Shane Solly: Harbour Asset Management spokesperson on Donald Trump declining to rule out US recession amid tariff war

US President Donald Trump has declined to rule out a recession this year as his administration's tariffs spark economic concern.

It comes after a volatile week for US financial markets as investors grappled with ongoing uncertainty as a result of the administration's trade policies. 

Harbour Asset Management's Shane Solly explains further.

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Shane Salu with Harbor Asset Management with US tonight High Shane. Yeah, right,
So we obviously had a pretty bad week on the
US stock market last week and it continues today.

Speaker 2 (00:10):
Oh look, you know, this rapid pace of policy announcements
from the Trump government is really putting invesias on the
back foot. And we've got to the point now where
and this is are worried about growth. A couple of
things behind that, This government efficiency drive, led by this
new Department of Government Efficiency and the Terriff announcements has
seen a drop and consensus market growth focus and got

(00:33):
to the point where late last week we saw US
Federal Reserve Bank, Chium and Joan Power Coms had actually economies. Okay,
Munkey policys sittings are appropriate, but that sort of the
shear market come up a little bit on Friday, but
over all the week was really soft in the US
market because of these slower growth numbers. So yeah, bit
of a challenge certainly, getting efficiency is costing a little

(00:57):
bit of growth.

Speaker 1 (00:58):
Yeah, And is the way he's talking as well, I
mean even the last twenty four hours talking about the
possibility of a recession.

Speaker 2 (01:05):
Yeah, that's right, And we've got one of his key
policy advisors. Mister aren't saying hey, look right from the
get go, I was asked to how Toway get efficiency
without breaking the economy. So mister Trump is definitely testing
the boundaries back here.

Speaker 1 (01:18):
Fonterra increased its profit guidance today. What was behind that move?

Speaker 2 (01:23):
Yeah, look a good good uplift from Fontira that they've
got a building bit of a track. We've got a
beating expectations. This was better than expected. They've lifted earning
specieer guidance from forty to sixty cents to fifty five
to seventy five. And really it's just back to basically
good underlying ingredients business, you know, driving upgrades. This dairy
payps obviously very helpful for the Boorday, New Zealand economy.

(01:45):
But they've certainly got a much better run demand and
supply going their way, so they're in a good spot.

Speaker 1 (01:52):
They're also and we've spoken about this a lot, wanting
to divest the consumer business mainland. It's they've now started
doing their road show up and down in the country.
Is part of this kind of process. What's the reaction
to the information they've been sharing being like.

Speaker 2 (02:06):
Yeah, look, so this Mainland is that consumer business that
produces products like anchor milk and Mainland and Capity dairy
products we know of and these on Australia, it's also
in parts of Asia. The business they've just given us
a little bit of detail on is Smidge. To be
honest with youryan, the start hopefully of some more information.
So they're running a business that generated four point nine

(02:27):
billion dollars of revenue in two hundred million of earnings
before interest and tax in twenty twenty four, so it's
certainly got an okay base there, but they're running a
dual process, so we don't actually know whether it may
be listed or it may actually be sold to a
trade bier. So early days there's a lot of information
to come out. But the combination of that earnings upgrade

(02:49):
and release on Mainland that supported the fine terraship price
is actually up five percent to five dollars forty five,
almost back to its five year high. Still a bit
of around the Maniam process, but we're getting a bit
more confidence that this is getting a bit more confidence
around earning space in the capital base for Fontira. So yeah,
a bitter day for Fonterra.

Speaker 1 (03:09):
A tech for them today. What results should we be
looking forward to this week.

Speaker 2 (03:13):
Yeah, it's very much about macroeconomics, to be honest with
your Ryan Sore. Will be some big data points out
of the US, particularly some inflation points, and again going
back to mister Jeron Powell from the FED saying everything's okay,
we need some more confilation about particularly with inflation. And
then later in the week we've got some US job
jobs data, and so it's the trade off between hot

(03:34):
enough hot enough in the economy not too cold in
the economy for him to keep those interest rates in
the right setting. We've got a Bank of Canada official
rate call. Now normally you could go why why does
that matter? Well, they've actually been quite a lead indicator
for other central banks and so they've been really cutting
rates aggressively, and obviously they're in the midst of a
bit of a trade war with the US. But really

(03:55):
I think we're going to keep focusing on these trade
tariff news and fortunately it's going to keep it's pretty busy.

Speaker 1 (04:00):
It certainly is. Shane, thank you for that. Shane Solly
harrested management with the market update for this afternoon. For
more from Hither Duplessy Allen Drive, listen live to news
talks it'd be from four pm weekdays, or follow the
podcast on iHeartRadio