Investment Specialist Greg Smith was on Newstalk ZB with Heather du Plessis-Allan this morning, discussing more green economic shoots appearing in New Zealand in the form of strong card spending numbers and a read on the manufacturing sector. He also looks at why investors sold down shares in chip giant Broadcom despite a super strong result, but jumped back into yoga pants maker Lululemon.
Listen here or read the transcript below:
Greg Smith of Generate is with us. Morning, Greg.
Morning Heather.
More green shoots. How good, how good.
More good news, more green economic shoots. So Kiwis, we opened our wallets a bit wider in November. Card spending at 1.2% that that was actually strong than most were expecting. We’ve had a few positive months as well. So it's good. Strung those together. Retail spending 1.6 higher than a year ago. Fuel prices have been part of it, but even if you strip that out, we're at 1.1% so that's good. Black Friday here, they're still relevant. We do like a bargain it seems. Durables jumped 2.1%, apparel surged 3.4%.
Hospo bounced back. So that's good news for the industry. We're getting out and about. Consumables that ticked up, still the strongest category over the year that I suppose reflecting high food prices, but it was a good news story and it's pretty broad. So outside retail spending, travel, health, courier services spend that was up almost 4% and also services, we're going to get a print on that today and that was up 2.8%.
So I think overall, it just looks like consumers are feeling a little bit less squeezed, I suppose with interest rates coming down more of that to feed through. Overall cards spending at 1.9% last month, 185,000,000 transactions, $10 billion. And I think, I suppose it's a good sign. We will want to see what it's like when you strip out the Black Friday, Christmas and new year sales effect.
And so we'll get a clear read on that in January and ahead of the RBNZ decision. And obviously a new person at the helm, as you point out. But yeah, mortgage rates going lower as well, loans resetting. We've also got a bit of modest job growth, to look forward to so 2026 the outlook is quietly improving. And that's of course, after a tough few years. Yeah, we'll take that.
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And they've also got a little bit of good news for the manufacturing sector?
We have as well. So I suppose it's quite related, isn't it? This is the BNZ business you see on performance and manufacturing index. So that held above the 50 level or that's expansionary territory, 51.4 in November. So it's not surging, but the sector is quietly expanding.
So if you look at the core sales, they were down a touch, but there is restarts at Methanex and Tiwai, so that was affected. But yeah a real bright spot and this is great news for those, I suppose, job hunters and the like. The PMI employment index jumped strongly. That's the biggest monthly lift since 2021. So it seems firms might be gearing up and rather than winding down, that's pretty good. New orders they eased a little bit, but also above 50.
So, you know, after a long stretch in contraction, we're actually seeing a meaningful shift higher. And just also as well, if you compare to Australia, I think that's also interesting as well. So we've matched their pace and given our deeper downturn it's a quiet victory. We're coming off a low base, but that means more upside, particularly as we get those rate cuts feeding through. So the sector here it's not roaring yet, but we're looking like we're going to get a slow, steady, durable recovery. And it's again, things looking better than they have in a long time, which is great.
Then what happened to the tech sector on Friday?
Yeah, it unwound a bit. So obviously, you know, lots of some nervousness around AI and it has sort of keep going much for the year. But you had Broadcom, they're a big chip maker. So they actually beat on earnings sales of chips. They're up 74% revenue, 18 billion.
But I suppose what we've seen with a few other releases is there's some concern of what this is all costing in terms of building Server and AI systems. Management they sort of made the comment that AI demand was a moving target. Investors reacted to that. Huge backlog they've got here that's 73 billion, just the size of it. Disappointed. And they did say that backlog was a minimum.
Stock down 11% and it's spread across the AI sector. Just to be fair, those shares are up 55% and that's reflective I suppose of the run you've had. But NVIDIA that was lower, AMD, and just quickly a different mood over at Lululemon yoga pants maker it that was up 10%. Upgraded its four- year outlook. They were looking for annual revenue of around about $11 billion. Sales down 3%, they’ve had a bit of competition from upstarts there, but Asia is going well, 60% of sales.
On the other side, those shares are down more than 50% this year. So put that 10% rise in context. But they've got a new CEO might reignite innovation and sharpen the brand's direction. So let's wait and see there.
Yeah, listen, give me the numbers, please, Greg.
So the S&P 500 was down 1.1% and the Dow was down half percent and NASDAQ down 1.7%. So yeah, obviously mainly due to that tech reaction Footsie was down .6%. Better news for the Nikkei in Japan, up 1.4 percent 5836. ASX 200, up 1.2 percent 8697. We were up .1% in NSX 50 13406. Commodities gold up 19 dollars, 4299 an ounce. Oil down $0.16, 57.44. Currencies: Kiwi flat against the US 58.1. Up a tad against the Australian dollar 87.25. Likewise the British pound, 43.4. Japanese yen 90.5 touch higher as well.
This week here that lots going on locally. We've got that services print today. Food inflation, half-year economic update, third-quarter GDP, consumer and business confidence and another dairy auction. So let's look for some more green shoots.
Offshore: non farm payrolls in the US, retail sales, inflation, housing data. It's all feeding through now and we've got rate decisions. Speaking of that, in Europe, UK and Japan. Earnings, we've got a few big wigs as well. So Micron in the tech sector, FedEx and Nike. Thank you so much Greg. Look after yourself. Have a nice day.
That is Greg Smith from Generate Wealth and Kiwisaver specialists.