Sam Dickie: Fisher Funds expert on how investors can respond to the ongoing global uncertainty

2025 has been regarded as a challenging year for economic forecasting, with experts stumped about what decisions to make.

Traditional indicators have been regarded as contradictory, but one expert's developed a workaround.

Sam Dickie from Fisher Funds explains further.

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Episode Transcript

Speaker 1 (00:00):
Heller Duper.

Speaker 2 (00:01):
We are living through one of the most challenging periods
for economic forecasting in decades. Traditional indicators are pretty much
contradictory at the minute. Sam Dickey from Fisher Funds is
with me on this, Hey, Sam, hey EIM I mean
it is confusing and contradictory at the minute, isn't it?

Speaker 1 (00:15):
It is very confusing in contradictory. A good example of
that actually is if you dive beneath the headline growth
numbers to the real time data. So two arms of
the Federal Reserve in the US, the New York Federal
Reserve and the Atlanta Fed, calculate essentially a daily GDP number,
and they have slightly different calculation methods. But before COVID,
those differences were sort of plus and minus one percent apart,

(00:38):
and since COVID they're more like plus or minus three
percent apart. So forecasting era has tripled. And those are
essentially insiders versus the average punter on the street. And
they're both arms of the Federal Reserve with similar forecasting techniques.
And if you listen to people like Capital Economics, the IMF,
the World Bank all are complaining that forecasts are as

(00:59):
free agile as they've seen in decades. And you and
I have spoken about the reasons why. The primary reason
is global economic policy uncertainty indexes. Well, they have eased
a little bit, are still near fifty year high, so
that policy whiplash continues.

Speaker 2 (01:13):
Yeah, So where are we at do you think in
the global and local economic.

Speaker 1 (01:17):
Cycle critical juncture? I think in tons of dispersion. So
the US growth has generally been pretty robust, it's held
the world up, still growing around three percent. That we're
sort of multi speed over there. So the consumer is
still in the game. Thankfully, seventy two percent of GDP
is the consumer, and so MasterCard gives us that sort

(01:38):
of wonderful bird's eye view of the global consumer. And
they just said last week consumer spinning remains healthy, supported
by wage growth that continues to outpace inflation. Of course,
anything related to tech and AI is booming, but the
manufacturing sector is in contraction. Europe is kind of limping
along at about half percent growth despite the spinning that's

(02:00):
going into defense and infrastructure over there. China threw a
ton of stimulus at its economy as it slowed last year,
and I spoke about this and we saw a bit
of a pickup, so that's grown about five percent, and
back here in New Zealand we sort of hunting for
those green shoots. So in short, US robust but slowing,
Europe and New Zealand limping along the bottom, and China's
still healthy at five.

Speaker 2 (02:20):
Percent and where to from here?

Speaker 1 (02:23):
The US is creaking. It's been underpinned by a really
strong labor market for years and I'm sure your listeners
are aware. Last week we saw not only the current
month jobs number hit recessionary type territory, but they revised
down the previous two months to recession type levels as well,
so only adding fifty thousand jobs a month. And we're

(02:44):
hearing that from companies too. But Jamie Diamond, the CEO
of JP Morgan, reminded us that as employment falls, obviously
you will see more stress on the consumer in the
second half. And China growth is still pretty robust and
they definitely stand ready to throw more stimulus added of things.
And Europe and New Zealand they'll find it hard to
grow rapidly if the US slows, But they are at

(03:06):
very very different points in the cycle bouncing along the bottom,
and there are green shoots and things like tourism and
agricultural exports.

Speaker 2 (03:13):
Yeah, which is good news, I suppose. So what should
investors take from all this? What should they make of it?

Speaker 1 (03:18):
Well, given how bullish sentiment is and how hard the
stock markets are bounced in the last few months, the
next few months could be trickier, as markets will be
much more sensitive to any deterioration in the macroeconomic picture.
But they're really really good news is either the Federal Reserve.
The US Central Bank has tons of room to cut
rates in the US, so the amount that inflation is moderated,

(03:39):
the feed could probably cut rates by another one hundred
to one hundred and fifty basis points, but it's been
stubbornly on hold, worried about Tariff's reigniting price pressures. But
they're kind of running out of reasons not to cut rates.
So last Friday, after that week's jobs number, the market
kind of did the job for them and priced at
another two rate cuts. So there there is some a

(04:01):
cushion there if things do slow on the second half,
as you should probably expect. Sam.

Speaker 2 (04:05):
Thanks so much, mate, I enjoy your evening. Sam Dickey
Official funds.

Speaker 1 (04:10):
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