Media

Juhi Dhawan, PhD, Macro Strategist

Wellington Management is responsible for managing the Devon Global Sustainability and Global Impact Bond Fund. Recently, macro strategist Juhi Dhawan, PhD, prepared the following article on the impact of AI on corporate profits in the US. We hope you find it interesting.

AI has the potential to revolutionise the workings of the US economy, but we are still in the early days of the adoption process. In this note, I discuss the progress to date, the path forward, and the macro and market effects. Among the key takeaways from my research:

The New Zealand economy has faced a challenging few years. As of September, the unemployment rate stands at 5.3%, the highest since 2016. House prices are down over 10% nationally from their 2021 peak, with Auckland and Wellington faring worse, down 20% and 30% respectively. Let’s not forget the cumulative inflation Kiwi households have endured: the CPI basket is 25% higher in June 2025 compared to June 2020. However, the positive lagged effects of easing monetary policy are beginning to show across many of the companies we follow.

Electricity demand is rising rapidly in many countries. This is being driven in part by surging data centre expansions, broad industrial electrification, growth in electric vehicles, and the rapid integration of artificial intelligence into nearly every sector. The US is experiencing a significant movement in electricity demand, with the same drivers applying to Australasia, too.

August’s reporting season drove pronounced share price swings across New Zealand and Australia. In Australia in particular, the reporting season was the most volatile on record, with a standard deviation of result day relative returns of 8.3%. Both the NZX and ASX faced conflicting macro signals: softer global growth prospects, ongoing trade skirmishes, and rising hopes of rate cuts as inflation prints continued to support a more dovish stance from central banks.

Devon Funds Head of Retail Greg Smith talks to ZB's Mike Hosking about the market rocket fuel provided by Fed Chair Jerome Powell at Jackson Hole. He also looks at why Kiwi dairy farmers are in party mood following Fonterra's asset sale announcement and discusses the contrasting tales from the results of SkyCity and SkyTV. 

To listen to the full market update by Greg Smith please click here.

Devon Funds Head of Retail Greg Smith talks to ZB's Mike Hosking about the cause for celebration in the NZ manufacturing sector which is back in expansion mode. He also discusses the tailwinds from net migration which are now barely a stiff breeze, but are blowing strongly from tourism. Offshore he looks at why US retail sales are strong yet consumers are becoming more uneasy about tariffs.

To listen to the full market update by Greg Smith please click here.

Devon Funds Head of Retail Greg Smith talks to ZB's Mike Hosking about the differing reactions to results from travel platform Expedia, retail brand Under Amour and delivery service Instacart, and what they say about the state of the US consumer. Also up for discussion, is the tariff confusion around gold bars, and data showing that deflation might be abating in China. 

To listen to the full market update by Greg Smith please click here.

An interest piece written by Greg Smith, Head of Retail at Devon Funds.

Devon Funds Head of Retail Greg Smith talks to ZB's Mike Hosking about the big news over the weekend with the US agreeing to a deal with Europe, its biggest trading partner. He also discusses how this will be welcomed by the likes of Volkswagen which delivered a result heavily impacted by tariffs. Meanwhile, Chinese companies will also be looking for some trade relief with profits falling last month. 

To listen to the full market update by Greg Smith please click here.

Devon Head of Retail Greg Smith discusses with ZB Mike Hosking the quite different market reactions to results from mega-cap stocks Alphabet and Tesla. Also up for discussion are the numbers from computing giant IBM. 

To listen to the full market update by Greg Smith please click here.