President-elect Donald Trump's latest policy announcements continue to have an impact on capital markets.
Trump's pick of Scott Bessent as Treasury Secretary sent long-term Government bond yields lower and the US share market higher - as investors felt more confident in a 'seasoned' choice taking on the role.
However, his threated tariffs on China, Canada and Mexico created a divided response among investors.
Harbour Asset Management's Shane Solly unpacked the 'mixed' reactions to Trump's latest announcements.
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Speaker 1 (00:00):
Shane solely from Harbor Asset Management is with us this
evening go out of Shane. Let's take a little bit
of a look at the markets and are we at
maximum Trump government policy uncertainty for the capital markets now?
Have the capital markets reacted to recent US policy announcements?
Speaker 2 (00:15):
Well, I think the quick quick statement is we're not sure.
We haven't seen anything that could come down the line.
But what we're seeing is President elect Trump as policy announced.
They're certainly causing some choppiness and capital markets, but the
trend has actually been more positive in the headlines. We
actually saw the US shear market, for example, up just
under six percent of November. And one of the things
that happened in the later in the month was mister
(00:37):
Trump picked a guy called Scott percent to be Treasury Secretary,
and he was taken as being a sort of a
seasoned choice that might could stabilize markets and be a
little more considered on terms of terrifs and text cuts.
He actually saw long term bond yards fall, shear marker
go up. But then of course mister Trump doubled down
with his discussion about putting Tarraf's additional terrorists in China,
(00:58):
which we had already thought about, but then slipping under
twenty five percent tariffs on Canada and Mexico, and that
really got people excited. And obviously he's targeting migrants and
legal drugs came across the borders. That that Bush to
add tariffs on to Canada and Mexico, it has implications
for supply chains, even for companies like Fisher and piperarcare
(01:19):
that manufacture O of Mexico. So yeah, it's we're in
for a few more weeks of policy announcements that could
surprise investors. A good example is, you know, whether Robert
IF Kennedy Junior gets confirmed as the Department of Health
and Human Services, and that would cause a little bit
of uncertainty for investors. And I think probably that we've
got to keep watching our Trump media truths social media
(01:41):
platform to find out what mister Trump's going to be next.
Speaker 1 (01:43):
Yeah, back home, Shane, are you seeing signs that the
New Zealand economy might just be reawakening from its slumber
a recent reserve bank rate cuts driving more consumer and
business confidence.
Speaker 2 (01:55):
Yeah, look, I think you know it's a good point
you raised, Jack, that we have sort of weathered one
of the Central Bank interest rate increased cycles globally, when
we look around the world, we really took a better medicine.
But more recently we've seen business and consumer confidence bounced
back in the last few weeks. That is certainly reserved
Bank cutting official rates that reduces the interest costs for borrowers,
(02:17):
but there might be a couple of other factors giving
us a bit of a boost as well. Diairy pretty
solid dairy season, an unusual combination of high volume production
and good firm pricing. And yes, the dairy farmers out
there will be telling me the cost of producing a
gone up, but it's still a benefit and that may
trickle down. We are seeing some signs of recovery in
(02:38):
China's economic activity. It's not huge yet, but even over
the weekend we saw these lead indicators. There's purchasing manager
and this is they were up above fifty, which suggests
the economies at least expanding again after some stimulus that's announced.
And then finally we've had a bit of a next
lot of data on construction activity in New Zealand. We
(02:59):
saw October building permits down five point two percent of
the month down to almost sixteen percent for the twelve
months of October to thirty two thousand starts here in
New Zealand of homes. But against that, we've also seen
a reserve bank he's Marge Landing starting to pick up,
which you saw a thirty percent increase in October in
the same month in twenty twenty three, with investors actually
(03:20):
shown a bit of spy. So it's mixed, but we
are seeing the some green shoots coming through and now
shipmaker here not as exciting as the US market was
actually up three point four percent over the month of November,
so the market looks forward.
Speaker 1 (03:35):
Yeah, So what announcements are you keeping an eye on
this week?
Speaker 2 (03:39):
Yeah, Look, it's going to be another week where we
watch what happens to the US data, particularly job opening
data out tomorrow and on Friday, business and called the
payroll data. And this is all about getting some medications
for what the US Vigul Reserve, which is the US
Central Bank might do with official rates on the eighteenth
of December, and the market sort of unwound expectations of
big cuts. It's only about twenty or point two of
(04:01):
a percent cut in priced in now, so that'll be interesting. Wednesday,
we've got secret you can make data out of Australia
and China, obviously two key trade partners for New Zealand.
We've also got some company yes, similarly the dairy producer
which is seen a little bit of financial pressure recently.
Then due to report to the annual Shield to meet
(04:22):
on Wednesday. We're also going to invest to day from Somerset,
the retirement village operated on Wednesday and again that might
get a bit of insight into their future. Friday we
wrap up with doesn't sound very exciting, but it's actually
quite important. Is the Australian S and p A six
two hundred index, which is the main benchmark Australian investors
used to decide what she is to invest in. And
(04:43):
there's some suggestion that Fletcher Building Spark could be removed
from that, which may actually see some more selling than
those two stocks from Australian investors. So yeah, busy week, Jack.
Speaker 1 (04:52):
Yeah, very good. Hey, thanks Shane, appreciate it. Shane solid
there from Harbor Asset Management. For more from Heather Duplessy
Ellen Drive and Live to News Talks, it'd be from
four pm weekdays, or follow the podcast on iHeartRadio.
Shane solely from Harbor Asset Management is with us this
evening go out of Shane. Let's take a little bit
of a look at the markets and are we at
maximum Trump government policy uncertainty for the capital markets now?
Have the capital markets reacted to recent US policy announcements?
Speaker 2 (00:15):
Well, I think the quick quick statement is we're not sure.
We haven't seen anything that could come down the line.
But what we're seeing is President elect Trump as policy announced.
They're certainly causing some choppiness and capital markets, but the
trend has actually been more positive in the headlines. We
actually saw the US shear market, for example, up just
under six percent of November. And one of the things
that happened in the later in the month was mister
(00:37):
Trump picked a guy called Scott percent to be Treasury Secretary,
and he was taken as being a sort of a
seasoned choice that might could stabilize markets and be a
little more considered on terms of terrifs and text cuts.
He actually saw long term bond yards fall, shear marker
go up. But then of course mister Trump doubled down
with his discussion about putting Tarraf's additional terrorists in China,
(00:58):
which we had already thought about, but then slipping under
twenty five percent tariffs on Canada and Mexico, and that
really got people excited. And obviously he's targeting migrants and
legal drugs came across the borders. That that Bush to
add tariffs on to Canada and Mexico, it has implications
for supply chains, even for companies like Fisher and piperarcare
(01:19):
that manufacture O of Mexico. So yeah, it's we're in
for a few more weeks of policy announcements that could
surprise investors. A good example is, you know, whether Robert
IF Kennedy Junior gets confirmed as the Department of Health
and Human Services, and that would cause a little bit
of uncertainty for investors. And I think probably that we've
got to keep watching our Trump media truths social media
(01:41):
platform to find out what mister Trump's going to be next.
Speaker 1 (01:43):
Yeah, back home, Shane, are you seeing signs that the
New Zealand economy might just be reawakening from its slumber
a recent reserve bank rate cuts driving more consumer and
business confidence.
Speaker 2 (01:55):
Yeah, look, I think you know it's a good point
you raised, Jack, that we have sort of weathered one
of the Central Bank interest rate increased cycles globally, when
we look around the world, we really took a better medicine.
But more recently we've seen business and consumer confidence bounced
back in the last few weeks. That is certainly reserved
Bank cutting official rates that reduces the interest costs for borrowers,
(02:17):
but there might be a couple of other factors giving
us a bit of a boost as well. Diairy pretty
solid dairy season, an unusual combination of high volume production
and good firm pricing. And yes, the dairy farmers out
there will be telling me the cost of producing a
gone up, but it's still a benefit and that may
trickle down. We are seeing some signs of recovery in
(02:38):
China's economic activity. It's not huge yet, but even over
the weekend we saw these lead indicators. There's purchasing manager
and this is they were up above fifty, which suggests
the economies at least expanding again after some stimulus that's announced.
And then finally we've had a bit of a next
lot of data on construction activity in New Zealand. We
(02:59):
saw October building permits down five point two percent of
the month down to almost sixteen percent for the twelve
months of October to thirty two thousand starts here in
New Zealand of homes. But against that, we've also seen
a reserve bank he's Marge Landing starting to pick up,
which you saw a thirty percent increase in October in
the same month in twenty twenty three, with investors actually
(03:20):
shown a bit of spy. So it's mixed, but we
are seeing the some green shoots coming through and now
shipmaker here not as exciting as the US market was
actually up three point four percent over the month of November,
so the market looks forward.
Speaker 1 (03:35):
Yeah, So what announcements are you keeping an eye on
this week?
Speaker 2 (03:39):
Yeah, Look, it's going to be another week where we
watch what happens to the US data, particularly job opening
data out tomorrow and on Friday, business and called the
payroll data. And this is all about getting some medications
for what the US Vigul Reserve, which is the US
Central Bank might do with official rates on the eighteenth
of December, and the market sort of unwound expectations of
big cuts. It's only about twenty or point two of
(04:01):
a percent cut in priced in now, so that'll be interesting. Wednesday,
we've got secret you can make data out of Australia
and China, obviously two key trade partners for New Zealand.
We've also got some company yes, similarly the dairy producer
which is seen a little bit of financial pressure recently.
Then due to report to the annual Shield to meet
(04:22):
on Wednesday. We're also going to invest to day from Somerset,
the retirement village operated on Wednesday and again that might
get a bit of insight into their future. Friday we
wrap up with doesn't sound very exciting, but it's actually
quite important. Is the Australian S and p A six
two hundred index, which is the main benchmark Australian investors
used to decide what she is to invest in. And
(04:43):
there's some suggestion that Fletcher Building Spark could be removed
from that, which may actually see some more selling than
those two stocks from Australian investors. So yeah, busy week, Jack.
Speaker 1 (04:52):
Yeah, very good. Hey, thanks Shane, appreciate it. Shane solid
there from Harbor Asset Management. For more from Heather Duplessy
Ellen Drive and Live to News Talks, it'd be from
four pm weekdays, or follow the podcast on iHeartRadio.
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