One of the most significant developments in New Zealand this month was the Reserve Bank of New Zealand’s decision to cut the Official Cash Rate (OCR) to 3%.
Mike Taylor notes that while the cut came later than he had hoped, the more dovish forward guidance signalled rates could fall further to 2.5%.
He believes such a move would provide much-needed stimulus to the economy, which has struggled over the past two years, setting the stage for recovery into 2026.
Across the Tasman, Michelle Lopez shared insights from Australia’s reporting season, which is in full swing.
Large caps such as CSL, CBA and James Hardie disappointed, but Pie Funds’ focus on mid- and small-cap companies is paying off, with many delivering solid earnings and upbeat trading updates. Retailers, in particular, are showing resilience, with some reporting sales growth of up to 25% in New Zealand.
Michelle highlighted three themes emerging from reporting season so far:
1. Consumer resilience: Stronger-than-expected results, aided by rate cuts.
2. Property market recovery: Early signs of improvement after a period of deep valuations.
3. Valuations in mid-caps: While somewhat stretched, they remain supported by earnings upgrades.
Meanwhile, global markets have rallied since April, largely recovering losses from earlier in the year.
According to Mike, improved clarity around tariffs has reduced uncertainty, while ongoing investment in artificial intelligence continues to drive both corporate spending and economic activity. From hyperscalers building data centres to widespread adoption of AI tools, the sector is fuelling growth worldwide.
Overall, both Mike and Michelle see encouraging signs. With monetary policy easing, resilient consumer demand, and transformative investment in technology, the outlook is becoming more positive for New Zealand, Australia and global markets alike.
If you have any questions, please feel free to reach out to the team.
Information is current as at 22 August 2025. Pie Funds Management Limited (“Pie Funds”) is the issuer and manager of the funds in the Pie Funds Management Scheme and the Pie KiwiSaver Scheme (“Schemes”), the product disclosure statements of which can be found at www.piefunds.co.nz. Any advice is given by Pie Funds and is general only. Our advice relates only to the specific financial products mentioned and does not account for personal circumstances or financial goals. Please see a financial adviser for tailored advice. You may have to pay product or other fees, like brokerage, if you act on any advice. As manager of the Schemes, we receive fees determined by your balance and we benefit financially if you invest in our products. We manage this conflict of interest via an internal compliance framework designed to help us meet our duties to you. For information about how we can help you, our duties and complaint process and how disputes can be resolved, or to see our disclosure statement, please visit www.piefunds.co.nz. Please let us know if you would like a hard copy of this disclosure information. Past performance is not a guarantee of future returns. Returns can be negative as well as positive and returns over different periods may vary. The information is given in good faith and has been derived from sources believed to be reliable and accurate. However, neither Pie Funds nor any of its employees or directors gives any warranty of reliability or accuracy and shall not be liable for errors or omissions herein, or any loss or damage sustained by any person relying on such information, whatever the cause of loss or damage. No person, including the directors of Pie Funds, guarantees the repayment of units in the Schemes or any returns of units in the Schemes.