November 4, 2025 • 8 mins
Tom Shallard looks at global markets reacting to Donald Trump's announcements over the previous couple of months.
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Episode Transcript
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Speaker 1 (00:02):
The Muster financial segment. Brought to you by Craig's Investment
Partners Gore. This information is general in nature and is
not financial advice. Craig's Investment Partners Limited Financial Advice provided
disclosure statement can be found at craigsip dot com slash tcs.
Speaker 2 (00:18):
It's a Tom Shower out of Craig's Investment Partners joins
me in the studio this afternoon, Tom, Good afternoon.
Speaker 3 (00:26):
Thank you. Andy.
Speaker 4 (00:27):
Look, it's just great to be back in the back
in the studio. And yeah, we saw a ray of
sunshine yesterday, which after some world whether it was really
quite pleasing to see.
Speaker 2 (00:38):
Well, this afternoon's supposed to be twenty three or twenty
four degrees in gourd.
Speaker 4 (00:42):
Yeah, it looks a bit overcast at the moment, so
im not holding my breath.
Speaker 2 (00:46):
It's damned if you do. Damned if you don't, though
in that sense I suppose. But we look at it
the farming scenes. People are out there, tailing gangs are
up and running there. Well behind all the contractors are
and people are getting the cows milk.
Speaker 3 (00:58):
Ultimately get that white gold coming in right.
Speaker 4 (01:01):
Well, that's right, Andy, it's going to be a very
busy eight weeks into Christmas for farmers after after a
ten day delay.
Speaker 3 (01:09):
Really, what if someone say fifty days until Christmas.
Speaker 4 (01:12):
That's a scary thought.
Speaker 3 (01:12):
It's a really scary thought. So let's ignore that and
let's talk global markets instead. What's happening in there? Yees?
Speaker 4 (01:18):
So, October marked the six straight month of games for
global equity markets, driven by a very strong start to
third quarter earnings, which has been supporting sentiment and looking
back at history, this has been the best six month
stretch for American equities since the nineteen fifties. So of
(01:39):
third quarter earnings, approximately eighty three percent of the S
and P five hundred constituents that have reported so far
have exceeded the market's expectations, which has been very pleasing
and supporting valuations.
Speaker 3 (01:55):
Is this the Donald Trump effect?
Speaker 4 (01:58):
Partly? Andy, But the numbers are real. The earnings are
very impressive, especially at the top end of the market,
the megacap companies that we refer to as as the
Magnificent Seven. They've been churning out some really impressive numbers.
And what has been driving the market onwards is the
(02:21):
capital expenditure cycle. You know, from these big companies as
they invest in artificial intelligence. So just to add some
context to that, the Magnificent seven companies, the big tech companies,
will spend close to five hundred billion US dollars this
year on artificial intelligence and related infrastructure, and we expect
(02:45):
this to continue to climb next year. So many companies
that are downstream of what we consider this very large
capital expenditure supercycle, you know, stand to be huge beneficiaries.
Speaker 3 (02:57):
Did you say five hundred billion dollars on AI.
Speaker 4 (03:01):
That's correct, Andy on on capital expenditure. So it's a
different it's it's it's very real. You know, there's differentely
parts of the market that do look a bit hot,
but this theme, you know, in the quality names is
very real and is going to going to continue to
(03:21):
drive the market, you know, certainly for the for the
foreseeable for the next twelve to eighteen months.
Speaker 3 (03:27):
Yeah. Closer to home, New Zealand, Macro, what's going on?
Speaker 4 (03:30):
Yes, So I guess the silver lining of the soft
GDP print last quarter has been, you know, the strong
response by the by the Reserve Bank delivering that fifty
basis point cut we talked about last time I was
on here, and look the economy desperately needed it. The
market's currently pricing a further twenty five basis point cut
(03:53):
on the twenty sixth in November, so that'll see the
o CR at around two point two five percent by
year end, So just for those with short memories, that's
a whopping three point twenty five percent lower than in
August twenty twenty four. So enthusiasm for check credit that's
driving the New Zealand equity market close to an all
(04:15):
time high. And this broadly shows that monetary policy of
this nature does work and the benefits of lower rates
will flow through to the economy. They do take sort
of six to twelve months for flow on effects to materialize,
but we do expect, you know, quite quite solid rebound
(04:35):
in GDP for twenty twenty six.
Speaker 3 (04:38):
But those ocr CAATs had to happen like they did, right.
Speaker 4 (04:41):
Oh absolutely, And it would have been madness if it
wasn't a fifty basis point cut at the last meeting
in early October. So that was really pleasing. It was
long over due.
Speaker 3 (04:57):
The rural sales market, would you say, it's boy And
at the moment.
Speaker 4 (05:00):
Yeah, looks to be pretty liquid andy, which is pleasing
for some of those older farmers that you know in
the process of selling or succession. And I guess on
that note, it's never too early to come into our
office for a chat about if you're in the process
of selling the farm for you know, how you might
(05:23):
or how we might structure a portfolio for growth and income,
you know, to to support support retirement. That sort of
tends to be air core business nowadays.
Speaker 2 (05:34):
Andy, Now we're going to see this Fontera capital return
providing stimulus to the economy in six months time. But
you can see likes of the field days at why
Moving Southern Field Days in February.
Speaker 3 (05:47):
People will be out there you start seeing it around them,
wouldn't you.
Speaker 4 (05:50):
I think so exactly that that return could could come
as early as as March. I mean nothing FOREMOS has
been guided, but you know we would expect some time
in the in the months from from March to May. Yeah,
it'll be it'll be a good time to be a
vedoor at the at the Southern Field Days, that's for sure.
But yeah, along with I guess cheaper credit to drive
(06:14):
the economy into twenty twenty six, that three point two
billion going back to the dairy farmers via the capital return,
you know, it will be a very strong year for
the regions for the rural economy, you know, we expect
a portion of the proceeds will be invested in some description.
(06:35):
So that might be capital expenditure on farm to enhance
efficiency and long term productivity. Could be debt reduction, but
many farmers with robust balance sheets, you know that that's
not going to be the best use case. So we
expect the portion to invest off farm to create that
(06:56):
portfolio diverification and help with succession planning. So that's that.
As we're weakened out, we manage the spoke portfolios Taylor
to our clients for growth and income off farm, and
we will be hosting a series of rural pub talks
in early December to discuss this capital return and highlight
(07:17):
the opportunity to invest off farm that this presents many
dairy farmers. So keep an eye out on your letterbox
over the next few weeks for an invitation to pop
down to your local pub for a quick beer, andy
and a light snack while we present on the opportunity
here as we see it here at Craigs.
Speaker 2 (07:35):
Yeah, another correction on the GDT, but make no quaims
about a daring still in a very good headspace. Tom Hey,
the team dere at Craig's IP. How do you get
in touch?
Speaker 4 (07:43):
Come down to one twenty main Street, Gore or craigsip
dot com.
Speaker 3 (07:48):
Tom Shalloud always good to catch up.
Speaker 4 (07:49):
Excellent, thanks very much, Andy.
Speaker 3 (07:53):
Craig shell Out of Craig shall Out. This is you,
Tom shall Aud the know where that comes from. Tom
shall Ard, Eragg's Investment Partners.
Speaker 2 (08:01):
Always great to catch up with the team. Thomas O'Brien
is based up in Garston, Business owner.
Speaker 3 (08:06):
We're going to see how things are up there. Next,
you're listening to the Muster
The Muster financial segment. Brought to you by Craig's Investment
Partners Gore. This information is general in nature and is
not financial advice. Craig's Investment Partners Limited Financial Advice provided
disclosure statement can be found at craigsip dot com slash tcs.
Speaker 2 (00:18):
It's a Tom Shower out of Craig's Investment Partners joins
me in the studio this afternoon, Tom, Good afternoon.
Speaker 3 (00:26):
Thank you. Andy.
Speaker 4 (00:27):
Look, it's just great to be back in the back
in the studio. And yeah, we saw a ray of
sunshine yesterday, which after some world whether it was really
quite pleasing to see.
Speaker 2 (00:38):
Well, this afternoon's supposed to be twenty three or twenty
four degrees in gourd.
Speaker 4 (00:42):
Yeah, it looks a bit overcast at the moment, so
im not holding my breath.
Speaker 2 (00:46):
It's damned if you do. Damned if you don't, though
in that sense I suppose. But we look at it
the farming scenes. People are out there, tailing gangs are
up and running there. Well behind all the contractors are
and people are getting the cows milk.
Speaker 3 (00:58):
Ultimately get that white gold coming in right.
Speaker 4 (01:01):
Well, that's right, Andy, it's going to be a very
busy eight weeks into Christmas for farmers after after a
ten day delay.
Speaker 3 (01:09):
Really, what if someone say fifty days until Christmas.
Speaker 4 (01:12):
That's a scary thought.
Speaker 3 (01:12):
It's a really scary thought. So let's ignore that and
let's talk global markets instead. What's happening in there? Yees?
Speaker 4 (01:18):
So, October marked the six straight month of games for
global equity markets, driven by a very strong start to
third quarter earnings, which has been supporting sentiment and looking
back at history, this has been the best six month
stretch for American equities since the nineteen fifties. So of
(01:39):
third quarter earnings, approximately eighty three percent of the S
and P five hundred constituents that have reported so far
have exceeded the market's expectations, which has been very pleasing
and supporting valuations.
Speaker 3 (01:55):
Is this the Donald Trump effect?
Speaker 4 (01:58):
Partly? Andy, But the numbers are real. The earnings are
very impressive, especially at the top end of the market,
the megacap companies that we refer to as as the
Magnificent Seven. They've been churning out some really impressive numbers.
And what has been driving the market onwards is the
(02:21):
capital expenditure cycle. You know, from these big companies as
they invest in artificial intelligence. So just to add some
context to that, the Magnificent seven companies, the big tech companies,
will spend close to five hundred billion US dollars this
year on artificial intelligence and related infrastructure, and we expect
(02:45):
this to continue to climb next year. So many companies
that are downstream of what we consider this very large
capital expenditure supercycle, you know, stand to be huge beneficiaries.
Speaker 3 (02:57):
Did you say five hundred billion dollars on AI.
Speaker 4 (03:01):
That's correct, Andy on on capital expenditure. So it's a
different it's it's it's very real. You know, there's differentely
parts of the market that do look a bit hot,
but this theme, you know, in the quality names is
very real and is going to going to continue to
(03:21):
drive the market, you know, certainly for the for the
foreseeable for the next twelve to eighteen months.
Speaker 3 (03:27):
Yeah. Closer to home, New Zealand, Macro, what's going on?
Speaker 4 (03:30):
Yes, So I guess the silver lining of the soft
GDP print last quarter has been, you know, the strong
response by the by the Reserve Bank delivering that fifty
basis point cut we talked about last time I was
on here, and look the economy desperately needed it. The
market's currently pricing a further twenty five basis point cut
(03:53):
on the twenty sixth in November, so that'll see the
o CR at around two point two five percent by
year end, So just for those with short memories, that's
a whopping three point twenty five percent lower than in
August twenty twenty four. So enthusiasm for check credit that's
driving the New Zealand equity market close to an all
(04:15):
time high. And this broadly shows that monetary policy of
this nature does work and the benefits of lower rates
will flow through to the economy. They do take sort
of six to twelve months for flow on effects to materialize,
but we do expect, you know, quite quite solid rebound
(04:35):
in GDP for twenty twenty six.
Speaker 3 (04:38):
But those ocr CAATs had to happen like they did, right.
Speaker 4 (04:41):
Oh absolutely, And it would have been madness if it
wasn't a fifty basis point cut at the last meeting
in early October. So that was really pleasing. It was
long over due.
Speaker 3 (04:57):
The rural sales market, would you say, it's boy And
at the moment.
Speaker 4 (05:00):
Yeah, looks to be pretty liquid andy, which is pleasing
for some of those older farmers that you know in
the process of selling or succession. And I guess on
that note, it's never too early to come into our
office for a chat about if you're in the process
of selling the farm for you know, how you might
(05:23):
or how we might structure a portfolio for growth and income,
you know, to to support support retirement. That sort of
tends to be air core business nowadays.
Speaker 2 (05:34):
Andy, Now we're going to see this Fontera capital return
providing stimulus to the economy in six months time. But
you can see likes of the field days at why
Moving Southern Field Days in February.
Speaker 3 (05:47):
People will be out there you start seeing it around them,
wouldn't you.
Speaker 4 (05:50):
I think so exactly that that return could could come
as early as as March. I mean nothing FOREMOS has
been guided, but you know we would expect some time
in the in the months from from March to May. Yeah,
it'll be it'll be a good time to be a
vedoor at the at the Southern Field Days, that's for sure.
But yeah, along with I guess cheaper credit to drive
(06:14):
the economy into twenty twenty six, that three point two
billion going back to the dairy farmers via the capital return,
you know, it will be a very strong year for
the regions for the rural economy, you know, we expect
a portion of the proceeds will be invested in some description.
(06:35):
So that might be capital expenditure on farm to enhance
efficiency and long term productivity. Could be debt reduction, but
many farmers with robust balance sheets, you know that that's
not going to be the best use case. So we
expect the portion to invest off farm to create that
(06:56):
portfolio diverification and help with succession planning. So that's that.
As we're weakened out, we manage the spoke portfolios Taylor
to our clients for growth and income off farm, and
we will be hosting a series of rural pub talks
in early December to discuss this capital return and highlight
(07:17):
the opportunity to invest off farm that this presents many
dairy farmers. So keep an eye out on your letterbox
over the next few weeks for an invitation to pop
down to your local pub for a quick beer, andy
and a light snack while we present on the opportunity
here as we see it here at Craigs.
Speaker 2 (07:35):
Yeah, another correction on the GDT, but make no quaims
about a daring still in a very good headspace. Tom Hey,
the team dere at Craig's IP. How do you get
in touch?
Speaker 4 (07:43):
Come down to one twenty main Street, Gore or craigsip
dot com.
Speaker 3 (07:48):
Tom Shalloud always good to catch up.
Speaker 4 (07:49):
Excellent, thanks very much, Andy.
Speaker 3 (07:53):
Craig shell Out of Craig shall Out. This is you,
Tom shall Aud the know where that comes from. Tom
shall Ard, Eragg's Investment Partners.
Speaker 2 (08:01):
Always great to catch up with the team. Thomas O'Brien
is based up in Garston, Business owner.
Speaker 3 (08:06):
We're going to see how things are up there. Next,
you're listening to the Muster
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