1 October we become SureStone CapitalSame team, same ABN. Our website and email addresses move to surestone.com.au.
Preparing video
Key points:
Preference for materials and insurers amid stagflation and rate uncertainty Cautious stance on major banks and REITs due to provisioning and rate sensitivity Positive on lithium, favouring Pilbara Minerals (ASX:PLS) as a quality exposure Sees value in Xero (ASX:XRO) and upside in Macquarie Group (ASX:MQG)
Julia Weng from Paradice Investment Management outlines a cautious but opportunity-focused stance amid heightened macro volatility and rate uncertainty in Australia. Weng notes markets are pricing in further rate hikes locally and a shift from global rate cuts to potential tightening, which shapes a more defensive approach to rate-sensitive sectors such as banks and REITs. Recent moves by National Australia Bank (ASX:NAB) and Westpac (ASX:WBC) to lift credit provisioning are cited as reasons to stay wary of the major banks despite a strong recent reporting season.
Weng states sector positioning is currently most favourable towards materials and selected insurers, particularly under scenarios of stagflation or ongoing geopolitical risk. In commodities, lithium stands out. Weng highlights Pilbara Minerals (ASX:PLS) as a preferred, lower-cost producer, arguing that rising demand from electric vehicles and especially grid-scale energy storage, combined with supply delays in Africa and China, could support higher lithium prices and a growing market deficit.
In technology, Weng points to emerging value in quality software names. Xero (ASX:XRO) is singled out as trading at historically low EV/EBITDA multiples despite strong cash flow and balance sheet metrics. Within financials, Macquarie Group (ASX:MQG) is viewed favourably, with Weng seeing upside from elevated corporate activity, energy market volatility and capital recycling.
