The details of the latest inflation report, which showed quarter-on-quarter headline inflation and the RBA’s preferred underlying measure (trimmed mean CPI) higher than consensus estimates, sends a worrying signal for the central bank. While annual inflation slowed from 4.1% to 3.6%, due to base effects, it is nowhere near as fast or deep enough for the RBA to begin an easing cycle anytime soon.

Following the pull back in the the ASX 300 this month in response to an upward shift in US interest rate expectations, attractive investment opportunities have emerged in certain companies that have become oversold despite still strong underlying fundamentals. The largest drawdowns have been among the growth-orientated and interest-rate sensitive sectors where the valuation impact of higher bond yields has been the strongest. This backdrop has created an attractive opportunity to add exposure to Aristocrat Leisure, Breville, and Collins Foods.

Equity markets have pulled back in April but remain well up on levels of 12 months ago. As we have discussed recently, a correction was looking overdue given the pace of the advance over the past year, particularly in respect of the US equity market.

The ASX-listed gold miners have lagged this year’s rally in the physical gold price, which is out of step with the sector’s long-run tendency to significantly outperform the gold price during gold bull markets. As we discuss in this report, this has created an attractive opportunity to invest in the sector.

Gold has had a stellar run this year, reaching all-time highs of $2375/oz. Indeed, gold is outperforming most major equity markets, with a gain of 15% year-to-date.

A confluence of factors has recently pushed oil prices to $90 a barrel. Yet Australian energy stocks have lagged behind the price of Brent crude oil and global oil majors so far this year.

Amidst a challenging year to date for the resources sector, copper has been one of the standout commodities of 2024 with spot prices approaching 12-month highs. The recent rally in the copper price has been driven by the pull forward of expectations of market deficits into 2024 following significant supply cuts in recent months. In our latest report we share an update on recent copper market dynamics and explore the attractive long-term outlook for the metal.

Bank stocks have rallied over the last 3-4 months. The recent bank stock surge appears overdone. Valuation multiples have risen significantly, and are now stretched relative to historical norms. Current valuations are disconnected from fundamentals, given the tepid (+2%) earnings growth over the next 2 years. In our latest report, we discuss why the rally looks overdone, even with the possibility of a soft landing and interest rate cuts in the next 12-18 months.