Australian stocks stand to benefit from renewed U.S. interest rate cuts, with technology and cyclical names expected to outperform as global liquidity improves, Macquarie said in a research note on Wednesday.
“We think a resumption of Fed cuts will continue to favour stocks over bonds, cyclicals over defensives and growth over value,” Macquarie analysts said in a note. They compared the current backdrop to 1998, when global easing and optimism around new technology drove a broad market rally.
"Coupled with recent RBA (Reserve Bank of Australia) cuts, we see global rate cuts supporting this liquidity driven market into year-end," analysts added.
Macquarie highlighted Nextdc (ASX:NXT) and Seek Ltd (ASX:SEK) as core exposures to the artificial intelligence boom, while also backing growth names including Lovisa Holdings (ASX:LOV) and Webjet Group (ASX:WJL).
The broker said these positions build on portfolio changes it made in July to tilt further toward technology and growth.
Cyclical companies with significant U.S. exposure are also expected to benefit from stronger demand. Stocks cited by Macquarie included Aristocrat Leisure Ltd (ASX:ALL), Breville Group (ASX:BRG), CAR Group (ASX:CAR), and Flight Centre (ASX:FLT).
Gold miners remain another favoured trade, Macquarie said, adding that Northern Star Resources (ASX:NST) and Newmont (ASX:NEM) are well positioned as investors continue to increase allocations to safe-haven assets.
The broker added that improving risk appetite should also support small-cap shares, while defensive sectors such as healthcare and staples are likely to lag.
Source :
https://www.investing.com/news/stock-market-news/australian-tech-cyclical-stocks-set-to-outperform-as-fed-eases-macquarie-4243686
