This week we share our second quarter outlook for companies within the Wilsons Advisory Australian Equity Focus List. We look back on Q1 and share our current positioning for the quarter ahead.

Following a record year in 2021, we recast our M&A screen looking at the M&A landscape for 2022 and the S&P/ASX 100 companies that could look financially attractive to an acquirer.

This year the risk-off environment for equities has hit small-cap equities harder than large caps. Global risk-off has been driven by twin threats of higher global interest rates compounded by the outbreak of conflict in Russia/Ukraine. But In our view, an opportunity is emerging in small caps particularly if concerns around interest rates and Russia/Ukraine were to ease.

We reiterate our positive stance on Aristocrat (ALL), James Hardie (JHX), and SEEK (SEK). In our view, all three companies provide long-term structural growth qualities which are presently being discounted by the market.

This week we share six charts we are watching right now on the Australian equity market. The outlook for the Australian equity market in isolation remains quite encouraging, despite the current geopolitical tensions. Year to date, the Australian market is down -5% vs MSCI World index in A$ which has fallen -10%.

Australian companies have delivered a reasonable reporting season against a highly uncertain operating backdrop. We look at what’s driving this performance and share the changes we’ve made to the Wilsons Advisory Australian Equity Focus List against this backdrop.

The higher inflation narrative caught up with global markets in January this year. We look at some of the ways investors can position for the prospect of higher inflation (and interest rates) and examine some of the inflation beneficiaries.

Following results updates from all four major banks this month, we outline our case for why investors should be market weight the major banks and share the three core issues we believe investors will focus on over the next 6-12 months.