Rudi's View | 4:56 PM
Conviction Buys and sector favourites; for those investors looking to amend strategies and portfolio exposures.
By Rudi Filapek-Vandyck, Editor
Life aint fair. The USA and Israel go to war and the Australian economy and share market carry the burden.
In contrast, both the S&P500 and Nasdaq indices in the US posted fresh all-time record highs on Wednesday (Thursday morning Australia time).
The following excerpt from a survey conducted by RBC Capital might shine some light on the 'why':
"When thinking about the outlook for the US equity market broadly, we think these results reiterate the idea that the US is a global safety trade in the context of the war and seems likely to continue benefiting as long as concerns about the war’s duration remain elevated, given that the survey suggests the US is the best regional choice from a valuation perspective and will be the region least impacted by effects from the war.
"The results also call into question whether the US will continue to lead if and when war fog clears, since the US is seen as the region benefiting the least in a de-escalation scenario.
"But at the same time, the survey results highlight how it is difficult to find better alternatives to the US. For example, Europe stands out in our survey for a perceived lack of valuation and demand appeal among our stock pickers.
"This is an important point to take note of, as US-based and US-focused equity investors we’ve met with recently have been eager to explore why the US has been such a strong relative and absolute performer since the war began."
When or how (or why) the war in the Middle East will end is at this point anyone's guess. I have no better knowledge (or gutfeel instinct) than others, as also explained in Monday's writing:
https://fnarena.com/index.php/2026/04/22/rudis-view-the-risk-of-disappointment/
On Thursday afternoon, as I am writing these sentences, our inbox receives yet another sector update featuring reduced forecasts, just to be safe, this time from stockbroker Morgans on Australia's industrials companies; Amcor ((AMC)), Brambles ((BXB)), Reece ((REH)), and Reliance Worldwide ((RWC)).
Slower growth and higher energy prices create headwinds for all these companies, but Morgans is more cautious on housing-exposed companies and therefore prefers Amcor and Brambles (amidst downgraded forecasts).
It should be clear to all and sundry the Australian market has quite a few challenges to deal with over the months ahead. Some wise insights from Michael McCarthy, CEO, Moomoo ANZ:
“I’m seeing signals from bond markets, currency markets, cryptocurrency markets, and share markets that are all lining up with the same message - growth is slowing and interest rates are headed higher.
"The best time to prepare for volatility is at the beginning when you devise your strategy. The next best time is when markets are going well. The third best time is now, because it’s never too late to act.”
To help investors with repairing/preparing their portfolios for what might follow next, the selection of Conviction Calls below might come in handy.
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