The U.S. Federal Reserve’s massive 50 basis point (bp) interest rate cut has been the talk of the market as investors evaluate sectors and stocks. Kingsley Jones, chief investment officer at Sydney-based Jevons Global, said the rate cut had “supported the market”. “At this point, there was some concern that if the Fed introduced jumbo policy, the market might panic a little bit and say the Fed knows something we don’t know. But look, I think it communicated well to the market and met expectations,” he added. Bullish on the defensive Against this backdrop, Jones, who is also the founder of Jevons Global, is avoiding the hot tech sector and focusing on the defensive. “The technology industry has had a great decade, including the recent AI boom, where we think revenue momentum is clearly slowing,” he explained. Jones noted that big tech companies like chipmaker Nvidia are seeing “more and more downside estimates.” “I think that momentum is slowing down. But let’s face it, U.S. investors and investors around the world have made a lot of money in these tech stocks. That’s why people are replacing their positions with other stocks. The investment expert said on CNBC’s “Street Signs Asia” on September 24 that sectors such as utilities and healthcare are favored, adding: “There is a clear sector rotation. is starting to happen now.” Jones said these sectors are gaining momentum amid attractive valuations and lower interest rates relative to tech. One of his favorite stocks is health insurance company UnitedHealth, given the large amount of spending on health care relative to the U.S. gross domestic product. Jones believes the company benefits from “the inability to control costs within the system.” The CIO also has an eye on the pharmaceutical sector, citing biotech company AbbVie as his favorite stock. Elsewhere, Jones is bullish on consumer-facing strategies such as supermarket chains Walmart and Costco, which he believes are “good options in a declining interest rate environment.” Playing around with technology But there is one technology company he loves. It’s the computer technology giant Oracle, which “continues to play catch-up and hasn’t been to everyone’s liking for a long time.” The company recently raised its fiscal 2026 revenue forecast to at least $66 billion, higher than the $64.5 billion expected by LSEG analysts. Mr. Jones has increased his position in the stock as the company has become a “key beneficiary of artificial intelligence,” including through cloud infrastructure. Avoid Semiconductor Equipment Jones is avoiding areas such as semiconductor equipment, where companies are increasing spending due to increased interest in building AI infrastructure and chip factories. He warned of the impact of US sanctions on the semiconductor manufacturing equipment business. “So every time new sanctions are imposed, China just brings forward significant spending to get around them…and we think (semiconductor equipment manufacturers) are running out of steam.” said Jones. “Therefore, I would avoid trading in the semi-equipment sector among them,” he added.
Here’s what one CIO thinks about the position after the rate cut
By NvidiaDaily
