Emanuel Datt
Datt Capital’s chief investment officer, Emanuel Datt, says this ASX reporting season is exposing dispersion at the stock level and that the underlying results have largely matched guidance and haven’t justified the “doom and gloom” narrative running since March.
“But forward guidance for FY27 has turned more conservative, and that’s because of the recent softening in sentiment. So our positioning is becoming a little more conservative. It’s not a good environment or a bad one, it’s really just a rotation towards conservatism,” says Datt.
“Yesterday we saw that CBA’s results have put them in a far better spot than other banks like Westpac. It really demonstrates the dichotomy between performers and non-performers, and how the market is treating it. Westpac was sold off five-odd per cent, CBA is flat. Any underperformance is being punished by investors taking a risk averse approach to equities right now. It reaffirms the importance of fundamental stock picking,” he says.
“The RBA Governor’s recent comments have reinforced caution amongst investors. The Governor didn’t rule out further rate rises. She said inflation could rear its head again. Markets love certainty on the direction of rates, but my read is that rates will probably stay steady, though the option to hike remains if inflation picks up again. That’s feeding into what we’re seeing in equity markets. I don’t think there’ll be a cutting cycle, because inflation is still front and centre for the RBA.”
