Diana Mousina

Brokerages raising their target price on Nvidia shares this month have pushed the median view to US$500, and analysts say that may be conservative. After an impressive earnings report, hedge funds and others are piling into the chip maker even as high bond yields threaten tech stocks.

Recently released wages data increases the likelihood the RBA will pause its rate hiking campaign for the near term, economists say. A soft landing for the economy is far from guaranteed, but the runway is getting clearer.

Corporate profit growth is expected to moderate, especially in sectors focused on consumer sales, and mining companies have seen large downgrades. Meanwhile, markets are still not fully pricing in the high risk of recession, some analysts say.

As the economy tilts toward recession, portfolio analysts are turning towards sectors and companies that handle cloudy conditions better than most. Healthcare, energy, consumer staples and utilities come into focus, while cyclical sector companies lose favour.

True to form, US stocks are outperforming Aussie shares on the back of a resurgence in technology-related company valuations. Economists warn against straying from diversification, however, with Aussie miners still offering investors capital returns on top of an underlying hedge against a US downturn.

AMP recently promoted senior economist Diana Mousina to a new role, deputy chief economist, in recognition of her achievements and succession path. Like other economists, Mousina sees a recession on the cards for Australia, although the timeline may be longer than many hope.

Despite increased volatility emanating from the banking sector, tech stocks have been supported by falling bond yields on fears the global economy could slip into recession this year, with big-name companies leading the gains.

Household wealth in September recorded its third largest quarterly decline since the Australian Bureau of Statistics began keeping records in 1989. And wealth is likely to keep falling in the coming quarters, as the lagged effects of interest rate hikes flow through.

Experts forecast a more balanced budget with an even-handed dispersion of revenue and spending measures. Income tax cuts will likely go ahead, while super should get a break from further tinkering.