Forget Nvidia: Here’s how one CIO is positioning after the rate cut
The U.S. Federal Reserve’s bumper 50-basis-point interest rate cut has been the talk of the market as investors evaluate sectors and stocks. Kingsley Jones, a chief investment officer at the Sydney-headquartered Jevons Global, says the rate cut has “supported the market.” “At this point, there was some concern if the Fed went with a jumbo that the market might panic a bit and say the Fed knows something we don’t. But look, it was well telegraphed in the market and I think it met expectations,” he added. Bullish on defensives Against this backdrop, Jones, who is also the founder of Jevons Global, is steering clear of the hotly watched tech sector and focusing on defensives. “Tech has had a terrific 10 years, including the latest AI boom. We think the earnings momentum is clearly slowing there,” he explained. Big Tech plays like chipmaker Nvidia has had “smaller and smaller beats on estimates,” Jones noted. “I think that momentum is fading. But let’s face it, US investors have made a lot of money and global investors in those tech stocks, so we think people will increasingly be trimming those positions to other stocks.” Speaking to CNBC’s ” Street Signs Asia ” on Sept. 24, the investment expert noted a “clear sector rotation beginning to happen now,” with sectors like utilities and health care coming into favor. These sectors have been gaining traction amid attractive valuations relative to tech and falling interest rates, Jones said. Among the stocks he likes is health insurer UnitedHealth , given the large expenditure on health care in the United States, relative to its gross domestic product. Jones sees the company benefiting from “an absence of controls on costs within the system.” The CIO is also watching the pharmaceuticals space, and named biotech player AbbVie Inc as a stock he likes. Elsewhere, Jones is bullish on consumer plays like supermarket chains Walmart and Costco , which he considers “good picks in a falling interest rate environment.” Tech play There is one tech company he likes, though. That is computer technology giant Oracle , though it’s been “playing catchup (and) wasn’t everyone’s favorite for a long time.” The company recently raised its fiscal 2026 revenue forecast to at least $66 billion, more than the $64.5 billion LSEG analysts were expecting. Jones is adding to his position in the stock since it has been a “major beneficiary of artificial intelligence” such as through cloud infrastructure. Avoid semiconductor equipment Jones is avoiding sectors like semiconductor equipment that companies have been spending more on, following interest in building AI infrastructure and chip factories. He warned of the impact that U.S. sanctions might have on semiconductor equipment plays. “So every time there’s a new bunch of sanctions, China just pulls forward a lot of expenditure to get around it … And we think that (semiconductor equipment players are) running out of steam,” Jones said. “So, I’d avoid the semi equipment sector trade out of that,” he added.
