On Point

After two days of discussions over the weekend, the US and China agreed to a 90-day tariff truce. This was a bigger announcement than markets were expecting, and it substantially diminishes the risk of a full-blown trade war. What does this mean for the outlook, investors and the balance of the year?

This week we'll be watching economic indicators for signs of any impact from the tariff announcements in early April, with US inflation and retail sales of particular interest. Federal Reserve Chair Jerome Powell is speaking on Thursday inWashington, D.C. and markets will be monitoring the outcome of trade talks between US Treasury Secretary Scott Bessent and China's Vice Premier He Lifeng in Switzerland.

There has been increasing talk of a US recession in recent weeks, with one major global bank suggesting the odds of this are 60 per cent. It's certainly possible if harsh tariffs remain in place, although the outlook could brighten quickly if we see a de-escalation. Which stocks will hold up best in a recession, and what can we learn from previous downturns?

A lot of people are frustrated with US President Donald Trump, but there's one who has a more genuine case than most. That's Federal Reserve Chair Jerome Powell, and not just because Trump wanted to fire him!

It's a big week for economic data releases in the US, with the jobs report due on Friday, the ISM manufacturing index and core PCE inflation report ahead of that, as well as the preliminary GDP reading for the March quarter. Here in New Zealand, we'll be watching the latest monthly ANZ Business Outlook survey for any signs of nervousness about the global trade situation, as well as inflation indicators. It'll be a very busy week for global earnings releases, with 180 S&P 500 companies due to report. This will include four of the “Magnificent 7” with Meta and Microsoft reporting on Wednesday, and Amazon and Apple to follow on Thursday. We'll also hear from Coca-Cola, Visa, Caterpillar, CVS Health and Eli Lilly.

It's been a very volatile few weeks for investors, and some markets and asset classes have fallen heavily amidst the uncertainty. All declines are different and it's impossible to say when or where this one ends. However, here are a few suggestions for navigating this one.

The US market ended the week up 5.7%, which saw it finish 12.7% off its February highs, having been down 18.9% at its weakest point and very close to bear market territory. Most other markets finished the week slightly lower, with the local NZX 50 down 1.7%. Despite last week's partial tariff backtrack from the White House, the US 10-year bond yield ended the week at 4.5%, up from just under 4.0% seven days earlier. That was the biggest weekly jump since 2001, and it comes as investors exit US assets in favour of other jurisdictions. The US dollar index fell to its lowest level since July 2023, and the greenback is down 9.0% from where it was in mid-January.

The last several trading days have been extremely volatile for global markets, with US President Donald Trump unveiling a harsher set of tariffs than expected on “Liberation Day”. The S&P 500 index in the US fell 10.5 per cent in the two days following the initial announcement. It's been slightly calmer since then, but investors are still on edge. What have we seen across some of the key asset classes, and where might things be headed from here?

It was an extremely volatile week for global markets, as "Liberation Day" sent investors into a tailspin. Investors will be watching for signs of further tariff retaliation (or negotiation) this week, while US inflation figures will in focus. Another OCR cut its widely expected here in New Zealand, and on the corporate front the quarterly international earnings season kicks off with some of the US banks on Friday.

The March quarter of 2025 is behind us and if it's any guide of things to come, we're in for an eventful year! The quarter was punctuated by policy uncertainty, shaky confidence readings and volatile markets. Which asset classes and markets were up, down or sideways, and what should investors be watching out for over the coming three months?

The focal point of this week will be the details of US reciprocal tariffs, which are scheduled to be implemented on Wednesday (April 2). A day later, 25% tariffs on cars imported into the US will take effect. It is unclear whether the reciprocal tariffs will be broad or targeted, but the prospect of added inflationary pressures and a tariff-induced economic slowdown will keep investors on edge. In terms of global economic releases, highlights will be the US jobs report and ISM indices, while here in New Zealand the latest ANZ Business Outlook survey will take centre stage.

Last week's gross domestic product (GDP) report was comforting, coming in above expectations and pointing to the strongest improvement in 18 months. That was a welcome piece of good news, following a difficult February reporting season littered with cautious comments from management teams. In contrast, business confidence measures have rebounded strongly, which seems out of step with the downbeat tone we're seeing elsewhere. So what gives, and why are we getting mixed messages from some of our key economic indicators?

Global flash PMIs for March will be a focal point early in the week, while PCE inflation will be one of the US highlights. The Conference Board's US consumer confidence index will be of interest on Tuesday too, following a slide in the University of Michigan measure last week. Australia's 2025/26 Federal Budget will be delivered on Tuesday evening, paving the way for the Federal Election which must occur on or before 17 May. Locally, it's a quiet week with ANZ consumer confidence for March the only notable release.

Central banks will be in focus this week with monetary policy decisions due in the US, Japan and the UK. The Fed will be the obvious highlight and although no change to interest rates is expected, markets will be interested in the commentary and a fresh set of projections. Locally, the main event will be December quarter gross domestic product (GDP), which is due Thursday. The economy has contracted for eight consecutive quarters (on a per capita basis), and we're hoping for early signs of improvement.

As of yesterday's close, the S&P 500 in the US is down 10.1 per cent from its February highs. A fall of more than ten per cent is generally considered a market correction, and we're officially in one of those now. Our crystal ball isn't any better than yours, and we'd be lying if we said we know exactly where things go from here. However, here are four things keeping us from getting too negative too early.

After two consecutive years of 25 per cent plus returns, the S&P 500 index in the US is down 2.5 per cent this year as investors fret over tariffs. However, there's always a bull market somewhere and right now, that seems to be in Europe. European shares are up ten per cent this year, led by German shares which have surged 15.6 per cent. That's the best start to a year in at least a decade, but the question now is whether those gains will keep on coming.

This week's highlight will be the February inflation report in the US, with the University of Michigan survey also in focus amidst weakening confidence and rising inflation expectations. Developments on the tariff front will also have a big impact on market sentiment. On Monday, China is set to impose tariffs of up to 15% on various US imports, while the US set to impose steel and aluminium tariffs of 25% on the European Union from Wednesday. Canada will be in the spotlight too, with the governing Liberal Party set to announce a replacement for Justin Trudeau in a leadership vote on Sunday. This comes at a volatile time, ahead of the Canadian general election which must be held by October.

Every once in a while, you hear talk of how much worse off you'd be if you'd missed the ten best days in a given period. It usually happens during a rough patch, in the hope it'll calm investors down and ensure they stay the course rather than panicking and selling at precisely the wrong time. The numbers are always compelling, and it's admirable advice. However, there's one important point that is often missed.

Term deposit investors have had it pretty good in recent years, but that's changing quickly and many savers are on borrowed time. Interest rates are headed lower, and those sitting comfortably on the sidelines should prepare for that. If they take too long, they'll not only miss opportunities elsewhere but they'll be facing a hefty fall in income.

The German election will be a highlight of the international week, with the first results due early Monday morning here in New Zealand. The key release in New Zealand will be the ANZ Business Outlook, due on Thursday. The Australasian earnings season continues this week, and it'll be another busy one with a raft of companies scheduled to report. It's a quieter week on the international earnings front, although Home Depot and Salesforce will release earnings results, as will NVIDIA.

We're a month into President Trump's second term and there's 47 more to go, which means investors need to make peace with a less predictable market backdrop and get on with it. While sitting on the sidelines for the next four years is one strategy, it's unlikely to be a very good one. Don't forget, the S&P 500 increased 58 per cent during Trump's first term despite plenty of twists and turns, and there's every chance you'll be rewarded for keeping your cool this time around too.

This week's economic highlight will be the global flash PMIs for February, which are due on Friday. Last month these pointed to a good start to year for the global economy, and we'll be watching for further improvements, particularly in Europe. There'll be plenty of action in this part of the world too. Another 50-basis point cut to the OCR is expected here in New Zealand on Wednesday, while we're also expecting the first rate cut of this cycle across the Tasman, which would be an important milestone for the Australian economy and sharemarket.

The local reporting season begins this week, and we've got high hopes for a more optimistic tone. It's been a very difficult couple of years for most businesses, but things are getting better. The period this reporting season will cover is close to the maximum pain point for our economy, but there are plenty of bright spots emerging. Investors should brace themselves for another batch of uninspiring results, while putting more emphasis on the encouraging comments we hope to hear about how this year is shaping up.

Looking ahead, this week's economic highlights will include the latest inflation report in the US, as well as the NFIB survey and the retail sales report for January. On the central banking front, investors will be watching the semi-annual testimonies by Federal Reserve Chair Jerome Powell to the Senate Banking Committee and the House Financial Services Committee on Tuesday and Wednesday. Investors will also be watching for more tariff talk, after US President Donald Trump said he was planning reciprocal tariffs on US trading partners, which would mean raising the level to match what the US is charged by others.

The OCR has fallen from its peak, but unemployment is up and it still feels like we're in recession. Meanwhile, the currency is in a slump and we're facing international challenges as tariffs threaten to derail the global growth story. Can we still expect the economy to recover, how long will we need to wait for lower mortgage rates to have an impact, and are there any bright spots on the horizon?

Fixed income can provide investors with a stable, reliable income stream for a modest level of risk. If you're staring down the barrel of sliding term deposit income, it might be a great solution that's worth a look. For most private investors, a mix of New Zealand government or local authority bonds, combined with investment-grade corporate bonds is the optimum approach. Subordinated and hybrid securities can be a useful complement, but make sure you understand the nature of these and keep your weightings in check. For smaller investors, diversified fixed income or bond funds might be a very useful option.

This week, the focus will be on President Trump's tariffs, how markets react and whether we see any retaliation from major US trading partners. Key economic releases in the US this week will include the jobs report, the ISM indices and the University of Michigan's consumer sentiment index. The global earnings season will be in focus again, with more than 100 S&P 500 companies due to report including Alphabet and Amazon. Here in New Zealand, the highlight will be the labour force report on Wednesday, which is expected to see unemployment rise above 5 per cent for the first time in more than four years.

Over the last month or two the Wall Street gurus have firmed up their forecasts for where the S&P 500 will finish 2025. The majority have a year-end estimate of between 6400 or 6600, which implies a gain of 9-12 per cent this year. That's close to the long-term average return from US shares, which is (somewhat ironically) why I think most strategists could turn out to be wide of the mark.

The last week of January will be a busy one, with central banks in focus as the Federal Reserve in the US and the European Central Bank are set to announce their latest monetary policy decisions. It'll be a holiday-shortened week across the Tasman with markets closed on Monday, while Wednesday's December inflation report might pave the way for a February RBA rate cut. A big week of international earnings releases also looms, with four of the Magnificent 7 set to report!

The Federal Reserve in the US meets next week, and there's a good chance they do nothing. That would see the upper bound of the Fed Funds Rate, the US version of our Official Cash Rate (OCR), remain at 4.50 per cent. With our OCR at 4.25 per cent, the unusual situation of us having a lower policy rate than the US is likely to persist a bit longer. In fact, if financial markets are correct this gap is likely to widen significantly. How might this impact the NZ dollar, and what could turn things around?

There were plenty of lessons for investors in 2024, as is the case every time we close the book on a calendar year. The one that stood out for me was the need to ensure your investments were globally diversified. If you didn't do that and instead hunkered down in New Zealand assets, you didn't enjoy the success you could've. Let's delve into some of the 2024 returns, from here and abroad, and highlight why it was so important to have your wealth spread far and wide.

The shares or property debate remains alive and well, especially in housing-obsessed New Zealand. Some property people will never touch shares. Likewise, some share investors see property as far too much work for a relatively modest reward. Shares and property have many fundamental value drivers in common, but they are also very different. Let's crunch the numbers to see which stacks up best, and compare the pros and cons of each.

There's a lot of excitement out there amongst borrowers, particularly those with a mortgage renewal coming up. The message boards are full of people speculating on how low rates will go, and strategising how to play it for maximum advantage. While the optimism is justified, some caution applies as well. If you're in the midst of that refixing decision, there are a couple of important points to be aware of.

As a new year begins, there are a raft of questions over what to expect from financial markets in 2025. Will the New Zealand economy recover from recession, how much further will interest rates fall, and what will that mean for the housing market? Investors are also pondering the outlook for the ailing local sharemarket, while speculating if the might S&P 500 can keep rising or if it's due for a fall. We'll try and answer some of those questions, with a few market predictions for 2025.

There's a lot of good investment wisdom out there. Ensure you're well-diversified, stick to quality assets, don't overtrade and keep fees to a minimum are but a few examples. One of the simplest but most important, especially it comes to shares (or any growth asset, for that matter) is to maintain a long-term view. That can be difficult, especially during periods of uncertainty (which come frequently). However, it really is non-negotiable. If you don't feel you can stick it out for at least five (if not ten) years, the sharemarket probably isn't the right place for your money

Talk of a capital gains tax (or a CGT) found its way back into the headlines during 2024. It's hard to see a National-led government making any such changes to our tax system, but it could be back on the agenda when we inevitably see a change of government. Do we need a CGT here in New Zealand, and what are the drawbacks of implementing such a radical change?

Kiwibank has been in the news again, with the Government announcing it will consider tapping KiwiSaver funds and other large investors for another $500 million to inject into the business. Is this move a stepping stone on the path to a full-blown IPO and sharemarket listing, and would this be a good thing for the company, taxpayers and the market?

There's plenty to monitor across the world this week. Flash PMIs for December will be out early in the week, while another highlight will be the PCE inflation report in the US on Friday. There are three major central banks meetings taking place, with the Federal Reserve in the US expected to cut interest rates again on Thursday morning and decisions from the Bank of Japan and Bank of England later than day. Here in New Zealand, a highlight will be the September quarter GDP report, while we'll also get update on dairy prices, business confidence and the housing market. The Half Year Economic and Fiscal Update (HYEFU) is also out on Tuesday, and is likely to reflect a challenging position and a further increase in the Government's borrowing requirements.

As this year draws to a close, there are a raft of questions over what to expect from financial markets in 2025. Will the New Zealand economy recover from recession, how much further will interest rates fall, and what will that mean for the housing market? Investors are also pondering the outlook for the ailing local sharemarket, while speculating if the might S&P 500 can keep rising or if it's due for a fall. We'll try and answer some of those questions, with six predictions for 2025.

This week the global highlight will be the November CPI report in the US on Wednesday. This will be closely watched as investors look ahead to the final Federal Reserve meeting of the year next week, where the central bank is expected to reduce interest rates another 0.25 per cent. Markets will also be watching the latest inflation and trade data in China, monthly GDP in the UK and central bank decisions in Australia, Canada, Europe and Switzerland. On the local front, we'll get some further GDP partials ahead of the September quarter GDP report, which is scheduled for release late next week. A housing market update is due from the Real Estate Institute, while we'll also see the latest monthly migration figures.

It's been a good year for the local sharemarket. The NZX 50 index is up 11.0 per cent so far, which sees it on track for its best year in four. Most of our biggest companies have performed well, but one notable exception is Spark. It's share price is down more than 40 per cent in 2024, making it one of the biggest decliners across the entire exchange. There are several reasons for the disappointing performance. Some of these are a function of the economic backdrop, while others are of the company's own making.

This week is a busy one in terms of international economic releases. The focus will be on the US jobs report, which is out on Friday. This will be a key piece of the puzzle ahead of the Fed's next decision on December 18 (where markets see a 65% chance of another 0.25% cut). We'll also get the latest ISM indices in the US, as well as the University of Michigan's monthly consumer survey. November PMIs will be out in China, while in Australia we'll get the GDP report for the September quarter. It'll be a quieter week here at home, although we will see the results of another dairy auction.

The US sharemarket has pushed higher since the election, building on the strong gains we saw leading up to it. The S&P 500 index is up 27 per cent (including dividends) so far in 2024, on the back of a similar rise last year. After the 60 per cent return since the end of 2022, is a traditional “Santa rally” on the cards, or will the market run out of puff?

The final RBNZ meeting of 2024 is on Wednesday. Markets expect another 50-basis point cut, but could the RBNZ go bigger or smaller? We'll also get the retail sales report for the September quarter, and the latest monthly ANZ Business Outlook. There will be plenty to watch on the corporate front too, with a raft of listed companies scheduled to release earnings including Turners, Fisher & Paykel Healthcare and Ryman Healthcare.

There's a lot of excitement out there amongst borrowers, particularly those with a mortgage renewal coming up. The message boards are full of people speculating on how low rates will go, and strategizing how to play it for maximum advantage. While the optimism is justified, some caution applies as well. If you're in the midst of that refixing decision, there are a couple of important points to be aware of.

November flash PMIs will be among the key international releases, with these due from most of the major economies on Friday. Investors will also be watching inflation readings from the UK and Japan, while there is a long list of central bank speakers. The world's most valuable share, NVIDIA, reports on Wednesday and we'll also see earnings releases from Walmart, Palo Alto Networks and Target. It'll be a quieter week on the local economic front, as investors look ahead to next week's Reserve Bank decision, where another 50-basis point rate cut is expected.

Last week's Federal Reserve press conference was a little different to usual, coming hot on the heels of the election. Fed Chair Jerome Powell fielded several questions about President-elect Donald Trump, offering nothing in response. However, the Fed can't avoid talking about Trump forever though. We're in for an interesting twelve months, and it might all start with the upcoming meeting in December.

The latest inflation figures will be a highlight in the US this week, while Fed Chair Jerome Powell is scheduled to speak on Thursday in Dallas about the economic outlook. Closer to home, the Reserve Bank of New Zealand's survey of expectations will be in focus, as will the latest housing market report from the Real Estate Institute. On the corporate front, the international reporting season is winding down but we'll still hear from Home Depot, Tencent, Burberry, Walt Disney and Alibaba. There's quite a bit to monitor across the NZX and ASX too, with earnings releases due from Goodman Property, Mainfreight and Infratil here in Aotearoa, and from Aristocrat and Xero across the Tasman.

There's a lot of good investment wisdom out there. Ensure you're well-diversified, stick to quality assets, don't overtrade and keep fees to a minimum are but a few examples. One of the simplest but most important, especially it comes to shares (or any growth asset, for that matter) is to maintain a long-term view. That can be difficult, especially during periods of uncertainty (which come frequently). However, it really is non-negotiable. If you don't feel you can stick it out for at least five (if not ten) years, the sharemarket probably isn't the right place for your money.

Brace yourself, this week will be one of the biggest of the year for investors! It's not often a Federal Reserve meeting takes a back seat to other events, but the US election will absolutely be the focal point in the days ahead. The Fed decision will follow later in the week, with markets expecting a 0.25% rate cut, and monetary policy decisions will also be forthcoming from the Reserve Bank of Australia and Bank of England. Locally, the key release will be the labour force report for the September quarter. This is the last major data point ahead of the November Reserve Bank of New Zealand meeting.

The US presidential election is almost upon us, and recent polls suggest it's too close to call. That bodes well for former President Donald Trump, who performed much better than the polls suggested in both 2016 and 2020. Maybe that's why the betting odds are tilted in his favour and Wall Street now views Trump as the favourite. What might this mean for interest rates, the US dollar and the sharemarket?