Interest rates likely to support housing longer term
Interest rates likely to support housing longer term. On sectors and stocks to watch this reporting season, Chris Stott, CIO at Wilson Asset Management says; We continue to believe that companies that are tied into the housing sector have scope to outperform. Many of these companies have experienced large re ratings in the last 12-18 months. We think this housing cycle will be longer than previous given the scope for interest rates to remain at record lows for the next 2-3 years. Further interest rate cuts cannot be discounted. The IT services sector is one we are currently cautious on in Australia. In parts, this sector is undergoing a structural change which will dampen the outlook for earnings growth in the medium term. Economic growth remains sluggish which is not conducive for these companies to outperform in our view.