Equity markets have had a phenomenal rebound since April 9th. It has left many scratching their heads given macroeconomic and earnings fundamentals have unquestionably weakened. We think alot of the rebound is the result of removing the “bear” case out of the consensus narrative and adding in the potential for policy rate cuts. We know the macro backdrop is set to slow but we think investors should stare down near term risks on the basis that policy support will be available if required and that while slowing, the global economy is still growing. Domestically, Australia remains well insulated from the global trade war and stands to benefit as the RBA ramps up policy support. We pivoted as the rally took hold and we are prepared to stick with it.
