Greg Smith: Devon Funds Management spokesperson on job creation in the US, unhappy Amazon investors, and Super Bowl ad prices

Job creation in the United States slowed through January, but payroll reports have indicated unemployment is falling and wage growth is picking up. 

Amazon investors didn't like what they heard about the company's guidance, despite a positive delivery in the cloud division. 

In Super Bowl news, ad slots are going for roughly $8 million, do investors have reason to be wary of the outcome? 

Greg Smith of Devon Funds management talks to Mike Hosking. 

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Episode Transcript

Speaker 1 (00:00):
Now from Devon Funds Management, there's Monday morning, Grigsmith, morning.

Speaker 2 (00:02):
To you, Morning to you, Mike.

Speaker 1 (00:04):
So the number itself job wise a little bit light.
So where's all this lead the feed?

Speaker 2 (00:09):
Yeah, probably leaves the Fed on hold for now, I
would have thought. So it's a bit of a bit
of a mixed bag. Markets are now so saying fifty
to fifty chance for rate cut in June. So yeah,
job creation loan expected's largest economy pears to be slowing
down a ted. So you look at the non farm
payrolls are up one hundred and forty three thousand, so
that it was less than half of what we saw in December.

(00:29):
It was below forecasts as well, job grave concentrating, healthcare, retail, government,
usual suspects there. But on the brighter side, there were
upper revisions to the counts for December and November, so
they were revised upwards by a total of one hundred thousand.
And you look at the unemployment rate, Mike, that actually
went down to four percent. So yeah, the population and
participation in terms of labor forces actually increasing. This that's

(00:51):
that's good news. Wages also raised moren expected, so four
point one percent on an annualized basis, so well, you know,
parts of the jobs print was soft. Wasn't a disaster.
I mean, overall, you look at the jobs market, it
seems in pretty good shape. So I think that won't
compel the feed to rush to cut rights in the
next few months. I mean, it was interesting the Trump administration.
They see the job numbers were a poor reflection on

(01:13):
Biden the presidency. There's also some other data. They look
at the numbers for the year end in March twenty
twenty four and they were revised down by almost six
hundred thousand. All the officials they neglected to mention there
was a similar downward revision during Trump's first term in
pre COVID. But hey, ho.

Speaker 1 (01:31):
Amazon, So the numbers I thought looked reasonable. But the
guidance isn't issue, isn't it.

Speaker 2 (01:36):
Yeah, that's right, it's the numbers on the face that
we're strong. So sales for futh I just cou't maany
one hundred and seven point eight billionaire they had need income.
They had almost double to twenty billion. They're actually also
of course cutting costs, and then you know there's something
down their workforce post COVID and all that sort of
stuff online. Businits doing pretty well, so that's obviously good

(01:56):
barman for the air market. Generally, they're the third biggest
platform and the global digital advertising market, so revenues they
are eight eight percent. Cloud computing service unit that did
pretty well. Revenues up nineteen percent, twenty eight point eight billion,
investing around about a one hundred million the she had
to turn itself into an AI supermarket. But they did
warn a couple of things that she might have said.

(02:17):
They could be capacity constraints due to power capes. We've
heard that before, end the supply chips, but it was
mainly about the guidance, as you said, and the shears
actually fell four percent. So they reckon revenue growth from
the first quarter is going to be five to nine percent.
That would actually be the slowest on record in their
twenty eight year history in the public market. It seems
as strong US dollars to blame. They reckon there's going

(02:38):
to be foreign exchange impacts of two point one billion.
That's all about converting the money they overseas back into
US dollars. The US dollars it's highest level two years
larger on the back of Trump coming in and it's
a bit of a head win for for other tech
companies as well. Might So you look at Amazon, twenty
three percent of their salves are offshore, but Apple, Meter, Alphabet, Microsoft,

(03:00):
and Tesla all in at least half of their revenue
from overseas. So I think this could be something to
watch in particular inflation persists, and you know, the FED
holds off cutting rates even further, maybe towards the end
of the year.

Speaker 1 (03:11):
Now I read this yesterday and it's as much as
you don't want to believe that the numbers don't lie.
Every time Philadelphia wins anything, and they're in the super
Bowl today, it's ugly.

Speaker 2 (03:22):
Yeah, it depends on whether your superstitious. So we're talking
also about the the baseball in any sort of team
involving Philadelphia. So historically that you know, their wins have
coincided with some pretty bad stuff. So we had the
nineteen twenty nine stock market crash, we had quite a
few recessions nearly nineteen hundreds, and then the Eagles they
won their first Super Bowl in twenty eighteen, so that's

(03:42):
a course of celebration where you're not for the stock markets.
They actually had their worst year since two thousand and eight,
So it depends on whether your superstitious, and I guess
they might. For the record, you probably know this Kansas
City Jeeps a slight favorite. There's some pretty cool other
stets around as well. If you look at and talk
about tires and eight million bucks a commercial, that's what

(04:04):
some companies are paying some pretty core adds. They're a
bit of a I think they look at him in themselves.
Evidently seal he's going to be promoting mountain dew of
all things. Last year we had more one hundred and
twenty three million people turn in the roovy and it
was five hundred and fifty million dollars. So yeah, advertising
for big sports events are still going pretty pretty much gangbusters.
And another notable fact about the super Bowl, right, Donald

(04:26):
Trump will be in attendance. Evidently first time a sitting
president will attend.

Speaker 1 (04:30):
And weirdest statistic I've ever heard. It seems incomprehensible that
if you're the president of the day, you're not at
the super Bowl, but there you go. What are the numbers?

Speaker 2 (04:38):
Yeah, exactly, heye, So that the US marks were a
bit low on the on that job's read. So that
now I was down one percent. Forty four to three
zero three s and P five hundred that was down
one percent as well, six zero two five Nare's that
down one point four percent, nineteen five to two three
foot see down point three percent in the UK, nick
Guy down point seven percent. ASEX two hundred was actually
down point one percent eighty five one one with the

(04:59):
Domino's pizza that's sizzled twenty one percent higher though hutting
underperforming stores. In Japan, we had a good day Insidys
fifty up to half percent, twelve nine zero two, gold
up five bucks, twenty hundred and sixty one an ouncets
around a record oil seventy one dollars a barrow up
for thirty nine cents. Currency markets key was week around
to the US fifty six point six Ozzie dollar ninety

(05:20):
point two, down slightly. We're up against Stirling slightly forty
five point seven this week. Mike plenty going on likely.
We've got cards spending, we've got a manufacturer of sector print,
We've got food inflation, We've got earning some vulcan steel
and scaler up off shore. We've got use inflation, UK
GDP and plenty of results I've got McDonald's, Coca Cola,
Sony Honda and Cross the Tasman, JB High Fight and

(05:43):
common Off Bank of Australia. So plenty going on, and
ye's say go to the chiefs.

Speaker 1 (05:48):
All right, fair enough and lucky we've got to find
day week to deal with it all. Go well, mate,
Greg Smith, Devon Funds Management.

Speaker 2 (05:54):
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