Tech Sector

The ASX tech stocks have demonstrated their need for a strong bond market to keep stretching valuations on the upside, a few of which were already rich. Overall, we welcome this pullback to increase our exposure to the rate-sensitive sector, but we are conscious that volatility is likely to increase on the stock level. On the macro front, we will be looking for catalysts/triggers that bonds are basing on, and stocks have priced in the diminished chances of interest rate cuts before Christmas.

• The local tech stocks still look capable of making fresh highs through 2024/5 once bonds stabilise and ideally start to recover.

As subscribers know, MM is holding elevated cash positions and looking for buying opportunities; hence, we’ve focused on stocks that could find themselves in our respective portfolios over the coming weeks/months.