI to answer calls or automotive simple processes. And the

(03:29):
AI bubble is fully formed again. And actually Microsoft, speaking
of equities, are doing well. Andrew reported earnings a few
hours ago and absolutely knocked it out of the park.
So their data center business is Your now a huge business,
sort of one hundred billion dollar business, and growth is
actually accelerating, so it's now growing forty percent as companies

(03:51):
around the world rushed to implement AI and influence their
AI models on is your okay?

Speaker 1 (03:58):
So why didn't interesting first half? So what can we
expect in the second half or is it expect the unexpected?

Speaker 2 (04:07):
Well, that's exactly what I would say, so that we
need to get used to this abnormality we seem to
have once in multi decade events every couple of years.
And I do think part of that is the global
economy is still finding its feet after the savage shock
of COVID, believe it or not. Part of that is
the pace of technological change, especially with AI set to
disrupt businesses around the world. Part of that is probably

(04:28):
the political environment. But the lesson we did learn the
first half and before we got to the second half,
is don't sweat the macro too much. More often than not,
i'd say you've probably got a better seventy five percent
hit rate on this is when extraordinary macro events happen,
the market overreacts and it's a great buying opportunity for
long term investors. As for the second half, it shouldn't

(04:51):
be ignored that sentiment has turned from that super bearish
sentiment we talked about back in April to now showing
signs of a ration and exuberance. And when you consider
in the second half, we have to navigate, among other things,
final clarity on Trump's tariff outcomes for the globe on
August first, assume he doesn't give another grace period, and

(05:12):
economists think that could still drag US or global growth
by anywhere from one to three percent. You shouldn't lose
sight of the fact that the water is certainly slotted
to the bullish end of the bathtub.

Speaker 1 (05:23):
WHOA, what a lovely turn of phrase. And on that
wonderful piece of English. We're going to leave you, Sam
Dicky from Fisher Funds, and thank you for your time.

Speaker 2 (05:30):
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