Jeremy Hutton: Milford Asset Management Equities Analyst on NZX making a recovery

It's been a memorable year for financial markets so far - but experts have noted that the NZX appears to have calmed down.

After President Donald Trump's 'Liberation Day', the NZX took a significant dip, but the markets appear to have shaken off the impact caused by the tariffs.

Milford Asset Management's Jeremy Hutton explains further.

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Episode Transcript

Speaker 1 (00:00):
Just to remind you, we're going to be chatting to
Infrastructure New Zealand after the news after half pass because
they've obviously been barred from the budget day lock up
as well. Right now though, Jeremy Hutton Milford Acid Management
is with us. Hey, Jeremy, good evening hither So we've
seen a complete round tripe and performance on the inzt
X and various global markets since Trump's liberation Day. How's
the INSIDEX market been going?

Speaker 2 (00:22):
Yeah, the INSIDEX has been going relatively well. It is
widely seen as a defensive market given the nature of
some of our larger companies that make up the index.
But starting with some numbers, so post Liberation Day on
April to second, the INSIDEX fell about four and a
half percent over the five days where the market's sold

(00:42):
off heavily. The SMP and the tech heavy Nasdaq fell
around twelve percent over the same period, So New Zealand
did show some outperformance on the downside there. But as
you said before, they have done a full round trip
and markets have clawed back all of these losses and
some games. So the Nasdaq that's now up eight percent

(01:04):
since liberation Day, the SMP four percent, so those markets
have completely shrugged the tariffs off, and the nz X
too has had a good rebound. It's up four percent,
so it has been keeping up a little bit on
the upside too. But you know, it's fair to say
that the market assumptions at the moment are pretty favorable,
continuing sort of expecting the continuing of easing of trade

(01:25):
tensions and no slower global growth, which maybe is a
little bit tad ambitious at this point.

Speaker 1 (01:31):
I mean huge turnarounds. You which is the point that
you've made in short short periods of time. Can you
actually pick where the turning points are?

Speaker 2 (01:40):
Yeah, It's extremely difficult, and to me, it just continues
to show how tricky it is trying to time the market,
especially given the volatility and some of the speeds of
the moves that we're seeing, and sentiment can turn really
bullish to max bearish in a very short space of time,
and Trump holding daily press conferences doesn't help with this.
But I think the best strategy as an investor is

(02:02):
just to think about your long term goals and try
and stick to that plan and chopping markets, try not
to panic or get any FOMO in both the buy
and the seuside.

Speaker 1 (02:11):
Yeah, and we're talking about sale. When the market is
having to sell off, what companies on the interetex do
investors tend to favor.

Speaker 2 (02:18):
Yeah, and this turmoil and where markets are falling, investors
do tend to shift to easily predictable businesses and solid sectors.
And these are examples like consumer staples and food and
utilities and the injet X has a few good examples.
So our own relatively robust gent tailor electricity sector that
gets a lot of interest when markets tend to sell off.

(02:40):
And then also high quality growth companies that growing every
year like EBOS that gets a bit of a flight
to safety two and Spark traditionally would have been in
that camp as well, but given they're having a few
of their own specific issues, means that investors are avoiding
that name for now.

Speaker 1 (02:55):
And just very quickly tell me. In May, so far
we've seen a bit of a rally. What companies have
been fitted here.

Speaker 2 (03:02):
Yeah, some of the terriff exposed companies as you would imagine,
so main freight that's up twenty three percent on that
normalization of trade. We've got Infra till you know, they
got hit on the tech sell off, so they're up
eleven percent. And then cyclical companies they tend to perform
well in bill markets generally, and in New Zealand we've

(03:22):
got the retirement names like Ryman and Somerset and also
a bit of Fletcher Building too, so they've all had
double digit gains this month so far. But yeah, the
volatility makes investor's jobs really tricky, but it does make
following the markets super interesting at the moment.

Speaker 1 (03:37):
Thank you so much, Jeremy really appreciated. Jeremy Hutton of
Milford Acid Management. For more from Hither Duplessy Allen Drive,
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