05 May 2021
Australian stocks rose 3.7% over April with the main areas of strength being technology (+10%) and Mining (+7%). A slight decline in long term interest rates may have enabled a rebound in some of the key technology stocks while the major miners were bolstered by a higher iron ore price (+13%).
The pace of economic recovery in Australia and abroad is accelerating in response to unprecedented fiscal and monetary stimulus. In Australia we have an unusually high savings rate as overseas travel has not been an option over the last year and international borders are unlikely to re-open until mid- 2022. This should result in buoyant consumer spending in the year ahead.
We see the best opportunities in a number of structural growth and infrastructure stocks which have been left behind as the market focuses on near-term cyclical trends.