June 23, 2024 • 5 mins
The Purchasing Managers’ Index (PMI) has been very low in New Zealand – but it’s finding life in the United States services sector.
JMI Wealth Director Andrew Kelleher told Mike Hosking “We’ve had some pretty poor data recently.”
Kelleher said “It’s another set of statistics reminiscent of the GFC – that's the space we’re in.”
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Episode Transcript
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Speaker 1 (00:00):
From JMI Wealth Andrew Keller had good Monday morning.
Speaker 2 (00:03):
Yeah, very good morning to you, Mike.
Speaker 1 (00:04):
Now we've got international reads on services and manufacturing and
they seem to be going one way as a post
in New Zealand, which is going the other.
Speaker 2 (00:11):
Yeah, at a little bit mixed with shifting the focus
offshore this morning. We've had some pretty poor, shall we
use the word poor data recently. Yeah, a week or
so ago we had our PMI and PSIZE, which is
our services and manufacturing sector barometers. Yeah, they were awful.
Another set of statistics that the sort of reminiscent of
(00:34):
the economy post the GFC. That's the sort of space
we're in. So the PMI was forty three, the PMI
was forty seven point two, so both very weak, and
within them the forward looking indicators like new ors et cetera,
where especially were or are especially concerning. So late last
week we got an update on these indicators from around
the world. And the issue here, Mike is that we looked,
(00:54):
we looked at that stage very out of sync. So
we've got an update on this relative performance. So the
US SMP global PMI fifty one point seven, it's expanding.
It actually improved from fifty one point three. The services
PMI fifty five point one. Our one was what were
we forty three? That was up from fifty four point eight.
(01:14):
So the US services sector print was the fastest pace
of US activity for the service sector in more than
two years. They do this composite and nex roll, the
two of them together, that ticked up to a twenty
six month high. Now, while this is potentially not what
the Fed wants to see, you know that sort of
economic strength. Embedded in the report was evidence of price
(01:35):
pressures easing and cooling. So composite measure of prices eased
to the second lowest level since twenty twenty in growth
and inputs costs also called so this sort of soft
landing scenario unlikely as it seems, could still occur. Not
so good in Europe's slump and manufacturing sector. Their services
sector held it well, but manufacturing forty five point six.
(01:56):
They were expecting that to come into forty seven point nine.
The service sector has said an expansion. France looking particularly weak.
You've now got to overlay political uncertainty there as well.
Japan also a little bit weaker, services sector dipping into
a contraction for the first time in about two years,
albeit just forty nine point eight, and the UK. The
UK make both of those indicators P mips I both
(02:18):
above fifty. So there's evidence of softening numbers around the world,
but the US stands out as being much more resilient
than other economies, and our numbers still look grim by comparison.
Speaker 1 (02:30):
Yes they do. And part of that story is, of
course retail and Catman do cam in g They've had
a roller coaster over the last few years, haven't they.
Speaker 2 (02:37):
Well, yeah, but it's a roller coaster that's just not
there's no uphill bits, it's all downhill bits. So the
another earning guidance out on Friday from the retail sector
to Catman do remember what I mentioned the other day,
Mike that when you get one of these, you're often
looking for the next one. Well, this is the situation here.
So a situation update from cat Man do not unexpectedly
sales are softer than they had been expecting. So you're
(02:59):
looking at the first four months of the second half
of their financial year. Their financial year goes to thirty
one July. Look, there was a sort of a positive
spin on this because in the announcement because they've got
the three brands Ripkel, Catman doing O Bos, Obos being
the outdoor sort of hiking footwear that Rip Curl and
Catman do. Their sales have been an improvement on the
(03:21):
first half sales trend which was very weak, So the
second half not quite as bad as the first half,
but the sales are slower than had been expected, so
you've got a slower start to the key winter promotional period.
The first three weeks of the winter sale of their
winter sale are eleven and a half percent below last year.
That's quite a big chunk. New Zealand is notably weaker
(03:44):
than Australia. Look Catman do maybe losing the competitive hrase
to people like mack Pack, but the retail environment son
is very tough and not going to turn around the
short term. Rip Curl continues to be a bit more
resilient than the Capmen doing Obos brands, So second half
so far five point nine percent fall in sales, but
Obos down over twenty one percent. They're now expecting fully
(04:05):
runings to be approximately fifty mil that's below recent analyst forecasts.
They've had to go to their banks and renegotiate their
banking covenants share prices at forty cents. It's down about
forty seven percent so far this year.
Speaker 1 (04:20):
Give us the other numbers.
Speaker 2 (04:21):
Well, the Dale Jones on Friday went up, went up
fifteen points, was not much thirty nine, one hundred and fifty.
The S and P five hundred was down small five
four sixty four, and then AS that was also down
small point one eight percent. Seventeen thousand, six hundred and
eighty nine. The footy one hundred eight two three seven
down point four to two percent. Nick A barely moved
three eight five nine six, the Shanghai composite down about
(04:46):
a quarter percent, two nine nine eight, the A six
as X two hundred seven seven nine five. It was
up twenty seven points on Friday, but we lost eighty
nine points. On the internets, fifty three quarters of percent
were now lower than we were at the state. Out
of the eleven thousand, six hundred and eighty two one
Kiwi dollar point six one one six against the US
(05:06):
put nine two oh seven, Ozzi zero point five seven
one nine, Euro point four eight three four pounds ninety
seven point six six, Japanese end goal is at two thousand,
three hundred and twenty one dollars and break crowd close
the week out above eighty five bucks, eighty five dollars
and twenty four cents.
Speaker 1 (05:22):
Oh well, make catchup tomorrow. Appreciateor Andrew kelliherjmiwealth dot co
dot m z. For more from The Mic Asking Breakfast,
Listen live to News Talks B from six am weekdays,
or follow the podcast on iHeartRadio
From JMI Wealth Andrew Keller had good Monday morning.
Speaker 2 (00:03):
Yeah, very good morning to you, Mike.
Speaker 1 (00:04):
Now we've got international reads on services and manufacturing and
they seem to be going one way as a post
in New Zealand, which is going the other.
Speaker 2 (00:11):
Yeah, at a little bit mixed with shifting the focus
offshore this morning. We've had some pretty poor, shall we
use the word poor data recently. Yeah, a week or
so ago we had our PMI and PSIZE, which is
our services and manufacturing sector barometers. Yeah, they were awful.
Another set of statistics that the sort of reminiscent of
(00:34):
the economy post the GFC. That's the sort of space
we're in. So the PMI was forty three, the PMI
was forty seven point two, so both very weak, and
within them the forward looking indicators like new ors et cetera,
where especially were or are especially concerning. So late last
week we got an update on these indicators from around
the world. And the issue here, Mike is that we looked,
(00:54):
we looked at that stage very out of sync. So
we've got an update on this relative performance. So the
US SMP global PMI fifty one point seven, it's expanding.
It actually improved from fifty one point three. The services
PMI fifty five point one. Our one was what were
we forty three? That was up from fifty four point eight.
(01:14):
So the US services sector print was the fastest pace
of US activity for the service sector in more than
two years. They do this composite and nex roll, the
two of them together, that ticked up to a twenty
six month high. Now, while this is potentially not what
the Fed wants to see, you know that sort of
economic strength. Embedded in the report was evidence of price
(01:35):
pressures easing and cooling. So composite measure of prices eased
to the second lowest level since twenty twenty in growth
and inputs costs also called so this sort of soft
landing scenario unlikely as it seems, could still occur. Not
so good in Europe's slump and manufacturing sector. Their services
sector held it well, but manufacturing forty five point six.
(01:56):
They were expecting that to come into forty seven point nine.
The service sector has said an expansion. France looking particularly weak.
You've now got to overlay political uncertainty there as well.
Japan also a little bit weaker, services sector dipping into
a contraction for the first time in about two years,
albeit just forty nine point eight, and the UK. The
UK make both of those indicators P mips I both
(02:18):
above fifty. So there's evidence of softening numbers around the world,
but the US stands out as being much more resilient
than other economies, and our numbers still look grim by comparison.
Speaker 1 (02:30):
Yes they do. And part of that story is, of
course retail and Catman do cam in g They've had
a roller coaster over the last few years, haven't they.
Speaker 2 (02:37):
Well, yeah, but it's a roller coaster that's just not
there's no uphill bits, it's all downhill bits. So the
another earning guidance out on Friday from the retail sector
to Catman do remember what I mentioned the other day,
Mike that when you get one of these, you're often
looking for the next one. Well, this is the situation here.
So a situation update from cat Man do not unexpectedly
sales are softer than they had been expecting. So you're
(02:59):
looking at the first four months of the second half
of their financial year. Their financial year goes to thirty
one July. Look, there was a sort of a positive
spin on this because in the announcement because they've got
the three brands Ripkel, Catman doing O Bos, Obos being
the outdoor sort of hiking footwear that Rip Curl and
Catman do. Their sales have been an improvement on the
(03:21):
first half sales trend which was very weak, So the
second half not quite as bad as the first half,
but the sales are slower than had been expected, so
you've got a slower start to the key winter promotional period.
The first three weeks of the winter sale of their
winter sale are eleven and a half percent below last year.
That's quite a big chunk. New Zealand is notably weaker
(03:44):
than Australia. Look Catman do maybe losing the competitive hrase
to people like mack Pack, but the retail environment son
is very tough and not going to turn around the
short term. Rip Curl continues to be a bit more
resilient than the Capmen doing Obos brands, So second half
so far five point nine percent fall in sales, but
Obos down over twenty one percent. They're now expecting fully
(04:05):
runings to be approximately fifty mil that's below recent analyst forecasts.
They've had to go to their banks and renegotiate their
banking covenants share prices at forty cents. It's down about
forty seven percent so far this year.
Speaker 1 (04:20):
Give us the other numbers.
Speaker 2 (04:21):
Well, the Dale Jones on Friday went up, went up
fifteen points, was not much thirty nine, one hundred and fifty.
The S and P five hundred was down small five
four sixty four, and then AS that was also down
small point one eight percent. Seventeen thousand, six hundred and
eighty nine. The footy one hundred eight two three seven
down point four to two percent. Nick A barely moved
three eight five nine six, the Shanghai composite down about
(04:46):
a quarter percent, two nine nine eight, the A six
as X two hundred seven seven nine five. It was
up twenty seven points on Friday, but we lost eighty
nine points. On the internets, fifty three quarters of percent
were now lower than we were at the state. Out
of the eleven thousand, six hundred and eighty two one
Kiwi dollar point six one one six against the US
(05:06):
put nine two oh seven, Ozzi zero point five seven
one nine, Euro point four eight three four pounds ninety
seven point six six, Japanese end goal is at two thousand,
three hundred and twenty one dollars and break crowd close
the week out above eighty five bucks, eighty five dollars
and twenty four cents.
Speaker 1 (05:22):
Oh well, make catchup tomorrow. Appreciateor Andrew kelliherjmiwealth dot co
dot m z. For more from The Mic Asking Breakfast,
Listen live to News Talks B from six am weekdays,
or follow the podcast on iHeartRadio
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