It has been a strong start to the new financial year with the Alpha Plus Fund rising 2.8%. While market leadership remains volatile, we think cyclicals will begin to show more consistent performance as RBA rate cuts help put a floor in domestic activity and boost confidence in a recovery. While there are counteracting forces at a global level, we are also more constructive on the resource sector given appealing valuations and potential upside in commodity prices. We think the reporting season will confirm that the domestic backdrop has held in despite inflation, interest rate and economic growth concerns. Looking ahead, the backdrop requires a flexible and pragmatic approach but we are optimistic that solid earnings, rate cuts and diminishing global risks are catalysts for further market upside.
