Tariff Wars

A muted global market reaction so far?

With no further escalation, the implications for New Zealand from the current US-China tariff war are likely to be limited. Any escalation, however, will have a significant impact on global growth, company earnings, the stock market and the general appetite for risk. Already, some sectors may be more impacted via supply chain disruption, competitive pricing changes and the economic spill...

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Andrew Bascand | Posted on Jul 24, 2018
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Harbour Outlook - Activity moderating and costs rising

Key developments

In recent months we have highlighted how economies and markets seem at a crossroads. In June, there was further evidence of an upcoming moderation in domestic economic activity whilst cost pressures appear to be rising. Looking forward, this is a theme that remains near the top of our list of what to watch most closely on the horizon.

Looking back over June, while some macroeconomic data in Europe and Asia ...

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Harbour Team | Posted on Jul 9, 2018
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Investment Horizon: Interest Rate Cycles - Endings and Beginnings

As expected by the market, the US Federal Reserve lifted the US Fed Funds Rate this week to 1.75%-2.00%.  This was the second hike in 2018 and a continuation in a cycle that began in late 2015.  In a post-GFC environment where interest rates are eventually expected to settle at lower levels, it’s natural to ask how far away the US Federal Reserve is to the end of its interest rate cycle.  At the same time, in New Zealand, the ...

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Harbour Team | Posted on Jun 14, 2018

Harbour Outlook: Crossroads

A common theme which came through during May was economies and markets being at crossroads.  Globally, the US continued to generate solid economic data, while in Europe political tensions rose.  Domestically, solid economic activity masked a growing divergence by type of activity.  Equally, subdued near-term inflation pressures concealed the prospect of an uplift in some medium-term inflation drivers.

Bond yields fell over the month.  Economic data in the US is continuing to print at very robust levels and markets are placing an 80% chance on the US Federal Reserve delivering another hike at their upcoming June meeting.  However, this was more than offset during May by a flight to safety prompted by the failure of leading Italian political parties to form a government, heightened by the very high level of Italian Government debt and concerns that the Italians may wish to redefine aspects of their Eurozone membership.  While Italian 2-year yields initially spiked as the market priced an additional risk premium, yields in other developed markets like the US, Australia and NZ fell given their relative safety...

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Harbour Team | Posted on Jun 11, 2018

Harbour Outlook: Moving into the political season

The Harbour Outlook summarises recent market developments, what we are monitoring closely, and our key views on the outlook for fixed interest, credit and equity markets.

Key developments

Globally, equity markets bounced back in April, with concerns abating from earlier in the year on global inflation risks, trade wars, political threats to the tech sector, and funding pressures. In particular, global markets were comforted...

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Harbour Staff | Posted on May 9, 2018

The state of Infant Milk Formula in China

Harbour Senior Research Analyst Oyvinn Rimer recently took a trip to China, to investigate the state of the Chinese consumer milk market.
Disclosure: Harbour owns a2 Milk in a number of portfolios.

Having regularly visited China for a decade now, it never ceases to amaze me the sheer scale and speed of their development. Despite frequent visits, there are always noticeable changes to the land and cityscapes.

Two weeks ago, ...

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Oyvinn Rimer | Posted on May 9, 2018

The Changing Face of the New Zealand Credit Market

Over recent years the New Zealand credit market has been going through something of a quiet revolution. The borderline between bank lending and fund management is becoming blurred. Fund managers are stepping into areas traditionally dominated by banks, as regulatory reform has imposed higher capital costs on banks. Fund managers are broadening their investment choices and the range of bonds issued has become more varied. There...

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Mark Brown | Posted on Apr 30, 2018
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Trade, tech and funding tensions

Key developments

Globally, equity markets were weak over March, with most overseas markets down between 2-3% over the month.

After experiencing worries about rising inflation and the removal of monetary stimulus in January and February, in March equity investors were rattled by the Trump-led US government’s aggressive approach to trade negotiations and potential increased regulation of the technology sector. In addition, wh...

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Harbour Team | Posted on Apr 10, 2018
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Banking sector under the spotlight

An Australian Royal Commission into Misconduct in the Banking, Superannuation and Financial Services industry has started to hear evidence. The so-called Hayne interim report into banking misconduct won’t be issued until 30 September though, unlike previous reports into the banking system, this inquiry is in the full public glare and, with more than 3,000 submissions, we can expect Justice Hayne to highlight further evidence o...

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Andrew Bascand | Posted on Apr 6, 2018

How active management can provide a solution to technological disruption

The impact of technology is one of the most exciting aspects of being a professional investor. Technology can enable a business to significantly enhance its service offering, improving customer service and hopefully making an increased profit along the way – a win-win.

Disruptive technology, however, is when technology, or the convergence of multiple technologies, is sufficiently powerful enough to disrupt existing companies ...

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Oyvinn Rimer | Posted on Mar 29, 2018