The US election is heating up and it's still unclear whether or not Harris or Trump will emerge victorious in November.
Based on recent polling data, financial markets are pricing in a Trump-led Government - a pivot from the projected Harris Government.
Harbour Asset Management's Shane Solly says investors are increasingly expecting a divided Government, as it's unlikely one party will control the Presidency, House and Senate.
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Speaker 1 (00:00):
Now Shane solely harbor asset management is with US right now,
has Shane? I hear that now on the US election,
right got the polls starting to look like it's going
to be a Republican dominated government and Trump's going to win.
How are the capital markets reacting to this?
Speaker 2 (00:13):
Yeah, the polling is getting close, and I think you know,
we have gone from pricing in a Harris Democrat government
to starting the price of Trump Republican government. But this
is also thinking about this is going to be a
divided government, one party not controlling a presidency, House and Senate,
so that means that to some degree they can kind
of knock each other out or significantly modify the policy.
(00:33):
But yeah, the market's really focus on what does the
Trump government mean for tax, trade, tariff's, labor, immigration, those
sicky things, and we know that historically that are Republican.
When shi market likes it, there's a lot of tacks.
The US dollar teams to go up, and that's what
we've seen in the last few weeks. But we've also
seen long term government bond years in the US go up.
(00:54):
They've been going down. It's been one of the stories
for the last probably six months they're actually going down.
They've been going back up because people worry about what
does the tariff mean for inflation? So look, you know,
we think there's a lot to sort of watch for
at the margin. Even these tariffs are a risk for China, right,
and so some of the good policy announcements that China
have talked about big PEPs getting neutralized by the risk
(01:15):
of tariff. So yeah, one way to go. Getting quite
exciting though, and so yeah, the market's jumped from one
side of the ship to the other.
Speaker 1 (01:23):
Yeah, it really is getting quite exciting. Hey, back at home,
we're expecting to hear from both the governor and the
Assistant Governor of the Reserve Bank this week. Are we
expecting much in terms of the.
Speaker 2 (01:32):
Market, Well, I'll be Assistant governor out on Tuesday, ibenz
governor on Wednesday, and we the market are looking for
further indications on official cash rate cuts, and we'll go
what's priced in the markets, assuming there'll be a point
eight five eight, so just under point six percent cut
to official rates in November. That's kind of like I
normally we go twenty five basis points or point two five,
(01:53):
so more than a half a percent less than point
seven five percent, So the market is saying, yeah, it
needs to be more than half. Maybe not enough. Karen Silp,
Assistant Governor, spoke last week at a really well attended
City Group presentation on Australasian equities or in economies. She
did a good job, but she didn't give a lot away.
She talked it out. I might have done it. Almost
(02:15):
came close to a little jig when CPI figures showed
they got back to two point two, But I don't
know if she did the jig or not. She talked
about it. Look, you know residential properly real estate guys,
they might be getting excited about lower Mullers rates, but
I think we all know, and I know you've pointed
this out here there is it takes time for this
lower rates to work their way through the system. Could
take a year. So now we're looking at a reserve
(02:37):
bank who might be tempted to be about gradual because
of inflation is not quite in the target, but today
we had to be. And ZID are reporting New Zealand
job ads felt half a percent of the last month.
So the New Zealand economy, it's still slow and we
still need to see rate cups coming through. Yeah.
Speaker 1 (02:53):
Absolutely, Hey, we are well into annual shareholder meeting season.
What are you expecting from the meetings that we're going
to have this week?
Speaker 2 (03:00):
Yeah, Look, and your Shield of Meetings, they're in addition
to providing a great platform for shihelders to take companies
to account boards and management, they are quite an important
opportunity to get a snapshot on where the companies are
traveling in terms of profitability and also to get an
idea where the economy is. This week we've got eleven
companies with the annual Shield of Meetings. Wednesday we've got Ebos,
(03:22):
Fletcher Building, Freightways, Property of Industry. Tuesday we've got Chorus
Scatter up in winter, and Friday we've got Porta Terrara,
So we've got quite a cross section of different sources
of how is the economy going, how is your profitability traveling?
So yeah, actually a lot of scrutiny more than normal
because we are looking to see if we're at the
bottom yet, whether there's a turning point. So a lot
of focus on there and your Shield of Meetings this week.
Speaker 1 (03:44):
Yeah, good stuff. Hey, Shaneanks for running us through. We'll
talk to you next week that Shane solely as per usual,
on a Monday of Harba Asset managements.
Speaker 2 (03:51):
For more from Heather Duplessy Alan Drive, listen live to
news talks they'd be from four pm weekdays, or follow
the podcast on iHeartRadio
Now Shane solely harbor asset management is with US right now,
has Shane? I hear that now on the US election,
right got the polls starting to look like it's going
to be a Republican dominated government and Trump's going to win.
How are the capital markets reacting to this?
Speaker 2 (00:13):
Yeah, the polling is getting close, and I think you know,
we have gone from pricing in a Harris Democrat government
to starting the price of Trump Republican government. But this
is also thinking about this is going to be a
divided government, one party not controlling a presidency, House and Senate,
so that means that to some degree they can kind
of knock each other out or significantly modify the policy.
(00:33):
But yeah, the market's really focus on what does the
Trump government mean for tax, trade, tariff's, labor, immigration, those
sicky things, and we know that historically that are Republican.
When shi market likes it, there's a lot of tacks.
The US dollar teams to go up, and that's what
we've seen in the last few weeks. But we've also
seen long term government bond years in the US go up.
(00:54):
They've been going down. It's been one of the stories
for the last probably six months they're actually going down.
They've been going back up because people worry about what
does the tariff mean for inflation? So look, you know,
we think there's a lot to sort of watch for
at the margin. Even these tariffs are a risk for China, right,
and so some of the good policy announcements that China
have talked about big PEPs getting neutralized by the risk
(01:15):
of tariff. So yeah, one way to go. Getting quite
exciting though, and so yeah, the market's jumped from one
side of the ship to the other.
Speaker 1 (01:23):
Yeah, it really is getting quite exciting. Hey, back at home,
we're expecting to hear from both the governor and the
Assistant Governor of the Reserve Bank this week. Are we
expecting much in terms of the.
Speaker 2 (01:32):
Market, Well, I'll be Assistant governor out on Tuesday, ibenz
governor on Wednesday, and we the market are looking for
further indications on official cash rate cuts, and we'll go
what's priced in the markets, assuming there'll be a point
eight five eight, so just under point six percent cut
to official rates in November. That's kind of like I
normally we go twenty five basis points or point two five,
(01:53):
so more than a half a percent less than point
seven five percent, So the market is saying, yeah, it
needs to be more than half. Maybe not enough. Karen Silp,
Assistant Governor, spoke last week at a really well attended
City Group presentation on Australasian equities or in economies. She
did a good job, but she didn't give a lot away.
She talked it out. I might have done it. Almost
(02:15):
came close to a little jig when CPI figures showed
they got back to two point two, But I don't
know if she did the jig or not. She talked
about it. Look, you know residential properly real estate guys,
they might be getting excited about lower Mullers rates, but
I think we all know, and I know you've pointed
this out here there is it takes time for this
lower rates to work their way through the system. Could
take a year. So now we're looking at a reserve
(02:37):
bank who might be tempted to be about gradual because
of inflation is not quite in the target, but today
we had to be. And ZID are reporting New Zealand
job ads felt half a percent of the last month.
So the New Zealand economy, it's still slow and we
still need to see rate cups coming through. Yeah.
Speaker 1 (02:53):
Absolutely, Hey, we are well into annual shareholder meeting season.
What are you expecting from the meetings that we're going
to have this week?
Speaker 2 (03:00):
Yeah, Look, and your Shield of Meetings, they're in addition
to providing a great platform for shihelders to take companies
to account boards and management, they are quite an important
opportunity to get a snapshot on where the companies are
traveling in terms of profitability and also to get an
idea where the economy is. This week we've got eleven
companies with the annual Shield of Meetings. Wednesday we've got Ebos,
(03:22):
Fletcher Building, Freightways, Property of Industry. Tuesday we've got Chorus
Scatter up in winter, and Friday we've got Porta Terrara,
So we've got quite a cross section of different sources
of how is the economy going, how is your profitability traveling?
So yeah, actually a lot of scrutiny more than normal
because we are looking to see if we're at the
bottom yet, whether there's a turning point. So a lot
of focus on there and your Shield of Meetings this week.
Speaker 1 (03:44):
Yeah, good stuff. Hey, Shaneanks for running us through. We'll
talk to you next week that Shane solely as per usual,
on a Monday of Harba Asset managements.
Speaker 2 (03:51):
For more from Heather Duplessy Alan Drive, listen live to
news talks they'd be from four pm weekdays, or follow
the podcast on iHeartRadio
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