Greg Smith: Devon Funds Management representative on Global PMIs, the luxury brand that is soaring, and why things are looking up in the red meat sector in NZ

The United States has stood out as the only major economy experiencing significant expansion amid Global PMIs. 

The economic health indicator was a mixed bag for manufacturing and service sectors. 

Meanwhile, luxury brand Burberry has soared 10% on its quarterly update. 

And back home, why are things are looking up for the red meat sector? 

Devon Funds Management representative Greg Smith joins the show to talk all things business. 

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Episode Transcript

Speaker 1 (00:00):
It is Monday morning. Grigsmith here, Devin Funds Management, Greg,
Good morning mornings. You're right, the PMI is a bit
of a mixed bag stand out the US.

Speaker 2 (00:08):
Yeah, absolutely, this is manufacturing and services activity globally, so
we've seen a number of prints here, so EU US
is going pretty well. That will will be pleasing to
trump the manufacturing sector that's no longer going backwards. Services
sector at nine months low, but still an expansion territory.
So yeah, optimism is pretty high in the US. You know,
the trump up appears to be wide ranging. If you

(00:28):
look at the joint services and manufacturing outlock, it's actually
the highest since May twenty twenty two, So yeah, US
based businesses have got a positive view of things. A
little bit of a different story in Europe this is
activity did get back to grow for the first time
in five months, but yeah, a bit of a mixed bag.
Germany doing well, France less, so the factory sector can

(00:49):
stall in contraction mode, but a little bit less than
it was in the UK. The things in positive territory,
but again just obviously concerns over the budgets still in
a bit of a case of the manufacturing sector remaining
contract in the services sector expanding more. So it's a
bit of a theme outside of the US. Generally Japanese
factory activity that contracted a bit more services did a

(01:09):
bit better than expected. This has given the central making
a bit more Wiggorouno raised rates, so they did so
on Friday, increased rates to zero point five percent. But
that's the highest in seventeen years. China is still a
picture of weakness, particular in the manufacturing sectors. That's a
little bit of odds of some of the positive data
that I've seen lately on those stimulus impacts. And looking

(01:30):
across the Tasman the factory p MI in Australia contracted
lease in January and in fact it's barely contracting at
all now. Services sector expanded at a slower pace, and
then we all compare this to a least positive situation.
Of course, New Zealand we talked about that last week.
Manufacturing sector year in contraction for twenty two consecutive amnths.
Services sector is a bit of a standout amongst their partners,

(01:52):
but in a bad way, and that it's still going
backwards for ten months now. So let's get those rate
cats going one.

Speaker 1 (01:58):
I'm speaking my language, Berbery. Their demand is up for
their goods and their share price has jumped as well.
Obviously the host has been busy on his holiday.

Speaker 2 (02:08):
Clearly he has been. Yes, she's a ten percent there
on Friday. Year back in Vogue, it's had a bit
of a checkered time of it over the last year
or so. But sales and three months of deceend but
they declined four percent, but they had forecasts to a
decline of twelve percent, so that was a lot better
than expected. The festive shopping period went pretty well. And
again I suppose consistent with some of the avadad and

(02:30):
just talked about sales ticked up in America America. This
is a bit of a resurgency here across the luxury
could set down as a view that you know, Trump's
initials will keep that spending go. I mean, when we
look at Bary in particular, it's had four CEOs of
the past decade, actually been around for in the nearly
one hundred and seventy years, so they've got another CEO
having a crack trying to reinvigorate things. I mean, Data

(02:52):
of course very much an iconic brand, but did get
dealt a bit of a blow to its image as
the working class sort of got into the check and
stuff from the nineties and two thousands. But they're looking
to appeal to wider market, it seems, are lowering pricing,
they're focusing on promoting quality in the heritage of its products.
So we'll see how it goes. But generally the actually
a good sector rund appears to be turning around here.

(03:12):
Carti owner Richmond also have the highest quarterly sales ever,
so yeah, things are turning around.

Speaker 1 (03:18):
Of bit interesting back home. Things looking up for the
red meat sector.

Speaker 2 (03:23):
Yeah, that's right. So yeah, we know that pricing is
going pretty well in the dairy sector, but it's also
looking up for red meats. This is rubberbanks twenty twenty
five Global Animal Protein Outlook, and it just talked about
pricing picking up on a low production Smaller herds sees
beef production declining six percent, and twenty twenty five points
out that beef was a money maker for New Zealand

(03:43):
red meat exports last year. Farmgate returns climb to twenty
percent above five year averages. It's on track to remain
there this year. There's some moftionial drivers here to production
in the US that's contracting, also slowing the likes of
Brazil and China. That's good news for our red meat
farmer is going to help them. In a little bit
of a different story. For sheep, meat returns were down

(04:04):
seven percent last year despite volumes being up. Prices at
are cyclical lower. In fact, there as much as twenty
percent below five averages. But yeah, good news here as well.
Ryan pricing has improved recently, and we've also got higher
volumes going to markets outside of China, particularly the US,
Europe and the UK. And also we've got declining cheap
numbers as well, so that's sort of flying through to pricing.

(04:28):
They also pointing out the animal production. Animal protein production
over all this year is set to grow, driven by poultry.
Also a bit of a rebound in seafood, and I
guess the week of Kiwi dollar is also good news
for our egg exporters. The wild card and all this.
You know, what does Trump do and what have had
a protections measures play out? Well, I guess we have
to wait and see there.

Speaker 1 (04:46):
Yeah, we'll take the good news for now, though, won't we.
Let's take a look at the numbers green.

Speaker 2 (04:50):
Yeah, So the US markets paused on Friday in terms
of the rally, but ye had a good week, back
to back weekly gains. So downdown point three percent, forty
four four to two four s and P five hundreds
down point three percent, Nare's thatck down half percent, foot
Sea down points seven percent, the NICKA was down point
one percent in Japan. The ASEX two hundred was down
point four percent. Across the Tasman INSX fifty we were

(05:12):
down point three percent thirteen zero two four. Notable movie
was similarly it was nineteen percent. Back to profitability, it seems.
And the commodity markets goal was at fifteen dollars twenty
seven hundred and seventy and ounce oil flat seventy four
spots sixty six a barrel. Just in the currency market,
it's the key. We was up against the US fifty
seven point one, were also up against Ozzie ninety point

(05:33):
four and against stealing were down half percent forty five
point seven. This week plenty going on. We've got trade data,
business consume conference reads, it's naturally. We've got OS inflation,
US inflation, European GBGDP. We've got the ECB rate decision.
Of course, we've got the FED meeting as well, and
you look at earnings. Lots going on in big tech thereon.
We've got numbers from Microsoft, Meta, Tesla and Apple.

Speaker 1 (05:55):
All the big ones. Thanks so much, Greg, Greg Smith,
Devins Funs Management.

Speaker 2 (05:58):
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