Fund managers are preparing for sustained inflation and rising interest rates by avoiding consumer-facing stocks and bolstering exposure to resources.
Investment banks and fund managers are bracing for more volatility across the Australian sharemarket in the new financial year as central banks step up their delicate challenge of controlling raging inflation without triggering a global recession.
“The key issue is whether inflation can be brought back under control without triggering a recession in the US, Australia or both.” The broker downgraded Westpac to “neutral” and will approach the new financial year with that rating also on Commonwealth Bank, Macquarie and National Australia Bank. “This part of the market had a great time during COVID-19, benefiting from lockdowns and handouts. However, it will likely revert to trend as stimulus fades and spending shifts to services or essentials.”
JPMorgan remains “underweight” real estate investment trusts , as well as tech and consumer staples, while Morgan Stanley also has an “underweight” on housing-linked stocks.“[REITs] potentially face the combination of declining rents, increasing capitalisation rates and more expensive debt refinancing,” Perennial’s Bruce says.Credit Suisse believes the biggest threat facing the Australian sharemarket in the new financial year is a potential peak and decline in corporate earnings.
JPMorgan is particularly bullish on energy stocks and holds a large overweight position to the sector in its model portfolio.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Not a 'silver bullet', but new plan will better the energy market, Bowen saysA plan agreed to by the nation's energy ministers would see retailers required to pay power providers to maintain extra capacity, with the federal Minister for Energy pushing renewables.
Read more »
Border closures blamed for Sydney’s top universities slip in global rankingsThe latest rankings show there are still five Australian universities in the world’s top 50, despite all but one dropping position from last year.
Read more »
Morphing Maiwar: Brisbane River’s new look emergesAfter years of resort construction and flood damage the new shape of the Brisbane River is beginning to emerge opposite South Bank, where the penal colony began 198 years ago.
Read more »
Coalminers say they’re in the dark about looming royalty hike in QueenslandTreasurer Cameron Dick says miners will pay more tax on each tonne of coal sold next financial year
Read more »
NBN Co staff receive hefty pay bumps as bonuses scrappedThe decision is estimated to have affected about 3500 staff who received all or part of their short-term incentive bonus in the 2021 financial year.
Read more »
Trials of new Covid vaccine raise hopes of once-a-year boosterModerna shot is said to produce eightfold increase in antibody levels against Omicron in first four weeks
Read more »