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Investing.com-- Macquarie analysts have adopted a more constructive stance on Australian equities, citing global easing and strong cyclical momentum as key drivers for growth into 2026, according to a research note.
Despite acknowledging they were "late" to the bullish call, Macquarie analysts argued that the breadth of global rate cuts and improving economic data justify higher growth expectations. They highlighted parallels to the 1998-99 period, when liquidity and technology booms fueled market gains.
Macquarie upgraded its portfolio exposure to tech and AI-related stocks, adding Nextdc Ltd (ASX:NXT), Seek (ASX:SEK), and Paladin Energy Ltd (ASX:PDN), while reducing bond proxies like GPT Group (ASX:GPT) and Transurban Group (ASX:TCL).
The firm also introduced small-cap picks Lovisa Holdings (ASX:LOV) and Webjet (ASX:WJL).
The note introduced " Macro (BCBA:BMAm) Velocity," a new indicator combining global rate cuts and economic momentum, which it says explains recent price-to-earnings (PE) expansion, even for banks.
"Markets are never wrong, only opinions are," analysts wrote, quoting Jesse Livermore.
While cautioning that global easing may peak soon, Macquarie expects earnings upgrades in fiscal 2026, driven by stronger business conditions and consumer spending.
The S&P/ASX 300’s forward PE remains elevated, but the brokerage sees further upside if macro momentum holds.