Nate Thooft, CIO and senior portfolio manager at Manulife Investment Management, joins BNN Bloomberg to discuss the markets amid tariff uncertainty. <\/p>\n
The constant battle over tariffs in the last year has \u201cexhausted\u201d stock markets, which are likely going to see big wins in technology earnings and metal prices this year, according to a market analyst.<\/p>\n
The current environment shows that markets are not seeing a major upside or downside in stocks, says Nate Thooft, chief investment officer and senior portfolio manager at Manulife Investment Management.<\/p>\n
\u201cI think that\u2019s what the market is looking through to say, \u2018Hey, we\u2019ve seen the worst case scenario. We\u2019re not visiting those high levels of ultimate tariff levels,\u2019\u201d says Thooft.<\/p>\n
With the U.S. Supreme Court recently striking down U.S. President Donald Trump\u2019s sweeping tariffs under the IEEPA Act, and the possibility of renegotiating or implementing an additional 15 per cent tariff, the level that will actually be priced into the market is lower than what investors expected at the start of the year, says Thooft.<\/p>\n
\u2018Lofty expectations\u2019 from Nvidia<\/p>\n
Thooft says expectations from AI companies are really high, with Nvidia representing five per cent of the global equity market and serving as a major indicator of what capital expenditure looks like.<\/p>\n
\u201cThey have lofty expectations,\u201d said Thooft.<\/p>\n
\u2018Greater concerns about longer-run inflation levels\u2019<\/p>\n
Thooft says investors are now more reluctant to hold longer-term government debt.<\/p>\n
He says that with central banks lowering rates, it impacts the short end of the yield curve, which includes bonds due over the next couple of years.<\/p>\n
If you look at the longer end of the yield curve, he says, there are greater concerns about longer-run inflation levels.<\/p>\n
\u201cThere\u2019s greater concerns about fiscal spending and debt levels,\u201d says Thooft.<\/p>\n
He says there is going to be a steepening of the yield curve and, as a result, investors should focus on their fixed-income portfolios.<\/p>\n
U.S. profit growth \u2018biggest tailwind\u2019<\/p>\n
Strong U.S. corporate profit growth is emerging as the biggest support for equity markets this year, despite persistent geopolitical risks and trade tensions.<\/p>\n
\u201cThis is the biggest tailwind in the markets right now,\u201d said Thooft.<\/p>\n
Underlying earnings are expected to grow by more than 10 per cent year over year across most major regions, he said adding that emerging markets could see earnings growth of 15 to 20 per cent on a broad index basis.<\/p>\n
\u201cSo we\u2019re seeing a pretty broad array of both countries, sectors and companies participating in upside when it comes to earnings growth in 2026,\u201d said Thooft.<\/p>\n
Concerns about oil and gas<\/p>\n
Thooft says geopolitical dynamics are concerning when it comes to oil, particularly the situation in Iran, which is significantly affecting global oil markets by driving prices higher through a \u201crisk premium.\u201d<\/p>\n
\u201cWhich is the rise you\u2019ve seen over the last month or so,\u201d says Thooft.<\/p>\n
\u201cBut there is a potential, particularly if supply is cut off further, oil prices could go up even more, and that\u2019s a risk we have to think through.\u201d<\/p>\n
Optimistic about precious metals<\/p>\n
Aside from oil and gas, the other focal area for geopolitical risk this year is precious metals, says Thooft.<\/p>\n
\u201cWe like them a little bit more than we did,\u201d said Thooft.<\/p>\n
He says geopolitical uncertainty is expected to provide strong support for precious metals, like gold and silver.<\/p>\n
\u201cWhen we look at the pillars that drive gold prices, everything from inflation, uncertainty, geopolitical concerns, debasement of fiat currencies, things like that, those are all still flashing green in our view,\u201d says Thooft.<\/p>\n
\u201cSo generally speaking, the drivers that have driven gold to the levels that we\u2019re already at, they\u2019re continuing to be in place.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Nate Thooft, CIO and senior portfolio manager at Manulife Investment Management, joins BNN Bloomberg to discuss the markets…\n","protected":false},"author":2,"featured_media":300101,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":{"0":"post-300100","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-new-zealand","11":"tag-newzealand","12":"tag-nz"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/300100","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=300100"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/300100\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/300101"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=300100"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=300100"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=300100"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}