Company Interview / Are these ASX stocks in for a tough second half?

Key points:

View that Australian equities continue to underperform amid weakening economics and earnings Preference for resources over banks, with commodities seen as benefiting from structural demand Caution on consumer and discretionary sectors as higher rates and wages pressure earnings

Australian equities face further underperformance against global peers, according to Jason Todd from Ten Cap, who maintains a cautious six‑month outlook on the local market. Todd frames Australia through economics, valuations and earnings, arguing the backdrop is weakening, valuations are not cheap, and earnings are likely to trend lower. He highlights that global peers such as Korea and Taiwan are significantly ahead, and that the US market is being driven by the AI‑led tech bull market.

Technology remains just 4.5% of the Australian index, yet Todd sees ongoing “bottom fishing” in discounted software names after the “SaaS apocalypse”. He attributes Australia’s lag not to a lack of tech, but to pressure in major sectors. Resources appear more attractive than banks, in his view, with commodities such as copper and aluminium supported by structural demand and less domestic economic exposure. He expects further flows into resources, arguing positioning is not yet stretched.

Banks, by contrast, face earnings risk from subdued housing, slower credit growth and tax and budget impacts. Todd also flags challenges in portfolio construction, with defensives like healthcare names including Cochlear (ASX:COH), CSL (ASX:CSL) and ResMed (ASX:RMD) under strain. He remains wary on consumer and discretionary stocks as higher rates and wage decisions filter through.