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Harbour Macro Research Day

In recent years, Harbour’s internal six-monthly Macro Research Day has been an important part of our research calendar. It provides an opportunity to undertake a thorough review of the medium-term outlook for the macroeconomy and its implications for fixed interest, equity and multi-asset portfolios.

Our Macro Research Day last week commenced with presentations by economists from two of New Zealand’s largest banks discussing key drivers of the New Zealand economy. This included business confidence and the potential impact of the Reserve Bank capital requirements which has recently been one focus of our research agenda.

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Harbour team | Posted on Apr 16, 2019
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Harbour Outlook: Records broken

Global equity markets continued to strengthen in March with the MSCI World index (in local currency) returning 1.6%, bringing the return for the quarter to 12.6%. Markets were buoyed by a dovish statement from the Fed, whose “patient” approach is unlikely to see any rate rises for some time. A “great” trade deal has been touted between the US and China, which has breathed further life into investment markets...

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Harbour Team | Posted on Apr 8, 2019
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Slowing but still growing

Key points

  • Share markets continued their new year rally, aided by positive noises from trade negotiations and further dovish rhetoric from the US Federal Reserve (the Fed)
  • Economic data released during the month continue to portray lower economic activity, especially in Europe and China, though China has looked to combat this through a range of stimulatory measures
  • Domestically, the economic outlook is continuing to soften, though at this point, the transition appears to be from strong to moderate growth, with risks to the downside
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Harbour team | Posted on Mar 8, 2019
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Harbour Outlook: Fed Pause Party

Global equity markets rebounded strongly in January, led by the S&P 500 which had its strongest January since 1987. The sharp recovery in risk appetite reflected more dovish statements from the US Federal Reserve (the Fed) which is now expected to pause its interest rate hiking cycle until the cross currents of slowing global growth, market volatility and “tightened” financial conditions pass. A better than expected kick off to the US earnings season further whetted investors’ appetite towards risk assets...

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Harbour Team | Posted on Feb 8, 2019
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10 Risks to Watch in 2019

When investing in an uncertain world, it is useful to distinguish between a core view of the most likely outcome for economies and markets, and the key risks that could challenge that assessment.

In our most recent monthly Harbour Outlook we set out our core view. [1] Markets have experienced goldilocks conditions over the past 5 years, with solid economic growth, low inflation and low interest rates. Through 2018 we have see...

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Harbour Team | Posted on Dec 17, 2018
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US earnings season delivers, but raises questions about future growth

Q3 US Earnings season was strong with 410 of the S&P 500 stock index beating consensus expectations. What wasn’t so strong was earnings guidance, which has led the market to downgrade future earnings expectations. While the outlook for US earnings looks less certain, we take some comfort from macroeconomic data which paints a solid picture of economic expansion.

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Chris Di Leva | Posted on Dec 13, 2018
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Outlook: Equity Market Pullback

Key developments

For much of the year, the main theme has been global bond yields inching higher as US Federal Reserve continues normalising interest rates; while at the same time equity markets also moved steadily higher, supported by solid global growth. However, finally in October equity markets experienced a noticeable and widespread pullback.

Chart 1. Equity market levels since the beginning of 2018

The New Zealand eq...

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Harbour Team | Posted on Nov 6, 2018
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Investment Horizon: Harbour Macro Research Day

Our internal Macro Research Day is a chance to re-visit the research that anchors our medium-term view.
Locally, we expect economic activity to moderate rather than slow sharply, and the RBNZ to remain on hold for a considerable time ahead to provide the best chance for core inflation to lift above 2%.
Globally, we see interest rates rising, but with monetary policy still supportive for financial markets while global inflation...

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Harbour Team | Posted on Oct 17, 2018
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Outlook: Low Local Interest Rates

Key developments

In September we saw a continuation of the theme of low local interest rates in New Zealand, in a broader global environment where bond yields overseas have crept higher. This provided support for the local fixed interest and equity markets, while the NZ dollar remained at its recent low levels.

The tone in global markets has remained relatively cautious, with worries about trade tensions, pockets of strain ...

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Harbour Team | Posted on Oct 5, 2018
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Harbour Outlook: Crisis of confidence

It was a strong month for absolute returns in New Zealand asset classes in August, with the NZX50 sharemarket index rising around 4.4% and the NZ Government bond index generating a return above 1.2%.   This strong performance of financial markets sat in sharp contrast to the continued weakness of New Zealand business confidence, which is shaping the political and policy-making environment. 

As usual there was a laundry list of global developments highlighting the ongoing risks to the global backdrop:  heightened US trade tensions, this time with Canada; wobbles in the Italian banking sector and sovereign bond market; emerging market strains in Turkey and Argentina; and political changes in Australia generating the 5th prime minister in five years.  Despite these developments and headlines, global macroeconomic data, particularly in the United States, continued to show a picture of solid actual economic activity running near economists’ expectations...

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Harbour Team | Posted on Sep 10, 2018