Rudi’s View: AI Updates, Hot Favourites & First August Results

rudi-views
Always an independent thinker, Rudi has not shied away from making big out-of-consensus predictions that proved accurate later on. When Rio Tinto shares surged above $120 he wrote investors should sell. In mid-2008 he warned investors not to hold on to equities in oil producers. In August 2008 he predicted the largest sell-off in commodities stocks was about to follow. In 2009 he suggested Australian banks were an excellent buy. Between 2011 and 2015 Rudi consistently maintained investors were better off avoiding exposure to commodities and to commodities stocks. Post GFC, he dedicated his research to finding All-Weather Performers. See also "All-Weather Performers" on this website, as well as the Special Reports section.

Rudi's View | 4:51 PM

In today's edition:

-August Updates Are A-Comin'
-The Era Of Polarisation
-Morgan Stanley's Hot Favourites For August
-Attention Returns To AI Infrastructure
-FNArena Talks
-Review All-Weather Model Portfolio
-Best Buys & Conviction Calls

By Rudi Filapek-Vandyck

August Updates Are A-Comin'

The Australian corporate results season has officially started but, as per unofficial tradition, the pace of corporate releases remains rather glacial this early in the month.

By week's end FNArena's Corporate Results Monitor will only list some 18 companies, not more than a drop in the ocean given that number will be around 385 or so by early September, but that's just how this cookie crumbles in Australia nowadays.

Are there any conclusions that could possibly be drawn this early?

Nah. But we do note the REITs have been a positive contributor thus far, as anticipated by analysts covering the sector.

Plus all of ResMed ((RMD)), News Corp ((NWS)) and Credit Corp ((CCP)) managed to outperform forecasts while updates from REA Group ((REA)), AMP Ltd ((AMP)) and Pinnacle Investment Management ((PNI)) contained enough good news to keep the share price well-supported.

One might say the season has begun on a relative positive note, but let's not get overly excited just yet. There's literally a deluge in releases awaiting us over the coming three weeks (plus a bit).

By this time next week, the numbers will be a lot larger, but the bulk is reserved for the final two weeks of the month.

FNArena is keeping a close watch daily: https://fnarena.com/index.php/reporting_season/

The Era Of Polarisation

A timely reminder entered the inbox this week: it's not just share markets that are heavily polarised nowadays, the same observation applies to the economies underneath.

Economists at Oxford Economics shared the following observations about the US economy:

"The economy has slowed and is growing below its short-run potential, but this hasn’t altered the bifurcated nature of the consumer, business environment, and labor market. This leaves the economy more vulnerable and masks some of the fissures beneath the aggregate economic data.

"High-income consumers are doing well while lower-income households are struggling. Trade and fiscal policy will reinforce the bifurcated consumer. The net impact of tariffs and fiscal policy will reduce the lowest-income quintiles' real disposable income by 2.5%-3% while boosting the highest incomes by the same amount.

"As large businesses can weather tariffs better, they outperform small ones, reinforcing recent labor market weakness. Employment among small businesses, the backbone of the labor market, has barely budged and fundamentals remain unfavorable.

"It’s also a tale of two labor markets. It’s a good labor market for those with a job, but a challenging one for those who are unemployed or not in the labor force but want a job. The bifurcated labor market can change quickly if layoffs increase, a significant risk to the forecasts."


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