A material day for ASX tech.
The bounce today was largely a function of the aforementioned US inflation print (out overnight) which reversed some of the recent uptick in yields.
The wealth platforms benefitted from ongoing flows, at the expense of the legacy platforms (everyone from CFS to AMP), a trend that we think will continue.
The lower real rates were also a net positive for the gold miners, which featured prominently on the leaders list.
The other end of the market was more a hodgepodge of odds and sodds. Energy, interestingly, was a laggard, despite another positive day (and night, as implied by futures) for the oil price. China’s attempts to increase coal production, and to release strategic reserves, arguably did the damage to sentiment, if nothing else, for the energy plays.
Redbubble’s trading update was a disappointment to market, and we continue to think that the expected earnings trajectory looks overly bullish.
Overall, we remain underweight IT, as a sector, viewing it as a) overvalued and b) a long duration growth play, which is unappealing given our view on rates.
That said, we do have an exposure to ASX (the monopoly bourse operator) which, a bit like CSL, provides the portfolio with a solid factor loading to Quality (as a factor premia).
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