September 9, 2024 • 2 mins
Volatility has returned to US markets, with a significant drop on Friday.
Weak employment data saw markets price in larger cuts to US official interest rates by the US Federal Reserve - which is due to meet on the 17th of September.
Harbour Asset Management's Shane Solly explains further,
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Speaker 1 (00:00):
Shane solely Harbor Asset Management has with me. Now has Shane?
Speaker 2 (00:03):
Hi, how are you well?
Speaker 1 (00:04):
Thank you Shan. Let's have anal quick look at the
US first, right, So we've got the interest rates for
the government bonds and the markets falling on Friday.
Speaker 2 (00:10):
What happened? Yeah, Look, we had some weak non farm
payroll data and the markets are jumping around a bit
on economic data points. We're having good data bad data,
and we decided this is bad data. And what we
saw is this expectations of the US Fedual Reserve increasing
its cuts or bringing forwards cuts. It's due to meat
on the seventeenth this week, sorry, next week, we should
(00:31):
say to talk about this. And so the market's now
based on this week economic data dragged forward expectations of cuts,
and so we're actually seeing the two year government bond year,
which is an important bench mark, down at three sixty
five three point six five versus five point two percent
back in October twenty three. At the same time, we
also had Broadcom, which is one of the big semiconductor chipmakers,
(00:53):
come out with a week number on Friday, and that
saw the US shar market come off of it down
one point seven percent. Still up only thirteen percent for
the year, so maybe a little bit of a healthy
correction rather than mountdown. But that certainly caused a bit
of a bit of old tidy.
Speaker 1 (01:08):
And so did this this weakness I suppose impact the
local markets.
Speaker 2 (01:12):
Yeah, it's a good point. Local interest rates pretty stable
and we actually saw the New Zealand shear market up slightly.
In you know, we don't have these big cyclical semiconductor
cell's companies like Infrato for shrimp up with health Care,
Contact Energy, Gin Track, Walk On Airport. They actually we
all up and boosted the ZL market infantile. You know
that share price continues to go strength to strength in
(01:33):
certainly where it's all about data centers, it's all about
being included in Australian shar market indebts.
Speaker 1 (01:39):
Hey, so what are you looking for this week that
you think might influence the markets?
Speaker 2 (01:43):
A big week for polities in the US. Of course,
we've got the Tuesday, the Trump Harris presidential debate. Now
that could just be it's an important catalyst. So obviously
they're running pretty nick and neck at the moment and
capital markets are just looking for any sort of surprise
policy change. Do you think that PEPs they haven't drawn
out earlier. And then on Thsday with the European Central
(02:05):
Bank it is expected to cut interest rates, joining this
central bank club of neutralizing rates to take pressure of
the economy. So everybody's looking at the slowing rate of
economic growth and saying those rates sittings too tight.
Speaker 1 (02:18):
Interesting, Shane, are you going to watch the debate?
Speaker 2 (02:20):
Are you?
Speaker 1 (02:20):
Are you going to be an absolute sucker for this politics.
Speaker 2 (02:24):
I'm a bit of a tragic on this stuff, you know.
It was. It was a great Howard Marks comment on
the weekend about somebody's going to win on this and
I'm not sure even going to be great, And it
was just sort of like, we've got to be aware
of what these policy changes can dig off back, but
let's just hope they can all at least be civilized.
Speaker 1 (02:44):
Well, it's much less fun, Shane, Thank you very much.
I appreciated Shane Solly Harbor Asset Management. For more from
Hither Duplessy Alan Drive, listen live to news talks.
Speaker 2 (02:54):
It'd be from four pm weekdays, or follow the podcast
on iHeartRadio.
Shane solely Harbor Asset Management has with me. Now has Shane?
Speaker 2 (00:03):
Hi, how are you well?
Speaker 1 (00:04):
Thank you Shan. Let's have anal quick look at the
US first, right, So we've got the interest rates for
the government bonds and the markets falling on Friday.
Speaker 2 (00:10):
What happened? Yeah, Look, we had some weak non farm
payroll data and the markets are jumping around a bit
on economic data points. We're having good data bad data,
and we decided this is bad data. And what we
saw is this expectations of the US Fedual Reserve increasing
its cuts or bringing forwards cuts. It's due to meat
on the seventeenth this week, sorry, next week, we should
(00:31):
say to talk about this. And so the market's now
based on this week economic data dragged forward expectations of cuts,
and so we're actually seeing the two year government bond year,
which is an important bench mark, down at three sixty
five three point six five versus five point two percent
back in October twenty three. At the same time, we
also had Broadcom, which is one of the big semiconductor chipmakers,
(00:53):
come out with a week number on Friday, and that
saw the US shar market come off of it down
one point seven percent. Still up only thirteen percent for
the year, so maybe a little bit of a healthy
correction rather than mountdown. But that certainly caused a bit
of a bit of old tidy.
Speaker 1 (01:08):
And so did this this weakness I suppose impact the
local markets.
Speaker 2 (01:12):
Yeah, it's a good point. Local interest rates pretty stable
and we actually saw the New Zealand shear market up slightly.
In you know, we don't have these big cyclical semiconductor
cell's companies like Infrato for shrimp up with health Care,
Contact Energy, Gin Track, Walk On Airport. They actually we
all up and boosted the ZL market infantile. You know
that share price continues to go strength to strength in
(01:33):
certainly where it's all about data centers, it's all about
being included in Australian shar market indebts.
Speaker 1 (01:39):
Hey, so what are you looking for this week that
you think might influence the markets?
Speaker 2 (01:43):
A big week for polities in the US. Of course,
we've got the Tuesday, the Trump Harris presidential debate. Now
that could just be it's an important catalyst. So obviously
they're running pretty nick and neck at the moment and
capital markets are just looking for any sort of surprise
policy change. Do you think that PEPs they haven't drawn
out earlier. And then on Thsday with the European Central
(02:05):
Bank it is expected to cut interest rates, joining this
central bank club of neutralizing rates to take pressure of
the economy. So everybody's looking at the slowing rate of
economic growth and saying those rates sittings too tight.
Speaker 1 (02:18):
Interesting, Shane, are you going to watch the debate?
Speaker 2 (02:20):
Are you?
Speaker 1 (02:20):
Are you going to be an absolute sucker for this politics.
Speaker 2 (02:24):
I'm a bit of a tragic on this stuff, you know.
It was. It was a great Howard Marks comment on
the weekend about somebody's going to win on this and
I'm not sure even going to be great, And it
was just sort of like, we've got to be aware
of what these policy changes can dig off back, but
let's just hope they can all at least be civilized.
Speaker 1 (02:44):
Well, it's much less fun, Shane, Thank you very much.
I appreciated Shane Solly Harbor Asset Management. For more from
Hither Duplessy Alan Drive, listen live to news talks.
Speaker 2 (02:54):
It'd be from four pm weekdays, or follow the podcast
on iHeartRadio.
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