Did the RBA just kill ASX growth? WAM's Matt Haupt on the winners and losers

It wasn't meant to happen like this. 

A few weeks ago when ABS employment data showed a jump to 4.5% unemployment, the chances of a Melbourne Cup day interest rate cut were 81%. In betting terms, that's getting close to a sure thing.

Then came last week's shock inflation data, which showed underlying inflation had risen for the first time since 2022 to 3%. It killed any chance of a November rate cut or really any chance of a rate cut anytime soon. There was even talk of a potential rate rise if things get worse from here. 

More importantly, the RBA now forecasts that inflation won't be back within its target band of 2-3% until 2027. That puts a big question mark over the Australian economy, even if we see the continuation of a global growth cycle. 

But what's the picture for the Australian stock market? Which sectors and stocks could be hit by the handbrake being pulled on rate cuts? And which could benefit from global growth continuing in 2026?

To answer those questions, I spoke to Matthew Haupt, lead portfolio manager at Wilson Asset Management.

While money markets and the wider public might have been shocked by the turnaround in the RBA's outlook on rate cuts, Haupt says WAM's outlook was that rate cuts had already gone too far.

More specifically, it's the global growth story, not local inflation, that could have the biggest impact on Australian stocks. 

"It's more of what happens on the global stage next year, whether the global economy picks up or if we go down the path of slower growth and further rate cuts."

The question remains, but WAM are leaning towards cyclical global growth.

The stocks and sectors to benefit

Haupt sees a few key beneficiaries if global growth does pick up as WAM expects. Commodities and energy names would likely be winners in any China-led growth.

"Commodity names, in particular, aluminium and copper and iron ore, should be fairly solid," he says. 

He puts forward some of the obvious names: diversified miners like BHP, Rio Tinto and Fortescue, as well as coal heavy-hitters like Whitehaven and Woodside Energy. 

If US housing also picks up as expected, he also sees potential in James Hardie and Reliance.

Cyclical value stocks are the other sector to keep an eye on, says Haupt. "It's a little bit early for these guys, but it's those value stocks which are being left behind. Next year, I think they'll look really interesting if we do go up for a cyclical uptick in global growth."

The stocks and sectors to avoid

While he sees the global growth story as more pertinent to the outlook for many Australian equities, Haupt says the RBA's recent decision and pivot will still impact some areas of the local market.