The Australian equity market has seen a downward shift in earnings expectations over the past three months, signalling that the market is moving firmly into a downgrade cycle. In the near term, earnings revisions will be an increasingly important driver of relative company performance, in our view.

The retail sector has witnessed a sell-off in response to soft trading updates and the prospect of further interest rate hikes, with the rising cost of rent and the sharp increase in the minimum wage further impacting the industry. Retail stocks may appear cheap, considering the recent sell-off. However, a critical consideration is the reliability of earnings reflected in price-to-earnings (PE) ratios.

Gaming revenues have shown resilience over time, as the industry tends to be relatively unaffected by economic downturns. Gaming stocks offer the Focus Portfolio resilient growth in a part of the cycle where we believe this is key to outperformance. In this report, we outline our viewpoint on gaming, and detail our key holdings in the sector.

While copper has weakened recently due to global economic concerns, long-term we are structurally bullish when it comes to the copper price. Demand for copper is currently subject to a degree of cyclicality, given its wide range of industrial uses which ebb and flow with the state of the broader economy. Longer term, significant structural growth in demand for copper as significant quantities will be needed for the energy transition.

Our outlook on the banks has been cautious for some time now, and we have seen more evidence to support our view over the past week. 3 of the 4 big banks have reported half year results, which all share the same common theme: NIMs have peaked.

After a decade of industry headwinds, we think the tide has turned for Telstra (TLS) as the telecommunications industry outlook is becoming increasingly attractive. In this report, we detail why we think Telstra will demonstrate resilient earnings over the medium-term and analyse the significant ‘hidden value’ within its infrastructure assets.

Price-to-earnings (PE) multiples can be a useful tool when it comes to getting a snapshot of a stock’s valuation, though it is unwise to rely on this metric completely. In this report, we explain why we believe high growth stocks, even on high PEs, can offer investors above-market returns.

The past 12 months have been a tough period for housing-exposed stocks. Monetary tightening has adversely impacted the housing market (in the US and domestically), with higher mortgage rates ultimately translating to softer house prices and a decline in new housing construction volumes. While our base case is not for a GFC-style housing crisis, sentiment is very low. So, why invest?