Shane Solly: Harbour Asset Management expert on what the renewed Middle East conflict means for the markets

Reports indicate the ceasefire in the Middle East has been scrapped and the conflict is starting back up again.

The US claims it's struck 140 Iranian military targets in response to an attack on a merchant ship in the Strait of Hormuz.

Iran says it's hit multiple US military sites.

Harbour Asset Management expert Shane Solly explained further.

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Episode Transcript

Speaker 1 (00:00):
And let's talk about business, and let's talk about investment markets.
I'm joined by Shane Solely from Harbor Asset Management. Hello
is Shane?

Speaker 2 (00:07):
Yeah, Hey, how are you going?

Speaker 1 (00:08):
So she's all on Iran and the United States, she's
all wrong with drones being sent to Cuba by Russia,
She's all on everywhere. So what does all this all
on mean for investment markets?

Speaker 2 (00:22):
Yeah? Look, I think we've seen a bit of a
risk off across markets today. Similarly that climb and energy
prices you talked about earlier that increases the odds of
a central bank rate increase. What we saw on Friday,
and this was the market in the US, We're starting
to get a win of something going on. The US
tenure government bond you that ended at four point five

(00:42):
six percent. That's well above where it was in the June,
that was at four point four Investors have started to
price in a bit more sticky underlying inflation risk, but
the risk as they go up tonight here in is
on tenure buyers are up zero point two percent to
four point six two percent, again well up on their
June lows of four point three six. We've seen Asia
Pacific markets roll off the red hot Korean tech market

(01:06):
down eight point eight percent today, that high flying skhnis
down forteen percent, gave back all of Friday's gains. Is
it into the US? As you touched on New zeal
market that week are led by some of our large
caps Fish and Bikeway to Aukan Newport Futures Andrew are
suggesting that we're going to see the U S SHE
market down, the U S and P down half percent,

(01:26):
the nasdack which is takeing you down one point too. Look,
this whole increased geopolitical risk increase, increases uncertainty. And while
we've got a bunch of company reporting coming out the
US that should be okay, this is going to take
some of the risk out.

Speaker 1 (01:42):
Yeah, well it's because it keeps on rolling on. Just
when we think we're out, we're not out, and that
creates even more uncertainty. Now we had to begin z
New Zealand Performance of Service Index for June out today.
First of all, what on earth is a performance of
service index? And was there any good news in it?

Speaker 2 (01:59):
Yeah, there was a array of sunshine. This really measures
how the broad service economy goes, how the confidence levels are,
and we saw a recovery up two point six percent
to fifty point six for above fifty means people are
feeling a bit more optimistic, they're looking to expand they
might look to hire again. Last week we had the

(02:20):
manufacturing performance of manufacturing and the x net jumped to
fifty nine points of the so quite a lot more.
But still this today is it's good. It's about fifty
one of the strongest we've had in the last three years.
All work. You know, we've got a little way to go.
New orders was probably the biggest strongest sub index andrew
up to fifty three, so people are back putting a

(02:42):
mature in the system. It's a big part of the
economy that covers a lot of a lot of manufacture
services business non manufacturing services, so it's important.

Speaker 1 (02:50):
Good Stefan, I thank you so much for your time today.
Shane Solely from Harbord Asset Management.

Speaker 2 (02:54):
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