December 19, 2024 • 6 mins
Over in the US, share prices have slumped after the US Federal Reserve hinted at a slower than expected pace for rate cuts in the new year.
The Federal Reserve set its key lending rate in a target range of 4.25 percent to 4.5 percent - down a full percentage point since September.
Fisher Funds expert Sam Dickie explains further.
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Speaker 1 (00:00):
Quite a tumultuous here in the markets. Fair number of
hits and missus Sam Dickey from Fisher Funds as well.
Then run through it, Sam, Good evening to you.
Speaker 2 (00:07):
Good evening, Ryan.
Speaker 1 (00:09):
We'll get to that in just a second. But first,
the Fed has decided to cut, and the markets have
reacted quite strongly. They don't like it, but not because
of the cut, but because of the slower cutting cycle
that's being forecasted.
Speaker 2 (00:22):
Right, that's right.
Speaker 3 (00:24):
It was a hawkish cut, if that makes sense to you,
So you know, fewer rate cuts projected, and in fact,
the FED raised the forecast for twenty twenty five core inflation,
which is obviously their primary mandate. So the market took
it as quite hawkish and took a lot of rate
cuts out of the curve, and interest rates went up
(00:45):
and equity markets went down.
Speaker 2 (00:48):
Yeah.
Speaker 1 (00:48):
Yeah, interesting that one, because I mean, they're obviously a
bit a bit looser with their monetary policy when it
comes to inflation than we are. I mean, can you
imagine our Reserve Bank making that call if inflation were
so stubborn? Here anyway, we'll go through. We'll go through
the rest of your top six. So we've done Number one.
Number two the Trump bump.
Speaker 2 (01:08):
Yes, and US exceptionalism.
Speaker 3 (01:10):
So we are obviously Trump won and promised three things,
really tax cuts, He promised to get rid of wasteful
red tape, and to cut a lot of fat, lot
of fat out of the federal government, so pretty powerful words.
Speaker 2 (01:21):
The market reacted strongly.
Speaker 3 (01:23):
And let's not forget Rylan that before these fighting words,
the strength of the US economy had been the number
one positive surprise for stock markets for the past eighteen months.
So if we take a step back, the US was
supposed to be in recession by now, according to economists,
eighteen months ago. And then you compare that to the
other big blocks, so China, which continues to struggle under
(01:44):
huge debt burdens and are structurally challenged Europe, so all
of that's known as US exceptionalism, and then we get
the Trump bump. And so astonishingly before today, just to
define what the Trump bump is, since Trump was elected
a few weeks ago, the US stopped, it was up
about seven or eight percent, China was down five, and
Europe was flat. So that is very rare outperformance in
(02:07):
such a short space of time.
Speaker 1 (02:09):
It certainly is, and the Trump bump on the cryptocurrency
has been pretty massive too, hasn't it. Number three. This is,
by the way, if you just joining us Sam Dickey
from Fisher Funds with basically the top six in terms
of market movements for the year. Number three.
Speaker 2 (02:28):
Yeah, well number three.
Speaker 3 (02:29):
I mean it's not necessarily market movements, but sort of
big hits and misses that caught our eye in the
market's eye. So the umbrella reward I guess for down
up in a flash was the japan flash crash. So
it seemed like a very big deal at the time
we spoke about it in August.
Speaker 2 (02:42):
And Japan has been trying to manufacture.
Speaker 3 (02:45):
Inflation really since the Japanese bubble popped about thirty five
years ago, so they kind of piggybacked on the once
in forty years spike and inflation that we're in the
rest of the globe experienced in twenty twenty two to
drive through higher wages. But they were just a little
bit too late, so they tried to raise interest rates
just as the rest of the world was cutting, and
that popped a huge speculative bubble in borrowing Japanese year
(03:08):
at zero percent interest rates and investing that money around
the world and hot assets, and because of that kind
of countertrend rate rise by the BOJ, the Japanese equity
market had has worst down day in thirty five years,
down twelve percent on the day, but it's recovered all
of that lost ground because the BOJ said it wouldn't
raise interest rates anymore until financial termol had calmed down.
Speaker 1 (03:31):
Number four. You've got humanoids here? Are they going to
be a big deal?
Speaker 2 (03:36):
Yes?
Speaker 3 (03:37):
I meet George sitson a little bit of left field there, Ryan,
just to sort of keep us on our toes, But yeah,
I mean, so what is a humanoid. It's a robot
that looks like a human and is designed to copy
human actions, so like walking upright and using its fingers,
because the world is built for humans. Now, there are
only four million robots in operation today. But you've got
(03:57):
to remember, over the next twenty five years, the keen
age population is going to shrink by about three hundred
million people.
Speaker 2 (04:03):
So it's a big deal.
Speaker 3 (04:04):
And in theory, we need to replace those workers, so
we're going to need hundreds of millions of these humanoids.
Speaker 2 (04:10):
So it's a really early stage thematic to keep an
eye on.
Speaker 1 (04:14):
Very interesting. Number five the award for market Darling is
passing from in Vidia to Tesla.
Speaker 2 (04:19):
Why yes, super interesting.
Speaker 3 (04:22):
So up until Trump got elected, for the year, the
Nvidia stop price was up about one hundred and eighty percent.
This is on November fourth day before he got elected,
and Tesla was flat for the year, so huge dispersion there.
And in the few weeks since Trump got elected, Nvidia
is down five percent and Tesla's up eighty percent. So
in short, it pays to be a friend of Trump.
(04:42):
And of course Musk is promising to run the Department
of Government Efficiency, which if you think about that acronym,
it's dodge, where he will go into the federal government
and rip out two trillion dollars of wasteful spending and implicitly,
because this is not explicitly, implicitly, in return, he's going
to get tariffs of on competing Chinese EV's imposed and
(05:04):
he may win the race to dominate your timeless vehicle market.
Speaker 2 (05:07):
So to be fair that.
Speaker 3 (05:08):
Some other things that have happened, like you know, General
Motors set it would stop funding Crews, which is a
potential autonomous vehicle competitor to Tesla.
Speaker 2 (05:15):
But it is a crazy passing of the market, Darling Baton.
Speaker 1 (05:18):
Yeah absolutely, I mean in Vidio had grown and Athlet's
be honest, they had their time in the sun. Have
you number six got a chip bro? What's this about
the chip wars?
Speaker 3 (05:29):
I'm assuming, yeah, the ultra high consequence computer chip wars.
So the story there, of course is given the manufacturing
of advanced computer chips is considered the most complex and
precise manufacturing process humans have ever undertaken. And given these
chips drive almost every bit of technology would be touched
and underpin economies and militaries.
Speaker 2 (05:50):
It's no wonder this is enormous power struggle.
Speaker 3 (05:52):
So a few factoids there when you think about I
guess the US and China chip wars that is going on.
So China imports more chips and it doesn't oil, so
it's at a natural disadvantage there. And Taiwan, or to
be more precise, t STMC, the company controls ninety percent
of high end chip manufacturing, so you can imagine the
natural tensions there. And the US even has an active
(06:14):
government called the Chips Act, which is funneling billions of
dollars into US chip designers and manufacturers to make sure
they win this war.
Speaker 2 (06:21):
So some very.
Speaker 3 (06:23):
Big, sort of above our pay grade type things to
keep an eye on there.
Speaker 1 (06:27):
Absolutely, Hey, thanks so much, Sam, good to have you
on the show, good to have you running through your
top six hits, and missus on the stock market for
the year that is, Sam Dickey Fisher Funds.
Speaker 2 (06:37):
For more from Heather Duplessy Allen Drive. Listen live to
news talks.
Speaker 3 (06:41):
It'd be from four pm weekdays, or follow the podcast
on iHeartRadio.
Quite a tumultuous here in the markets. Fair number of
hits and missus Sam Dickey from Fisher Funds as well.
Then run through it, Sam, Good evening to you.
Speaker 2 (00:07):
Good evening, Ryan.
Speaker 1 (00:09):
We'll get to that in just a second. But first,
the Fed has decided to cut, and the markets have
reacted quite strongly. They don't like it, but not because
of the cut, but because of the slower cutting cycle
that's being forecasted.
Speaker 2 (00:22):
Right, that's right.
Speaker 3 (00:24):
It was a hawkish cut, if that makes sense to you,
So you know, fewer rate cuts projected, and in fact,
the FED raised the forecast for twenty twenty five core inflation,
which is obviously their primary mandate. So the market took
it as quite hawkish and took a lot of rate
cuts out of the curve, and interest rates went up
(00:45):
and equity markets went down.
Speaker 2 (00:48):
Yeah.
Speaker 1 (00:48):
Yeah, interesting that one, because I mean, they're obviously a
bit a bit looser with their monetary policy when it
comes to inflation than we are. I mean, can you
imagine our Reserve Bank making that call if inflation were
so stubborn? Here anyway, we'll go through. We'll go through
the rest of your top six. So we've done Number one.
Number two the Trump bump.
Speaker 2 (01:08):
Yes, and US exceptionalism.
Speaker 3 (01:10):
So we are obviously Trump won and promised three things,
really tax cuts, He promised to get rid of wasteful
red tape, and to cut a lot of fat, lot
of fat out of the federal government, so pretty powerful words.
Speaker 2 (01:21):
The market reacted strongly.
Speaker 3 (01:23):
And let's not forget Rylan that before these fighting words,
the strength of the US economy had been the number
one positive surprise for stock markets for the past eighteen months.
So if we take a step back, the US was
supposed to be in recession by now, according to economists,
eighteen months ago. And then you compare that to the
other big blocks, so China, which continues to struggle under
(01:44):
huge debt burdens and are structurally challenged Europe, so all
of that's known as US exceptionalism, and then we get
the Trump bump. And so astonishingly before today, just to
define what the Trump bump is, since Trump was elected
a few weeks ago, the US stopped, it was up
about seven or eight percent, China was down five, and
Europe was flat. So that is very rare outperformance in
(02:07):
such a short space of time.
Speaker 1 (02:09):
It certainly is, and the Trump bump on the cryptocurrency
has been pretty massive too, hasn't it. Number three. This is,
by the way, if you just joining us Sam Dickey
from Fisher Funds with basically the top six in terms
of market movements for the year. Number three.
Speaker 2 (02:28):
Yeah, well number three.
Speaker 3 (02:29):
I mean it's not necessarily market movements, but sort of
big hits and misses that caught our eye in the
market's eye. So the umbrella reward I guess for down
up in a flash was the japan flash crash. So
it seemed like a very big deal at the time
we spoke about it in August.
Speaker 2 (02:42):
And Japan has been trying to manufacture.
Speaker 3 (02:45):
Inflation really since the Japanese bubble popped about thirty five
years ago, so they kind of piggybacked on the once
in forty years spike and inflation that we're in the
rest of the globe experienced in twenty twenty two to
drive through higher wages. But they were just a little
bit too late, so they tried to raise interest rates
just as the rest of the world was cutting, and
that popped a huge speculative bubble in borrowing Japanese year
(03:08):
at zero percent interest rates and investing that money around
the world and hot assets, and because of that kind
of countertrend rate rise by the BOJ, the Japanese equity
market had has worst down day in thirty five years,
down twelve percent on the day, but it's recovered all
of that lost ground because the BOJ said it wouldn't
raise interest rates anymore until financial termol had calmed down.
Speaker 1 (03:31):
Number four. You've got humanoids here? Are they going to
be a big deal?
Speaker 2 (03:36):
Yes?
Speaker 3 (03:37):
I meet George sitson a little bit of left field there, Ryan,
just to sort of keep us on our toes, But yeah,
I mean, so what is a humanoid. It's a robot
that looks like a human and is designed to copy
human actions, so like walking upright and using its fingers,
because the world is built for humans. Now, there are
only four million robots in operation today. But you've got
(03:57):
to remember, over the next twenty five years, the keen
age population is going to shrink by about three hundred
million people.
Speaker 2 (04:03):
So it's a big deal.
Speaker 3 (04:04):
And in theory, we need to replace those workers, so
we're going to need hundreds of millions of these humanoids.
Speaker 2 (04:10):
So it's a really early stage thematic to keep an
eye on.
Speaker 1 (04:14):
Very interesting. Number five the award for market Darling is
passing from in Vidia to Tesla.
Speaker 2 (04:19):
Why yes, super interesting.
Speaker 3 (04:22):
So up until Trump got elected, for the year, the
Nvidia stop price was up about one hundred and eighty percent.
This is on November fourth day before he got elected,
and Tesla was flat for the year, so huge dispersion there.
And in the few weeks since Trump got elected, Nvidia
is down five percent and Tesla's up eighty percent. So
in short, it pays to be a friend of Trump.
(04:42):
And of course Musk is promising to run the Department
of Government Efficiency, which if you think about that acronym,
it's dodge, where he will go into the federal government
and rip out two trillion dollars of wasteful spending and implicitly,
because this is not explicitly, implicitly, in return, he's going
to get tariffs of on competing Chinese EV's imposed and
(05:04):
he may win the race to dominate your timeless vehicle market.
Speaker 2 (05:07):
So to be fair that.
Speaker 3 (05:08):
Some other things that have happened, like you know, General
Motors set it would stop funding Crews, which is a
potential autonomous vehicle competitor to Tesla.
Speaker 2 (05:15):
But it is a crazy passing of the market, Darling Baton.
Speaker 1 (05:18):
Yeah absolutely, I mean in Vidio had grown and Athlet's
be honest, they had their time in the sun. Have
you number six got a chip bro? What's this about
the chip wars?
Speaker 3 (05:29):
I'm assuming, yeah, the ultra high consequence computer chip wars.
So the story there, of course is given the manufacturing
of advanced computer chips is considered the most complex and
precise manufacturing process humans have ever undertaken. And given these
chips drive almost every bit of technology would be touched
and underpin economies and militaries.
Speaker 2 (05:50):
It's no wonder this is enormous power struggle.
Speaker 3 (05:52):
So a few factoids there when you think about I
guess the US and China chip wars that is going on.
So China imports more chips and it doesn't oil, so
it's at a natural disadvantage there. And Taiwan, or to
be more precise, t STMC, the company controls ninety percent
of high end chip manufacturing, so you can imagine the
natural tensions there. And the US even has an active
(06:14):
government called the Chips Act, which is funneling billions of
dollars into US chip designers and manufacturers to make sure
they win this war.
Speaker 2 (06:21):
So some very.
Speaker 3 (06:23):
Big, sort of above our pay grade type things to
keep an eye on there.
Speaker 1 (06:27):
Absolutely, Hey, thanks so much, Sam, good to have you
on the show, good to have you running through your
top six hits, and missus on the stock market for
the year that is, Sam Dickey Fisher Funds.
Speaker 2 (06:37):
For more from Heather Duplessy Allen Drive. Listen live to
news talks.
Speaker 3 (06:41):
It'd be from four pm weekdays, or follow the podcast
on iHeartRadio.
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