Rudi's View | Jul 03 2025
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By Rudi Filapek-Vandyck, Editor
Strategists at Wilsons see the US economy slowing in H2, but without any dramas attached as long as Trump & Co don't go crazy again on tariffs.
As far as Australian equities are concerned, one more RBA rate cut this year should provide support but valuations are already seen as "full" while there's earnings risk on the horizon, thus Wilsons' prefers a Neutral stance for now.
Portfolios are recommended to have an Overweight allocation to both local bonds and alternative assets (private credit, private equity, and real assets). International equities should be Underweighted.
The Federal Reserve is expected to deliver its next rate cut in September and is still expected to cut multiple times over the year ahead. The result should be slightly lower bond yields by this time next year.
Wilsons strategists would not be surprised if equities go through a rougher patch near term, but they remain positive on a twelve month view.
"Investors will likely be best served by a more globally diversified portfolio over the balance of 2025."
The strategists also remain positive on the outlook for gold medium to longer term.
Wilsons' Model Portfolio added Pinnacle Investment Management ((PNI)) in June while selling out of Mac Copper ((MAC)). The strategists have given up on the prospect of a higher bid to Harmoney Gold's $18.90 offer.
Pinnacle is seen as a compelling multi-year growth story whose share price has failed to recover in full from the April mayhem.
Wilsons' Focus Portfolio has large overweight allocations to ANZ Bank ((ANZ)), CSL ((CSL)), ResMed ((RMD)), and Collins Foods ((CKF)).
Other high-conviction exposures include Goodman Group ((GMG)), TechnologyOne ((TNE)), Telix Pharmaceuticals ((TLX)), WiseTech Global ((WTC)), and Xero ((XRO)).
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Stockbroker Morgans' strategy update for the winter period ahead has seen the bias tilt towards mid and small cap companies and on quality cyclicals, while any exposure to expensive defensives --like banks and telcos-- is recommended to be reduced.
Preferred sector exposures are financials, industrials, and agriculture, but also notable laggards healthcare, resources and energy when the global macro-economic outlook brightens again.
When it comes to the local technology sector, the advice is to "buy the dips", with Key Picks WiseTech Global ((WTC)) and Megaport ((MP1)).
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