| Top Stories |
| On Monday, 27 April, the ASX dropped 20 points to finish at 8766, 182 points below the last Not So. The US extended the ceasefire in the US/Iran conflict/war, but the Strait of Hormuz remains shut, which saw the oil price move above $100 per barrel. This normally would see markets sell off, and we have seen some weakness this week in Australia, with more price downgrades than upgrades. However, this is not the case on the US markets, as the NASDAQ is up 15% for April. Intel announced better-than-expected quarterly profit, jumping a staggering 24%. This saw NVIDIA increase by 4.3%, up 25% in April, and valued at over US$5 trillion (the largest company in the world). To put this in context, this is twice the value of all the companies in the ASX200. One reason we aren’t seeing the sell-off that might have been expected is that the world is actually less reliant on oil. Since 1970, oil use has increased by 90%, the world population has increased by 120%, and the global GDP has increased by over 300% (after adjusting for inflation. While we wait for the Straits of Hormuz to open as President Trump seems to be looking for an exit door. This week we will see a raft of economic events, including profit results from some of the Magnificent Seven – Alphabet (Google), Amazon, Meta and Microsoft – Thursday morning (Aussie time) and Apple – Friday morning (Aussie time) We expect market volatility to persist until a resolution is reached. We are still cautious but not fearful. Stories below: Market views – Morgan Stanley & Shane Oliver Market indicators FY26 NextDC capital raise and contract win Spheria Emerging Companies (SEC) moving to monthly dividends We are happy for you to share our Not So Daily Bulletin with family and friends. If we can help them, we are also happy to chat. |
| Market Views Morgan Stanley updated their asset allocation The S&P 500 has rebounded strongly since the announcement of US-Iran peace negotiations and is hovering around all time highs again. Sector returns since the March low also have a distinctly risk-on ‘flavour’, with Technology, Communication Services, and Consumer Discretionary leading. • US macroeconomic fundamentals remain sturdy. However, the current oil supply disruption from the Middle East presents a timing challenge for the Federal Reserve (Fed). This is expected to delay rate cuts rather than prompt rate hikes, as the Fed navigates temporary inflation pressures alongside growth and labour market considerations within its dual mandate. • In Australia, stagflation is the key tail risk, with Australia exposed to both price and volume impacts from energy shocks. Prolonged supply disruptions could exacerbate inflation and growth challenges, limiting Reserve Bank of Australia (RBA) responses. • We do not envisage a ‘straight-line’ equity market move higher as Middle East-related concerns flow through to economic data. However, the current picture supports remaining constructive on equities on a 12-month basis, and Cyclicals in particular, where revisions remain intact. Treasuries have shown limited value in 2026 amid an energy shock, but prospects may improve once the Strait of Hormuz reopens. ASX 200 12-month target of 9250. AMP’s Shane Oliver updated his market view Global and Australian share markets have likely seen the worst from the War and oil shock if the flow of oil quickly resumes but the risk of further falls taking us to a 15% top to bottom correction remains high given uncertainty around the peace talks and flow of ships through the Strait along with still stretched valuations, political uncertainty associated with Trump & the midterm elections and increasing worries about private credit and the impact of AI. However, returns should still be positive for the year as a whole, thanks to Fed rate cuts likely later in the year, Trump still likely to pivot to consumer-friendly policies ahead of the midterms and solid profit growth. Bonds are likely to provide returns around running yield. Unlisted commercial property returns are likely to be solid helped by strong demand for industrial property associated with data centres. Australian home price growth is likely to slow to around 3-5% due to poor affordability, RBA rate hikes and the hit to confidence from higher fuel prices and the War. Cash and bank deposits are expected to provide returns around 4.25%. The $A is likely to rise as the interest rate differential in favour of Australia widens as the Fed cuts and the RBA hikes. Fair value for the $A is around $US0.72. |
| Market indicators FY26 Each year, we track a range of information shown in the chart below. This is for the current financial year (FY26) The ASX200 is represented by (pink) and uses the left-hand scale. The ASX is up 2.87% for the financial year, which has been driven by the resources sector, RIO up 60%, BHP up 52% & S32 up 48%, but is seeing broader headwinds from a slowing economy, rising energy prices, increasing inflation and interest rates as the RBA is expected to raise again in May. The ASX200 recovered from the sell-off in March (Iran), but has struggled to break through 9000, as oil-related effects are expected to seep into the economy in the coming months. The Banking Index (blue) using the right-hand scale has been trading well above 100% for the last 18 months. At 110%, this shows that the brokers’ target prices for the banks are 10% lower than the banks’ actual share prices. We are starting to see banks pull back on bad and doubtful debts as a consequence of the issues above (energy, economy, inflation & interest rates). The Core Watchlist (represented by 30 ASX stocks), brown using the right-hand scale, is currently below 90%. This has historically been a good buy indicator, as it shows that stocks are trading at a reasonable discount and that the market tends to bounce higher. At 88%, it suggests the stocks have a 12% upside over the next 12 months. However, we are seeing broker downgrades exceed upgrades for the year, which is unusual, as in the past years we have seen more upgrades. Therefore we are a little cautious given the risks for further downgrades, especially if we have a tough budget and interest rate rises. |
 NextDC (NXT) – capital raise and contract winData centre provider NXT announced a $1.5bn equity raising, expanded hybrid issuance to $1.7bn and 250 MW contract win from a global hyperscaler. While the company wasn’t named, the size suggests it’s limited to either Amazon, Google, Microsoft, Meta, or Oracle. Co-pilot said this is the largest win for one site in Australia and effectively doubles NXT contracted utilisation, which currently stands at 245MW. Citi said it feels these transactions highlight strong demand and the company’s ability to secure large hyperscale deals. The capital raise is seen as removing a funding overhang by bringing forward funding requirements. Pricing for the new contract is also stronger than the broker initially expected. UBS highlights NextDC’s strong contract momentum, with a record 250MW increase at S4 lifting total contracted utilisation to 667MW, while the forward order book has risen 83% to 544MW. NXT announced a capital raising of ~$1.5b by way of a fully underwritten 1 for 5.4 prorata accelerated non-renounceable entitlement offer of new fully paid ordinary shares in NextDC. Entitlement offer priced at $12.70/share, a 17.7% discount to Friday’s closing price of $14.95 as the stock jumped after it restarted trading on Thursday. Offer closes 11 May. NXT has been one of the cheapest in the CORE Watchlist over the last few months. It will be interesting to see the market’s response once trading resumes. It’s still trading at 73.6% of target price $20.33 Super changes for FY2027 The main changes for FY27 were announced this week. Concessional contribution will increase from $30k to $32.5k Non Concessional contributions will increase from $120k to $130k Total Balance Cap (total allowed in pension phase) increased from $2m to $2.1m Financial Planning Snippets – update PLEASE BE VIGILANT regarding financial scamming. If anyone is requesting financial information from you (via phone, email, text, or social media), please contact us first or ask them for their ABN. Super Guarantee (SGC) for employees increases to 12% from 1/7/25. Concessional super contributions maximum of $30k Commonwealth Seniors Health Care card has seen the income limit increase to $158,440 (couple) $99,025 (single). If you are of Age Pension age and don’t have the card, please let us know. Macquarie Cash accounts – IF CHANGING YOUR PHONE, YOU NEED TO DEACTIVATE AUTHENTICATOR AND SWITCH TO THE NEW PHONE New AGED CARE fees come into effect from 1/11/25. Only for those entering care after this date. |
| Other Stories Chinese industrial profits up 15% |
| Broker Target Price changes Target Prices should be viewed as a compass (the general direction) rather than a GPS destination. Ord Minnett CSL decreased from $198 to $186 Goodman Group (GMG) decreased from $29.15 (lowest broker) to $29 (still lowest broker) JB Hi Fi (JBH) decreased from $97 to $90 Lend Lease (LLC) increased from $4.50 to $4.60 NextDC (NXT) increased from $20.50 to $21.50 Wesfarmers (WES) decreased from $80 to $69 Morgans Amcor (AMC) decreased from $75.80 to $68.20 Aristocrat Leisure (ALL) decreased from $74 to $63 (equal lowest broker) ANZ decreased from $32.65 (lowest broker)to $30.72 (still lowest broker) Brambles (BXB) decreased from $27 to $25.50 NXT decreased from $20.50 to $18 (lowest broker) Seek.com (SEK) decreased from $27.50 (highest broker) to $25.10 (still highest broker) Morgan Stanley ALL decreased from $66.90 to $65 NXT decreased from $19 to $18 Macquarie Rio Tinto (RIO) increased from $183 (highest broker) to $186 (still highest broker) Bell Potter/Citigroup NXT decreased from $19 to $18.60 SEK decreased from $26 to $24.15 UBS SEK decreased from $24.30 to $18.20 Santos (STO) increased from $8.70 to $8.80 (highest broker) Tracking changes for 2026 Upgrades 179 Downgrades 181 |
| Core Watchlist Index (changes since last Not So) The CORE Watchlist is a collection of 30 Australian shares, predominantly “Blue Chip”. We obtain research from up to 6 brokers on each share. Each broker provides a Target Price (value in 12 months) which then provides us with an average for each stock. We then compare that average to the current price as a percentage. IE Macquarie price $176.95 Av. Target Price $205.96= 85.9% (meaning 14.1% upside over next 12 months) + income 4.35% (including franking). To get the CORE Index we take the average across the 30 stocks. This provides us with a market average as there are up to 80 teams of analysts providing the research and target prices. The CORE Watchlist stocks represent more than 55% of the ASX 200 and so provide us with a good indicator of the market value. When it’s at 100% then the market is fully priced. We have seen that when the index is below 90%, then it’s good buying, but that doesn’t happen very often. Should you have any questions, please let me know. The Core index decreased from 89.39% to 88.8% (still not above 90%).If we removed the 4 banks, the index falls to 85.13%. Overall Earnings Per Share (EPS) FY26 decreased from 13.75% to 13.37% FY27 decreased from 7.77% to 7.71% Most expensive – CBA 137.5% (176.5% highest ever). Least expensive – CSL 63.8% The CORE Watchlist remains very mixed. It has 8 (9) stocks trading above 100%; they are; ANZ BHP CBA RIO TLS WBC WDS WOW lowest number ever is 0, highest is 15. While 13 (12) is trading below 85% (the highest is 18, and the lowest is one). ALL AMC BXB CSL LLC NEC NXT ORA ORI RMD S32 SEK SHL (Figures in brackets are last Not So). STOCKS TRADING BELOW ALL BROKER FORECASTS ARE AS FOLLOWS; (it has been a handy indicator in the past). 14 out of the 30 CORE stocks are trading below the lowest broker target price. Highest 24. Lowest is 2. ALL current price $47.90 Broker range $63 to $74 AMC current price $54.91 Broker range $66 to $91.25 BXB current price $22.02 Broker range $23.35 to $28.10 CPU current price $30.05 Broker range 32.40 to $39.30 CSL current price $130.00 Broker range $176 to $235.00 LLC current price $3.40 Broker range $3.89 to $6.30 NXT current price $14.95 Broker range $18 to $22.55 NEC current price $0.99 Broker range $1.20 to $1.41 ORA current price $1.43 Broker range $1.70 to $2.50 ORI current price $21.22 Broker range $25.00 to $30 RMD current price $30.89 Broker range $41.20 to $50 S32 current price $4.32 Broker range $5 to $5.80 SEK current price $14.66 Broker range $18.20 to $25.10 SHL current price $20.33 Broker range $21 to $28.64 Added BXB Removed |
| Banking Index (changes since last Not So) Like the CORE Watchlist index, the Banking index is the four major banks’ average target price based on research from up to 6 brokers. The percentage below 100% is the potential upside over the next 12 months (not including income). If at or over 100%, then this indicates the Banks are fully priced. The banking index decreased from 115.4% to 112.5%. NAB cheapest at 99.1% ANZ 102.8% WBC 110.7% and CBA at 137.3% |
| Other Indicators (changes since last Not So) US VIX (Fear) Index increased from 17.84 to 18.87. Normal is 10-17. Above normal but down after the ceasefire. Iron Ore increased from $106.25 to $106.80. Copper increased from $6.01 to $6.03. It reached an all-time high of $6.11 on 6/1/26. Gold decreased from $4803 to $4725. New ATH $5589.38 28/1/26. Gold not acting like the “fear safe haven of the past”. Silver decreased from $78.92 to $75.69 AUD/USD decreased from 71.62c to 71.51c. Asian markets – MIXED US 10-year Bonds increased from 4.25% to 4.31%. 2-year rate 3.79%. 30 year rate below 5% at 4.91%. German 10 year Bonds increased from 2.98% to 2.99% Japanese 10 year Bonds increased from 2.38% to 2.44%. Highest since July 2007 30-year Bond hit an ATH of 3.66% Aussie Bonds 10 year Bonds increased from 4.98% to 4.99%. 2026 high 5.1%. Oil prices, Brent, decreased from $94.57 to $105.33. Cease fire extended but no talks & strait of hormuz is shut Tungsten China decreased from $2293mtu to $2226 mtu. European price increased from $2800mtu-$3289mtu to $2800 to $3320mtu (only changes once a week). A year ago the price was $335mtu. |
| Top Stories |
| On Thursday, 2 April, the ASX dropped 92 points to finish the lead into the Easter break at 8580. This is after the 190-point gain on April Fools’ Day, as hope of a TACO event (Trump Always Chickens Out) turned into a FAKE TACO and more like a NACHO, see below. Over the weekend, Iran took down some US planes, which suggests that this isn’t as one-sided as the US President has suggested. Markets have been taking Trump at his word as they look for an end to conflict and a return to more normal times. That could be wishful thinking, as Goldman Sachs said the traders have turned short. The last time they were this short was around the Liberation Day tariffs, but when they covered the shorts, the market snapped back quickly. Markets are hoping for TACO and the end to the conflict/war in the next 2 weeks. If it drags on longer then market could go lower. We are still cautious but not fearful. Tiungsten remains our contrarian play. Stories below: Global markets this week and the outlook. What to watch for in April? Global Market review – March CORE and ETF review March Capital Expenditure still growing More Energy upgrades We are happy for you to share our Not So Daily Bulletin with family and friends. If we can help them, we are also happy to chat. |
| Global markets this week and the outlook AMP provided an update: Financial markets were taken on a roller coaster ride this week as we started and ended the week with promises of TACOs (Trump Always Chickens Out), though it turned out that we were fed NACHOs instead (Not Actually Changing Hormuz Opening)! The previous extension of the deadline to attack Iranian energy assets to April 6th did little to calm markets heading into Monday, as the Houthis became involved in the conflict and Hormuz remained effectively shut. However, optimism has since grown as President Trump indicated he might withdraw even if the Strait stayed closed, while Iran’s President also showed willingness for a ceasefire. Hopes for an end to the war reached a fever pitch by Thursday with the S&P 500 recovering all of its losses since March 26th. Trump’s much-anticipated national primetime address disappointed as it contained nothing new. Core US goals are “nearing completion”, the US will hit Iran’s electric plans if there is no deal, and in fact the speech skewed to higher escalation risks as Trump threatened to hit Iran “extremely hard” over the next 2-3 weeks. Share gains moderated into the end of the week and the US is up 1.6% since last week, EuroStoxx 50 up 2.3%. Aussie shares rose 0.7% this week and are down by 6.7% from before the war and Japanese shares still down more than 10% from February. Outlook Global and Australian share markets are at high risk of further falls in the near term in response to the War with Iran against the backdrop of stretched valuations, political uncertainty associated with Trump & the midterm elections, increasing worries about private credit and AI & tech valuation worries. We continue to see a 15% or so top-to-bottom fall in share markets along the way this year, but the risk is that it could go deeper the longer the Strait of Hormuz remains effectively closed. However, returns should still be positive for the year as a whole thanks to Fed rate cuts likely later in the year, Trump still likely to pivot to consumer friendly policies ahead of the midterms and solid profit growth. Bonds are likely to provide returns around running yield. Unlisted commercial property returns are likely to be solid helped by strong demand for industrial property associated with data centres. Australian home price growth is likely to slow to 5% or less due to poor affordability and the RBA raising rates with talk of more to come. Cash and bank deposits are expected to provide returns around 4.3%. The $A is likely to rise as the interest rate differential in favour of Australia widens as the Fed cuts and the RBA hikes. Fair value for the $A is around $US0.72. |
| What to Watch for in April – Guidance Counselling Required: Morgan Stanley thinks the tightening in monetary policy expectations, combined with the energy price shock and rising supply disruption risk, suggests earnings forecasts are now stale. Management commentary over the coming reporting season will be critical in quantifying first order impacts, particularly for domestically exposed sectors already feeling the effects of higher RBA rates. Key risks centre on fuel cost pass through, demand sensitivity, and attempts at broader price recovery – an approach that sits uncomfortably with the current RBA framework. As a result, the market’s double digit earnings profile is likely to come under pressure, with downside risk skewed to FY27e. Until supply side uncertainty clears, index upside appears capped. |
| Global Market review – March Global markets sold off sharply as the US and Israel attacked Iran and the Iranians shut the Straits of Hormuz for the first time, blocking up to 20% of the world’s oil supply. No market was spared, but Asian and European markets saw bigger drops, as the oil impact will be felt more by those economies than by the US. This is partly why they have declined to help. The AUD also fell 3%, providing some relief for offshore investments. The ASX 200 fell 7% amid concerns about oil supply and rising interest rates, dampening optimism. Over the last six months, markets have all been positive, with Japan up 37%. The ASX 200 is the lowest at just 2.5% as market pricing is fully valued. Over the last year, market results have been very healthy as the dip from Liberation tariffs was short-lived, and the rest of the world agreed to trade with each other and became less reliant on the US. Japan was again the best, up 58%, as the new PM (the first female) began implementing a pro-growth agenda after decades of austerity. The longer timeframes are still dominated by the US Nasdaq, as technology has remained the main driver. It’s taken a short-term break, but it’s likely to return in the coming months as AI is a structural change, not a cyclical one. |
 Core and ETF Monthly Review As always, performances were mixed throughout the month. The ASX fell 7.79% and MSCI (World) was down 6.19%. CORE Watchlist 30 ASX-listed stocks from our CORE Watchlist. The best performers for the month were the energy stocks with Woodside (WDS) up 23.8% on the oil/gas crisis. Santos (STO) gained 17.8% for the same reasons. Coles (COL) was a distant 3rd, gaining 6.8%, as it’s seen as a defensive stock (everybody buys food). The worst performers for the month were Lend Lease (LLC), down 21.7%, as investors are still waiting for restructuring outcomes. NextDC (NXT) down 18.4% on question marks about data centres and Orica (ORI) down 17.8% on chemical supply issues from the Middle East Over the calendar year (3 months), the best performers were WDS up 50.6%, STO up 30.5% and WOW up 23.9% (similar to COLES) seen as being a defensive stock. The worst over the calendar year Seek.com (SEK) down 40.7% as the market questions the sustainability of software. Lend Lease (LLC) down 34% and JB Hi-Fi (JBH) down 25% on profit taking and prospects of slowing consumer spending. Over the financial year (9 months), The best performers were Rio Tinto (RIO) up 50.7% on stronger commodity prices, WDS up 48.3% and South 32 (S32), up 46.7% on stronger commodity prices. The worst performers were SEK down 42%, CSL, down 41.2% on continued questions on the future strategy and weaknesses in healthcare and LLC down 38%. EXCHANGE-TRADED FUNDS (ETF) As part of our research, we cover approximately 80 ETFs. The best and worst performers for the period(s) were as follows. The best performers for the month are Global Cloud Computing (CLDD) up 5.6% after being sold off due to software fears. Global Clean Energy (CLNE) up 1.4% on renewable demand and Global Cybersecurity (HACK) up 0.9%, same reasons as CLDD. The worst three for the month were Korea (IKO), down 22%, as it has been the best performer over the last year, seeing profit taking. Global Robotics & AI (RBTZ) down 15% on technology profit taking but also index changes that saw the ETF widen to include humanoid technology. Emerging markets (EMKT) down 12% on profit taking and concerns about oil supply impacts. Over the calendar year (3 months), The best performers were IKO up 14.5%, CLNE up 10% & Global Infrastructure (IFRA) up 7%, defensive investments that provide a good steady income with a large capex rollout as technology is being integrated into infrastructure globally. The worst, over the calendar year. Australian Small Company (SEC), down 18% on profit taking, has bounced 10% early in April. CLDD down 17.8% & HACK down 17.6%. Over the financial year (nine months) The best performers were Global Battery (ACDC) up 60% as demand for electric battery technology jumped globally. Korea (IKO) up 54.3%, CLNE 42.2% The worst three were the same three as last month. Global Cybersecurity (HACK), down 24.6%; Global Cloud Computing (CLDD), down 21.4%; and Australian Property (VAP), down 17%, due to rising interest rates.  Capital expenditure growing (CAPEX) Morgan Stanley sees six micro drivers combine into a sizable pulse after prior underinvestment: Energy Transition Data Centres Resources Housing Defense Olympics. • We expect these combined drivers will grow from A$225bn in FY25 to A$326bn in FY30 – an annual rate of 7.7%Y and a rising share of the economy. • The categories drivers are more structural than cyclical: they are policy led and capacity constrained. As such we see this as a multi-year pipeline of spending. • The ongoing oil price shock will result in near-term disruption, but arguably strengthens the medium-term justification for this spend.  Energy upgrades Macquarie revises forecast earnings for Oil & Gas exposures under coverage to reflect higher oil and LNG prices, aligning with the forward curve and a long-term Brent Oil assumption of US$70/bbl. The Middle East outlook is seen as highly unpredictable, with a meaningful probability of further oil price rallies, while LNG repairs and restarts in Qatar are expected to take time. Woodside Energy’s (WDS) earnings forecasts have been materially upgraded, with 2026-2028 EPS increasing by 61%, 102% and 56%, respectively. Super changes for FY2027 The main changes for FY27 were announced this week. Concessional contribution will increase from $30k to $32.5k Non Concessional contributions will increase from $120k to $130k Total Balance Cap (total allowed in pension phase) increased from $2m to $2.1m Financial Planning Snippets – update PLEASE BE VIGILANT regarding financial scamming. If anyone is requesting financial information from you (via phone, email, text, or social media), please contact us first or ask them for their ABN. Super Guarantee (SGC) for employees increases to 12% from 1/7/25. Concessional super contributions maximum of $30k Commonwealth Seniors Health Care card has seen the income limit increase to $158,440 (couple) $99,025 (single). If you are of Age Pension age and don’t have the card, please let us know. Macquarie Cash accounts – IF CHANGING YOUR PHONE, YOU NEED TO DEACTIVATE AUTHENTICATOR AND SWITCH TO THE NEW PHONE New AGED CARE fees come into effect from 1/11/25. Only for those entering care after this date. |
| Broker Target Price changes Target Prices should be viewed as a compass (the general direction) rather than a GPS destination. Ord Minnett Woodside (WDS) increased from $24.75 to $25.75 Morgans Morgan Stanley Macquarie BHP decreased from $52 to $49 Brambles (BXB) decreased from $24.70 to $23.35 Nine Entertainment (NEC) decreased from $1.20 to $1.15 Rio Tinto (RIO) increased from $155 to $168 Santos (STO) increased from $8.10 to $8.75 South 32 (S32) increased from $5 to $5.60 (highest broker) WDS increased from $30 to $35 (highest broker) Bell Potter/Citigroup S32 increased from $5 to $5.40 UBS Tracking changes for 2026 Upgrades 146 Downgrades 131 |
| Core Watchlist Index (changes since last Not So) The CORE Watchlist is a collection of 30 Australian shares, predominantly “Blue Chip”. We obtain research from up to 6 brokers on each share. Each broker provides a Target Price (value in 12 months) which then provides us with an average for each stock. We then compare that average to the current price as a percentage. IE Macquarie price $176.95 Av. Target Price $205.96= 85.9% (meaning 14.1% upside over next 12 months) + income 4.35% (including franking). To get the CORE Index we take the average across the 30 stocks. This provides us with a market average as there are up to 80 teams of analysts providing the research and target prices. The CORE Watchlist stocks represent more than 55% of the ASX 200 and so provide us with a good indicator of the market value. When it’s at 100% then the market is fully priced. We have seen that when the index is below 90%, then it’s good buying, but that doesn’t happen very often. Should you have any questions, please let me know. The Core index increased from 86.93% to 87.35%. But still near the lowest level since the Trump tariffs. If we removed the 4 banks, the index falls to 83.48%. Overall Earnings Per Share (EPS) FY26 increased from 11.21% to 12.59% more energy upgrades FY27 decreased from 7.33% to 6.93% Most expensive – CBA 135.4% (176.5% highest ever). Least expensive – NextDC (NXT) data centres 53.7% The CORE Watchlist remains very mixed. It has 8 (7) stocks trading above 100%; they are; ANZ CBA NAB RIO STO TLS WBC WDS WOW lowest number ever is 0, highest is 15. While 14 (16) is trading below 85% (the highest is 18, and the lowest is one). ALL AMC CPU CSL GMG JBH LLC NEC NXT ORA ORI RMD SEK SHL (Figures in brackets are last Not So). STOCKS TRADING BELOW ALL BROKER FORECASTS ARE AS FOLLOWS: (it has been a handy indicator in the past). 17 out of the 30 CORE stocks are trading below the lowest broker target price. Highest 24. Lowest is 2. ALL current price $46.15 Broker range $63 to $74 AMC current price $58.53 Broker range 68.88 to $91.25 BXB current price $22.83 Broker range $23.35 to $28.10 CPU current price $27.93 Broker range 32.40 to $39.30 CSL current price $138.93 Broker range $176 to $235.00 GMG current price $26.08 Broker range $29.15 to $41.50 LLC current price $3.22 Broker range $4.50 to $6.30 MQG current price $205.59 Broker range $210 to $255 NXT current price $11.26 Broker range $19 to $21.45 NEC current price $0.97 Broker range $1.20 to $1.41 ORA current price $1.87 Broker range $2 to $2.50 ORI current price $20.31 Broker range $25.95 to $30 RMD current price $32.21 Broker range $43.70 to $50 S32 current price $4.42 Broker range $4.75 to $5.20 SEK current price $13.84 Broker range $18.50 to $31 SHL current price $19.98 Broker range $21 to $28.64 WES current price $73.34 Broker range $74.30 to $91 Added Removed COL |
| Banking Index (changes since last Not So) Like the CORE Watchlist index, the Banking index is the four major banks’ average target price based on research from up to 6 brokers. The percentage below 100% is the potential upside over the next 12 months (not including income). If at or over 100%, then this indicates the Banks are fully priced. The banking index decreased from 113.4% to 112.5%. |
| Other Indicators (changes since last Not So) US VIX (Fear) Index decreased from 31 to 23.87. Normal is 10-17. Above normal but down on TACO, but it could remain above this level for a while. Iron Ore increased from $106.10 to $107.35. Quietly rising. Focus still on other metals. Copper increased from $5.46 to $5.68. It reached an all-time high of $6.11 on 6/1/26. Gold increased from $4490 to $4703. New ATH $5589.38 28/1/26. Gold not acting like the “fear safe haven of the past”. Silver increased from $69.77 to $73.17 AUD/USD increased from 68.7c to 68.9c. Asian markets – MIXED. US 10-year Bonds decreased from 4.43% to 4.35%. 2-year rate 3.85%. 30 year rate below 5% at 4.91%. German 10 year Bonds decreased from 3.11% to 3.00% Japanese 10 year Bonds increased from 2.27% to 2.39%. Highest since July 2007 30-year Bond hit an ATH of 3.25% Aussie Bonds 10 year Bonds decreased from 5.10% to 5.01%. 2025 high 5%. Oil prices, Brent, decreased from $112.57 to $109.03 Tungsten has finally peaked (so far). China decreased from $2459mtu to $2442mtu. European price increased from $2800mtu-$3150mtu to $3100 to $3200mtu (only changes once a week). A year ago the price was $335mtu. EQR was up 14% for March. |
| Top Stories On Tuesday, 3 March, the ASX fell 124 points to close at 9077. After hitting a new ALL TIME CLOSING HIGH yesterday of 9201. The reality of the Middle East conflict finally hit the Australian market today with a drop of 1.3%. Risk Off was the order of the day as Australia revealed that oil supplies are extremely low and the drones and missiles from Iran were being sprayed around the Middle East suggesting that this may not be a quick war. UBS upgraded their ASX 200 target to 9400. Global X has outlined three different scenarios regarding the Middle East conflict. We are watching the conflict and looking for opportunities, but at this point we prefer not to “catch a falling knife” and so are waiting for things to unfold as they could get worse before getting better. Stories below: ASX reporting seaosn Middle East turmoil NVIDIA record quarterly profit Magnificent 7 are struggling in 2026 Super contribution changes for FY27 We are happy for you to share our Not So Daily Bulletin with family and friends. If we can help them, we are also happy to chat. |
| ASX reporting Season UBS provided the following summary Half yearly reported is now done… and we were impressed Through a month where global sentiment shifted towards ‘looking for reasons to sell’, the Aussie market powered to all-time highs, delivering its strongest February gains in seven years. Fundamentals drove this outcome, with Banks and Miners leading the way. Additional breadth was provided through positive reads from the domestic consumer facing businesses (households are still spending & trading updates were OK), and the clear structural capex themes which are still benefiting many Industrial stocks. Profit upgrades have added to the pace of overall ASX200 earnings growth, which now stands at +13.6% y/y for FY2026, up from +11.3% a month ago, and just +3.0% six months ago. The upward momentum in earnings revisions for the ASX200 is currently running at its strongest since mid-2022. Extreme share price volatility seen again…but creating opportunities. Wild share price moves were again a feature through this reporting period, with 12 ASX100 companies experiencing absolute share price moves of over 10% on result day. We were not surprised, having already noted the structural step up in volatility which has played out over the past few years, BHP and CBA’s rising weight in the ASX200 (which now stands at an all-time high has also created headaches. Underneath the surface however the environment for stockpickers actually seems good, with stock price correlations low and declining, and a wide dispersion in returns. AI threats (and benefits) are finally starting to feel real. For the past two years we have seen companies being prolific in mentioning the investments they are making in AI… but were underwhelmed by how little they had to yet show for it. But it now feels like we have ‘crossed the Rubicon’, with household names such as CBA, Telstra, Breville, Seek, Superloop, WiseTech, Woolworths, Coles and IDP Education each pointing at results to the quantifiable impacts that their AI investments are now having on the profitability and productivity of their businesses. How this ultimately plays out we do not know, but the period of intrigue, questioning, and related share price volatility, is set to continue. Upgrade ASX200 year-end target, increased to 9400 (was 8900) Results through February support our positive equity market stance, and our economists’ view of an economy which has been running ‘too hot’ (such that the RBA will be forced to tighten again in May). Earnings upgrades, and the prospect of more to come, have eased valuation concerns, and prompted us to increase our year-end ASX200 market target to 9400. The next batch of quarterly updates in May will provide guides on how corporates are faring in this just began rate hiking cycle. But given 13 rate hikes from the RBA through the period 2022/23 barely left a dent, we don’t expect the two (or maybe) three moves up in this cycle to materially impact company profits. |
| Middle East Turmoil Global X has looked at a several scenarios relating to the Middle East conflict. 1.Base Case – Contained but Tense In this scenario, retaliation continues but remains measured and partially telegraphed. Shipping disruption around Hormuz proves temporary and insurance markets normalise within weeks. There is no sustained impairment of physical supply. Oil would likely hold an elevated risk premium but struggle to move structurally higher. Gold would retain support given geopolitical uncertainty. Equities would remain volatile but stabilise as escalation risk plateaus. Real yields would remain broadly intact, allowing the US dollar to stay firm in the near term. Under this outcome, geopolitical friction remains structurally higher, supporting medium-term allocations to gold, defence and energy security without triggering a broad macro reset. 2. Bear Case – Sustained Strait Disruption Disruption to Hormuz flows persists, tanker insurance remains impaired and physical supply is materially affected. Energy becomes a true macro shock rather than a volatility event. Oil would likely move structurally higher and LNG markets would tighten significantly. Asian economies, particularly China, India, Japan and Korea, would face growth pressure first given their structural import dependence. Equity markets would broaden into risk-off territory and real yields would likely fall as growth expectations weaken. The US dollar would initially strengthen on risk aversion but could later become more sensitive to global growth dynamics. In this environment, gold would likely outperform meaningfully as both geopolitical and macro uncertainty rise. Defence exposure would benefit from accelerated military spending expectations. Energy infrastructure and security themes would move from cyclical to structural tailwinds. 3. Bull Case – Rapid Containment In this scenario, backchannel diplomacy limits further escalation and shipping flows normalise quickly. The market’s elevated starting risk premium compresses.Oil would retrace sharply as supply fears fade. Gold would likely give back part of its recent gains but remain supported structurally. Equities could experience a relief rally given how elevated volatility metrics were coming into the event. Real yields would remain anchored to macro data rather than geopolitical risk.Under this outcome, the broader thematic direction remains intact, but near-term tactical upside would favour cyclicals over defensive positioning. |
| NVIDIA record quarterly Profit NVIDIA the largest company in the world valued at $US4.43trillion NVIDIA posted record Q4 revenue of $68.1 billion, up 73% year over year, with earnings per share of $1.62 and strong 75% gross margins. The company’s Data Center segment continued to dominate, generating $62.3 billion, driven by huge demand for AI infrastructure and its Blackwell‑generation chips. Looking ahead, NVIDIA guided next‑quarter revenue to $78 billion (±2%), well above analyst expectations, and noted the forecast assumes no revenue from China, signaling robust demand elsewhere. NVIDIA also returned $41.1 billion to shareholders throughout the year, reinforcing confidence in its long‑term growth story as global AI investment accelerates. NVIDIA is part of a range of ETFs. QUAL, QHAL, IVV, RBTZ, IOO, SEMI |
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| Magnificent Seven struggling in 2026 The Magnificent Seven are struggling in early 2026 largely because of two major forces: soaring AI‑related spending and a broad market rotation away from mega‑cap tech. First, these companies are facing investor pushback as their AI capital expenditures have exploded, requiring massive ongoing investment in data centers, chips, and cloud infrastructure. This wave of spending has raised concerns about whether near‑term cash flows can keep up with the multiyear cost cycle required to maintain AI dominance. Analysts warn that these unprecedented capex levels are pressuring valuations and causing investors to question how sustainable last year’s breakneck earnings growth really is. Second, markets have entered a clear rotation toward value stocks, cyclicals, and overlooked sectors, creating a headwind for the tech‑heavy group. Investors who had been heavily concentrated in the Magnificent Seven are now reallocating toward sectors seen as cheaper and less volatile, especially as concerns about concentration risk rise. As a result, even companies with solid fundamentals are seeing share prices slide simply because capital is flowing elsewhere. This shift is visible in the performance gap between growth and value ETFs and in commentary from market strategists who note that tech’s leadership is taking a breather after years of dominance. Geopolitical tensions and fears of an AI “mini‑bubble” have only added to investor caution. To illustrate this further, the table below shows the returns ove the last 3 years for each of the mag 7, with all being in the negative for 2026. However the Fwd PE column is the most interesting as PE valuations have reduced to very normal level of early 20’s. Again by comparison CBA has a forward PE of 25.3. The Mag 7 haven’t looked this cheap for a several years. |
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| Super changes for FY2027 The main changes for FY27 were announced this week. Concessional contribution will increase from $30k to $32.5kNon Concessional contributions will increase from $120k to $130k Total Balance Cap (total allowed in pension phase) increased from $2m to $2.1m Financial Planning Snippets – update PLEASE BE VIGILANT regarding financial scamming. If anyone is requesting financial information from you (via phone, email, text, or social media), please contact us first or ask them for their ABN. Super Guarantee (SGC) for employees increases to 12% from 1/7/25. Concessional super contributions maximum of $30kCommonwealth Seniors Health Care card has seen the income limit increase to $158,440 (couple) $99,025 (single). If you are of Age Pension age and don’t have the card, please let us know. Macquarie Cash accounts – IF CHANGING YOUR PHONE, YOU NEED TO DEACTIVATE AUTHENTICATOR AND SWITCH TO THE NEW PHONE New AGED CARE fees come into effect from 1/11/25. Only for those entering care after this date. |
| Other Stories US Court rejected US Govt delay in issuing refunds for illegal tariffs |
| Broker Target Price Changes Target Prices should be viewed as a compass (the general direction) rather than a GPS destination. Ord Minnett Coles (COL) decreased from $24.50 to $22 Morgans Morgan Stanley Macquarie COL decreased from $24.50 to $23.70 NextDC (NXT) decreased from $22.30 to $20.80 Bell Potter/Citigroup COL decreased from $25.40 to $23 UBS COL decreased from $25 to $24. Tracking changes for 2026 Upgrades 120 Downgrades 96 |
| Core Watchlist Index (changes since last Not So) The CORE Watchlist is a collection of 30 Australian shares, predominantly “Blue Chip”. We obtain research from up to 6 brokers on each share. Each broker provides a Target Price (value in 12 months) which then provides us with an average for each stock. We then compare that average to the current price as a percentage. IE Macquarie price $176.95 Av. Target Price $205.96= 85.9% (meaning 14.1% upside over next 12 months) + income 4.35% (including franking). To get the CORE Index we take the average across the 30 stocks. This provides us with a market average as there are up to 80 teams of analysts providing the research and target prices. The CORE Watchlist stocks represent more than 55% of the ASX 200 and so provide us with a good indicator of the market value. When it’s at 100% then the market is fully priced. We have seen that when the index is below 90%, then it’s good buying, but that doesn’t happen very often. Should you have any questions, please let me know. The Core index decreased from 93.44% to 91.86%. If we removed the 4 banks, the index falls to 87.92% Overall Earnings Per Share (EPS) FY26 increased from 6.25% to 8.25% Resources upgradesFY27 decreased from 14.46% to 10.76% Most expensive – CBA 134.1% (176.5% highest ever). Least expensive – Seek.com (SEK) 60.5% The CORE Watchlist continues to be very mixed. It has 10 (8) stocks trading above 100%; they are; ANZ BHP CBA NAB RIO STO TCL WBC WDS WOW lowest number ever is 0, highest is 15. While 9 (8) is trading below 85% (the highest is 18, and the lowest is one). ALL CSL GMG LLC NEC NXT RMD SEK (Figures in brackets are last Not So). STOCKS TRADING BELOW ALL BROKER FORECASTS ARE AS FOLLOWS; (it has been a handy indicator in the past). 10 out of the 30 CORE stocks are trading below the lowest broker target price. Highest 24. Lowest is 2. ALL current price $48 Broker range $66 to $74 BXB current price $24.22 Broker range $24.85 to $29.40 COL current price $21.52 Broker range $22.90 to $25.40 CSL current price $153.27 Broker range $178 to $235.00 GMG current price $30.32 Broker range $31.25 to $41.50 LLC current price $4.58 Broker range $5.25 to $6.30 NXT current price $13.92 Broker range $18.35 to $21.45 NEC current price $1.07 Broker range $1.20 to $1.41 RMD current price $36.30 Broker range $43.70 to $50 SEK current price $16.27 Broker range $19.50 to $31 Added Removed SHL |
| Banking Index (changes since last Not So) Like the CORE Watchlist index, the Banking index is the four major banks’ average target price based on research from up to 6 brokers. The percentage below 100% is the potential upside over the next 12 months (not including income). If at or over 100%, then this indicates the Banks are fully priced. The banking index decreased from 119.3% to 117.4%. |
| Other Indicators (changes since last Not So) US VIX (Fear) Index increased from 19.86 to 21.44. Normal is 10-17. Above normal, but not showing a war impact yet. Iron Ore increased from $98.30 to $99.10. Little love for iron ore. Focus on other metals. Copper decreased from $6.06 to $5.99. It reached an all-time high of $6.11 on 6/1/26. Gold increased from $5296 to $5375. New ATH $5589.38 28/1/26. Silver decreased from $93.83 to $90.08AUD/USD decreased from 71.13 to 70.96c. Asian markets – DOWN US 10-year Bonds increased from 3.95% to 4.06%. 2-year rate 3.49%. 30 year rate below 5% at 4.71%. German 10 year Bonds increased from 2.64% to 2.72% Japanese 10 year Bonds increased from 2.11% to 2.13%. Highest since July 2007 30-year Bond hit an ATH of 3.25% Aussie Bonds 10 year Bonds increased from 4.64% to 4.74%. 2025 high 4.95%. Oil prices decreased from $67.29 to $72.71 Maybe more coming. Tungsten is still going up. China increased from $1944mtu to $2077mtu. European price $1890-$1998mtu (only changes once a week). A year ago the price was $335mtu. EQR hit a high of 39c today before closing at 32.5c. |
| This week & next week Last, “Not So” opened in 7 Aust states (excl NT), 6 US states, Bulgaria, Sweden, Indonesia, Sweden, India, Israel, Netherlands and Norway This week: March meetings. Thursday-Friday Melbourne. Nick sitting his Financial Planning exam (Thursday).Next week: March reviews – Investment committee meeting Thursday with Brad Matthews in Deni. Away Friday |
| Top Stories |
| On Wednesday, 11 February, the ASX jumped 147 points to close at 9015 8889. That’s 126 points higher than the last Not So. The ASX crossed over 9000 again for the first time since 28/10/25. Today, the market was mainly driven by the CBA result (40% of the ASX gain), which was better than expected, and a slight increase in the dividend. The stock jumped 6%. At the other end, CSL was hammered as the board sacked the CEO. It was down 12% during the day and finished 4% lower. From Bell Potter’s Coppo report And FYI – how’s this for one of the markets great ironies !!! BUYS HOLDS SELLS CBA {169.56 10.82 6.82%} ZERO 3 14 CSL {163.44 -7.95 –4.64%} 14 4 ZERO The other banks also got a lift as the banking index jumped from 114.9% to 119.2%. Resources also saw a solid lift today with BHP up 1.6% and RIO 1.2%. EQR was up another 19% The US market was mixed overnight after retail sales came in weaker than expected. Other important data this week includes the US CPI and US jobs. The AUD rallied to over 71c on the back of the weaker US data. Stories below include; Software Meltdown – UBS Reporting season We are happy for you to share our Not So Daily Bulletin with family and friends. If we can help them, we are also happy to chat. |
| Software Meltdown – stay patient or buy dip UBS provided the following research The sell-off across the software sector this month, building on weakness YTD and throughout 2025, was severe, triggering an even sharper debate about AI disruption risk. In this note, we weigh in with our view of the bull and bear case on software stocks, with a focus on the seat-based SaaS or application software stocks for which the perceived terminal value risk is highest. Bottom line, should investors stay patient or buy the dip? We’re ok staying patient and prefer the infra, data and security-exposed names near-term. The Catalyst Path From Here At the center of the sell-off is the belief – legitimate in our view – that AI-driven change is coming faster to the software sector than expected, given the combination of a rapid pace of AI model improvement (Google Gemini 3 in November, Anthropic Claude 4.5 in December, Open AI in the next few months?), a growing ability to leverage these new models into new use cases (creating overlap with software firms), declining inference costs and progress in terms of enterprise AI receptivity (evident in Palantir’s outstanding results). We’re likely sitting in front of a steady stream of such news and we are loosely expecting some form of “AI pivots” from software firms (faster re-architecting of the core, lower GMs, shift to new pricing models, perhaps accompanied by headcount cuts). Against this backdrop, the growth rates of many SaaS/apps firms are stable at best (no bending of the growth curve yet despite AI revs) and we haven’t even seen real evidence of any AI disruption in the numbers. Bending this negative narrative could take time, as we likely need to see growth rates accelerate (or at least see upward estimate revisions), more partnerships between the SaaS firms and the likes of OpenAI and Anthropic (sending a message that the two parties can co-exist) and more comforting anecdotes (we’ve offered up several in this report) that net spending with apps firms are still UP even with AI-driven customer headcount cuts. UBS Top Picks For well over a year now, we’ve expressed a clear bias toward infrastructure and data-exposed names (Microsoft, Snowflake, Datadog) as well as cybersecurity stocks (Okta, Zscaler), for which the AI disruption risk appears lower and customer spending trends remain healthy. These infra/data/security-exposed stocks have been thrown out with the bath water, and if we were to wade back in to the software sector, this is where we’d start. While we’d prefer to remain patient with the SaaS/apps stocks, we can envision a path for ServiceNow and Salesforce to come out of this AI period stronger. Reporting Season UBS provided an update on the earnings season. Earnings should show how the economy gained momentum through 1H26 The strength in the domestic economy has not surprised us, and is why the RBA had to hike rates this week after only having just finished its cutting cycle back in August. Profit growth for ASX200 companies this year will be in excess of 10%…six months ago this number was just 3%. Miners are looking at profits to leap by 30%, while Banks also see themselves with earnings tailwinds. Meanwhile, Technology stocks (which had been a bright spot for earnings over recent years) have stumbled badly over the past six months and now look set to see their profits shrink. Stocks where UBS analysts see UPSIDE risk at result Through February, our analysts see upside risk at results from BUY-rated names Coles, Cleanaway, Domino’s Pizza, Flight Centre, Goodman, GPT Group, HomeCo Daily, IAG, IDP Education, Navigator Global, Qantas, Sigma, Universal Store and Wisetech Stocks where UBS analysts see DOWNSIDE risk at result Through February our analysts see downside risk at results from Accent Group, Aurizon, Bendigo Bank, Charter Hall LW REIT, Guzman y Gomez, JB Hi-Fi, Mirvac, Monadelphous, Orora, Reliance Worldwide, Scentre Group, Stockland, Super Retail, TPG Telecom, Treasury Wine and Woolworths. Theme 1: ‘staying with cyclicals’ The strength in the domestic economy, PMIs >50, rising A$, and earnings momentum all tilt towards cyclical-type GDP businesses being able to perform. Through February results, many of these more ‘value’ inclined businesses will be keen to highlight their linkages to the domestic economy, or global commodities, and hence offer investors a place of ‘relative safety’ through this current washout being seen through much of the quality segments of the market. Theme 2: ‘beware the quality meltdown’ The ‘capital light / growth / quality’ companies will be on the back foot as investors apply a level of scepticism which hasn’t been seen for quite some time. Until today, the downward pressure on valuations had been isolated to Tech. This contrasts with the last time we saw such valuation compression through the market back in February 2022. At that time, the invasion of Ukraine impacted not just the relativity within sector valuations, but saw the overall market de-rate with the ASX200 fwd PE falling below 13. Currently the market multiple still sits above 18x, which suggests that the wobbles in Tech are of the micro, not macro, nature, and have (thus far) been contained. Theme 3: ‘return of the old guard’ The pain being seen right now in Aussie Tech like stocks, combined with the surge upwards from Miners and health of Bank earnings, has meant that the ‘old guard’ sectors of Resources and Banks have now reached the highest combined weight they have held in the ASX200 for 15 years. Results through February should allow stocks in these sectors to highlight their earnings resilience amid AI/Tech worries. The half-yearly results. From the CORE Watchlist. These are the dates we expect the profit results. 30/1 Resmed – good result with 11% growth for the quarter. Dividend same 4/2 Amcor – good quarterly result. $55m synergies from Berry acquisition. Dividend same 10/2 Computershare 11/2 CBA – good result. $5.4bn up 6% dividend $2.35 up 4%. CSL – not good. profit $1.9bn US down 7% 12/2 South 32 Orora 16/2 JB HiFi 17/2 BHP Seek.com 18/2 Santos 19/2 Brambles Goodman RioTinto Sonic Health Transurban Wesfarmers 20/2 Telstra 23/2 Lend lease 24/2 Nine Entertainment NextDC Woodside 25/2 Woolworths 27/2 Coles Financial Planning Snippets PLEASE BE VIGILANT regarding financial scamming. If anyone is requesting financial information from you (via phone, email, text, or social media), please contact us first or ask them for their ABN. Super Guarantee (SGC) for employees increases to 12% from 1/7/25. Concessional super contributions maximum of $30k Commonwealth Seniors Health Care card has seen the income limit increase to $158,440 (couple) $99,025 (single). If you are of Age Pension age and don’t have the card, please let us know. Macquarie Cash accounts – IF CHANGING YOUR PHONE, YOU NEED TO DEACTIVATE AUTHENTICATOR AND SWITCH TO THE NEW PHONE New AGED CARE fees come into effect from 1/11/25. Only for those entering care after this date. |
| Other Stories Rio Tinto merger with Glencore called off. CSL CEO steps down. |
| Broker Target Price Changes Target Prices should be viewed as a compass (the general direction) rather than a GPS destination. Ord Minnett Rio Tinto (RIO) increased from $158 (highest broker) to $173 (still highest broker) Morgans BHP increased from $47.90 to $48 RIO increased from $140 to $142 Morgan Stanley Woolworths (WOW) increased from $29.30 to $31.20 Macquarie BHP increased from $48 to $51 Brambles (BXB) decreased from $25.20 to $24.85 South 32 (S32) increased from $4.60 to $4.80 Transurban (TCL) decreased from $14.55 to $14.46 Bell Potter/Citigroup UBS Computershare (CPU) decreased from $37.80 to $35.30 RIO increased from $140 to $160 Tracking changes for 2026 Upgrades 55 Downgrades 52 |
| Core Watchlist Index (changes since last Not So) The CORE Watchlist is a collection of 30 Australian shares, predominantly “Blue Chip”. We obtain research from up to 6 brokers on each share. Each broker provides a Target Price (value in 12 months) which then provides us with an average for each stock. We then compare that average to the current price as a percentage. IE Macquarie price $176.95 Av. Target Price $205.96= 85.9% (meaning 14.1% upside over next 12 months) + income 4.35% (including franking). To get the CORE Index we take the average across the 30 stocks. This provides us with a market average as there are up to 80 teams of analysts providing the research and target prices. The CORE Watchlist stocks represent more than 55% of the ASX 200 and so provide us with a good indicator of the market value. When it’s at 100% then the market is fully priced. We have seen that when the index is below 90%, then it’s good buying, but that doesn’t happen very often. Should you have any questions, please let me know. The Core index increased from 93.08% to 93.13%. If we removed the 4 banks, the index falls to 89.12% Overall Earnings Per Share (EPS) FY26 increased from 5.41% to 5.47% FY27 decreased from 14.23% to 14.18% Most expensive – CBA 141.7% (176.5% highest ever). Least expensive – Seek.com (SEK) 60.5% The CORE Watchlist has 10 (8) stocks trading above 100%; they are; ANZ BHP CBA NAB RIO TLS WBC WDS WES WOW lowest number ever is 0, highest is 15. While 8 (10) is trading below 85% (the highest is 18, and the lowest is one). ALL CSL GMG JBH LLC NXT RMD SEK (Figures in brackets are last Not So). STOCKS TRADING BELOW ALL BROKER FORECASTS ARE AS FOLLOWS; (it has been a handy indicator in the past). 12 out of the 30 CORE stocks are trading below the lowest broker target price. Highest 24. Lowest is 2. ALL current price $52.22 Broker range $66 to $74 BXB current price $22.72 Broker range $25.50 to $29.40 COL current price $21.75 Broker range $22.90 to $25.40 CSL current price $181.24 Broker range $188 to $275.00 GMG current price $30.75 Broker range $31.25 to $41.50 JBH current price $83.27 Broker range $87.80 to $112 LLC current price $4.67 Broker range $5.25 to $6.30 NXT current price $13.22 Broker range $18.35 to $21.45 NEC current price $1.19 Broker range $1.20 to $1.41 RMD current price $37.45 Broker range $43.70 to $50 SEK current price $19.63 Broker range $27.50 to $32.50 SHL current price $22.57 Broker range $23.97 to $29.33 Added GMG Removed AMC |
| Banking Index (changes since last Not So) Like the CORE Watchlist index, the Banking index is the four major banks’ average target price based on research from up to 6 brokers. The percentage below 100% is the potential upside over the next 12 months (not including income). If at or over 100%, then this indicates the Banks are fully priced. The banking index increased from 112.2% to 116.1%. The index has jumped amid volatility in gold /silver over the last week. |
| Other Indicators (changes since last Not So) US VIX (Fear) Index decreased from 18.64 to 17.79. Normal is 10-17. Just above normal. Iron Ore decreased from $102.15 to $100.80. The average expectation for 2026 has increased from $92 to $94.75. Copper increased from $5.83 to $5.94. It reached an all-time high of $6.11 on 6/1/26. Gold increased from $4928 to $5081. New ATH $5303.6 last month. Silver increased from $74 to $83.24 AUD/USD increased from 69.77c to 71.04c. Asian markets – MIXED US 10-year Bonds decreased from 4.27% to 4.14%. 2-year rate 3.45%. 30 year rate below 5% at 4.78%. German 10 year Bonds decreased from 2.86% to 2.80% Japanese 10 year Bonds decreased from 2.24% to 2.23%. Highest since July 2007 30-year Bond hit an ATH of 3.25% Aussie Bonds 10 year Bonds decreased from 4.84% to 4.77%. 2025 high 4.95%. Oil prices increased from $63.77 to $64.52 The price of tungsten is still going up. China increased from $1473 mtu to $1603 mtu. The European price range increased from $1100mtu-$1398mtu to $1200-$1550mtu (only changes once a week. Another new ATH. EQR shares have continued to move higher, jumping 4c today to 25c. They were 3c as at 30/9/25. |
| This week & next week Last, “Not So” opened in 7 Aust states (excl NT), 6 US states, Bulgaria, Sweden, Czech Rep, Indonesia, Turkey, India, Greece and UK. . This week: February reviews.Next week: February reviews. |
| Top Stories |
| On Tuesday, 13 January, the ASX gained 49 points to close at 8809. That’s 90 points higher than the last Not So. The commodities sector is continuing to rally as Gold, Silver, Copper and Tungsten hit or near ALL TIME HIGHS. Markets are in short supply for critical materials as China controls a raft of these minerals, and precious metals are finding support as President Trump is espousing policies that are more akin to a “banana republic”, which is causing parts of the market to be concerned (rally in gold and silver). The US jobs report was weaker than expected, which puts some downside pressure on interest rates; however, the inflation report this week might slow that pressure down (if the rate is higher than expected). The US markets seem unconcerned as the Dow Jones and S&P 500 hit new ATH. They are approaching 50,000 and 7,000, respectively. In Australia, the RBA’s February meeting appears to be 50/50 at this stage between leaving rates on hold and raising them, as retail spending was higher than expected this week. At this stage, Kevin “the interest rate whisperer” Hanson is suggesting the RBA will be on HOLD. In fact, he thinks they might be on HOLD all year. Big call Kev! CBA dominated the ASX last year, as its market capitalisation rose to over $300 billion (share price x number of shares). However, the gap between CBA and BHP has narrowed over the last few weeks. CBA $258bn & BHP $241bn. Morgan Stanley is expecting the ASX 200 to finish 2026 at 9250 Below is; * a piece from Brad Matthews (PW Investment Committee chair) about the market outlook * The market view on President Trump and the US Federal Reserve chair. * The January Barometer We are happy for you to share our Not So Daily Bulletin with family and friends. If we can help them, we are also happy to chat. |
| Market Outlook 2026 Brad Matthews, our investment consultant, has outlined his outlook. December’s small gain on global equity markets completed the 3rd successive calendar year of strong market growth, which has seen returns from the global equity asset class average 20.3% per annum over these 3 years. Clearly, this rally is in a mature phase, with valuations extended. In addition, the pattern of recent market growth suggests investors are becoming much more circumspect around technology stocks and the potential for artificial intelligence-related capital expenditure to drive earnings growth continuously higher. However, despite some recent caution on equity markets, there remains a strong willingness by investors to continue pushing valuations higher, with the more recent focus being on those parts of the market that have been “left behind” and are trading more cheaply than the market average. The continuation of modest but positive economic growth, a well-functioning and liquid financial sector and the absence of any significant increase in credit defaults, may be all factors that explain the ongoing positive sentiment across share markets. In addition, policy remains generally supportive of share markets, with December’s loosening of monetary policy in the U.S. potentially very important. In addition to lowering the cash rate, the commitment made by the U.S. Federal Reserve to commence purchasing treasury bills may indicate a willingness of the central bank to support liquidity and bank lending, despite remaining uncertainties over the trajectory of U.S. inflation. With changes in the membership of the Federal Reserve Bank Board expected in 2026, market consensus believes that this supportiveness of equity and bond markets will continue, if not improve, further in the year ahead. Australia is now somewhat out of step with the United States. Inflation here has picked up, despite subdued economic growth. Expectations of policy tightening (higher interest rates and more constrained government spending), combined with muted economic growth, is not a combination considered conducive to a strong performance on share markets. The less promising outlook for Australia has already been reflected on share markets to some degree. Australia’s recent share market underperformance would have been even more significant if not for a strong lift in the price of resource stocks (which has been partly driven by a surging gold price). One potential source of upside for the Australian share market is the possibility that inflation will re-commence its downward trajectory, thereby allowing a more supportive interest rate regime. This scenario would be a positive for both Australian share and bond valuations. Although the outlook for global equities may continue to be brighter than that for the local market, there are factors that could disrupt the current broad support for global equities. One example is U.S. inflation, and the possibility that it could start to surprise on the upside. Another is the possibility that the ambitious earnings expectations underwriting the U.S. technology sector fail to materialise. However, whilst it is instructive for investors to consider the possible risks and opportunities impacting market direction in the year ahead, it is normally the unknown (or non-forecastable) factors that have the most impact on markets. For example, 3 years ago, very few investors would have predicted the impact the development of artificial intelligence would have on share markets. Given the future influence of unknown risks and opportunities, investment strategies that pursue genuine diversification, with professional management and the ability to adjust exposures in a timely fashion, are likely to be the most successful over the longer term. |
| US Federal Reserve (Fed) Independence One of the cornerstones of the US economy and the strength of the US market is that the US Fed has been considered independent of political influence in making interest rate decisions. This has been a pillar that markets have relied on to keep the economic boat steady, as they focus on employment and inflation, rather than the political will of the ruling party. It’s the same premise our RBA works on, and it has helped reduce the boom-bust cycles we have seen in previous decades. However, President Trump is very keen to change this, and, like most things, is looking to bring the Fed under his control, as he sees the interest rate as too high. The latest move is that the US Department of Justice (DoJ) is investigating the US Federal Reserve chairman, Jerome Powell, for overspending (fraud) on Federal Reserve renovations, with the aim of removing Powell (who steps down from the chair role in May). Markets appear to have viewed this latest step as a non-event, suggesting that they believe the Fed’s independence remains intact. Some of the reasons could be; * The DOJ is only investigating, and based on Trump’s previous retaliation cases (Comey, Cook, Kelly, James, Schiff & Smith), they have all gone nowhere, which suggests Powell will remain as chair until May. * Replacing Powell as Fed chair in May will give President Trump another opportunity to influence the Fed, but the chair only has one vote. There are 12 votes on the Fed, and President Trump will have influence over a couple. The market thinks the Fed will maintain its independence even with a new chair. If the market loses confidence in the Fed’s independence, then market volatility is likely to increase, as will interest rates on U.S. bonds, which have reached a total of $37 trillion.The US dollar may weaken through this process as global investors allocate money to other markets (US equity markets account for 50% of all global markets and 70% of the MSCI World index). This is why we are looking to hedge the currency with some of the international investors, as the US dollar has potential for weakness. IE, The AUD could move into the 70s or higher over the year. |
| The January Barometer The direction of the market in January can dictate the direction for the year. This is known as the January Barometer. From 1950 to 2024, it had an 84% accuracy rate, as the positive or negative result in January has consistently led to the same direction of the market over the year. There is another barometer: “the first five days of January” barometer. Over the last 76 years, the first 5 days have been positive 48 times. Of those 48 years, 42 have seen positive investment returns from the market, which is an 87% conversion rate. The first 5 days were negative 28 times, with only 11 years remaining negative, which is a 40% conversion rate. The first five days of 2026 were positive, which is a good sign (not a guarantee), but a good start for a positive return in 2026. Financial Planning Snippets PLEASE BE VIGILANT regarding financial scamming. If anyone is requesting financial information from you (via phone, email, text, or social media), please contact us first or ask them for their ABN. Super Guarantee (SGC) for employees increases to 12% from 1/7/25. Concessional super contributions maximum of $30kCommonwealth Seniors Health Care card has seen the income limit increase to $158,440 (couple) $99,025 (single). If you are of Age Pension age and don’t have the card, please let us know. Macquarie Cash accounts – IF CHANGING YOUR PHONE, YOU NEED TO DEACTIVATE AUTHENTICATOR AND SWITCH TO THE NEW PHONE New AGED CARE fees come into effect from 1/11/25. Only for those entering care after this date. |
| Other Stories Amcor (AMC) is consolidating into 5 shares into 1. Therefore, for current shareholders, you will have 1 share for every 5 you owned yesterday. It’s currently trading on a deferred basis under code AMCDD for the next week. The share of AMCDD closed today at $64.10 |
| Broker Target Price changes Target Prices should be viewed as a compass (the general direction) rather than a GPS destination. Ord Minnett Morgans Morgan Stanley Aristocrat Leisure (ALL) decreased from $73.70 to $72.40 Lend Lease (LLC) decreased from $6.58 to $5.70 (lowest broker) Santos (STO) decreased from $7 to $6.76 (lowest broker) Telstra (TLS) decreased from $4.96 to $4.95 Wesfarmers (WES) decreased from $92.60 (Highest broker) to $86 Macquarie BHP increased from $43 (lowest broker) to $48 (equal highest broker)South 32 (S32) increased from $3.70 to $4.20 Bell Potter/Citigroup UBS Tracking changes for 2026 Upgrades 3 Downgrades 10 |
| Core Watchlist Index (changes since last Not So) The CORE Watchlist is a collection of 30 Australian shares, predominantly “Blue Chip”. We obtain research from up to 6 brokers on each share. Each broker provides a Target Price (value in 12 months) which then provides us with an average for each stock. We then compare that average to the current price as a percentage. IE Macquarie price $176.95 Av. Target Price $205.96= 85.9% (meaning 14.1% upside over next 12 months) + income 4.35% (including franking). To get the CORE Index we take the average across the 30 stocks. This provides us with a market average as there are up to 80 teams of analysts providing the research and target prices. The CORE Watchlist stocks represent more than 55% of the ASX 200 and so provide us with a good indicator of the market value. When it’s at 100% then the market is fully priced. We have seen that when the index is below 90%, then it’s good buying, but that doesn’t happen very often. Should you have any questions, please let me know. The Core index increased from 91.51% to 92.22%. If we removed the 4 banks, the index falls to 88.57% Overall Earnings Per Share (EPS) FY26 decreased from 7.05% to 7.02% FY27 increased from 12.95% to 13.06% Most expensive – CBA 130.7% (176.5% highest ever). Least expensive – NXT 62% The CORE Watchlist has 8 (8) stocks trading above 100%; they are; ANZ BHP CBA NAB RIO S32 WBC WOW lowest number ever is 0, highest is 15. While 11 (11) is trading below 85% (the highest is 18, and the lowest is one). ALL AMC BXB COL CSL GMG LLC NXT RMD SEK STO (Figures in brackets are last Not So). STOCKS TRADING BELOW ALL BROKER FORECASTS ARE AS FOLLOWS; (it has been a handy indicator in the past). 12 out of the 30 CORE stocks are trading below the lowest broker target price. Highest 24. Lowest is 2. ALL current price $57.22 Broker range $71 to $75 BXB current price $23.39 Broker range $25.50 to $29.40 COL current price $21.15 Broker range $22.90 to $26.60 CSL current price $173.32 Broker range $188 to $275.00 GMG current price $30.65 Broker range $33.50 to 41.50 LLC current price $5.05 Broker range $5.85 to $6.74 NXT current price $12.48 Broker range $18.00 to $22.10 NEC current price $1.15 Broker range $1.22 to $1.41 RMD current price $38.50 Broker range $47.04 to $51 SEK current price $23.17 Broker range $30.80 to $32.50 SHL current price $23.03 Broker range $24 to $29.40 STO current price $6.14 Broker range $6.80 to $8.15 Added Removed ORI |
| Banking Index (changes since last Not So) Like the CORE Watchlist index, the Banking index is the four major banks’ average target price based on research from up to 6 brokers. The percentage below 100% is the potential upside over the next 12 months (not including income). If at or over 100%, then this indicates the Banks are fully priced. The banking index increased from 113.4% to 115%. The banking index has continued to trade well above 100% for the last 18 months. Over this period, the other two major sectors, resources and health, have underperformed. The banking analysts continue to have SELL recommendations on the big four banks, with much lower target prices, especially for CBA, which is still trading at 130% of the average target price. The switch from banks to resources may have started. |
| Other Indicators (changes since last Not So) US VIX (Fear) Index decreased from 15.45 to 15.12. Normal is 10-17. Iron Ore increased from $108.25 to $109.05. The average expectation for 2026 is $92. Copper increased from $5.82 to $6.05. It reached an all-time high of $6.11 on 6/1/26. Gold increased from $4474 to $4602. New ATH $4614 in January. Silver increased from $82.67 to $85.68 which is an all time high. AUD/USD increased from 66.95c to 67.05c. We believe the AUD may rally to 70c by 2026. Asian markets – MIXED US 10-year Bonds increased from 4.17% to 4.20%. 2-year rate 3.55%. 30 year rate below 5% at 4.85%. German 10 year Bonds decreased from 2.91 to 2.83% Japanese 10 year Bonds increased from 2.09% to 2.17%. Highest since July 2007 30-year Bond hit an ATH of 3.25% Aussie Bonds 10 year Bonds increased from 4.68% to 4.69%. 2025 high 4.95%. Oil prices increased from $58.07 to $60.24 The price of tungsten in China remained at $1038 mtu. The European price range increased from $900mtu to $940mtu to $950mtu to $987mtu. Finally, EQR is starting to follow. It now has a market cap of $500m |
| This week & next week Last, “Not So” opened in 7 Aust states (excl NT), 9 US states, Bulgaria, Sweden, Estonia, Turkey, Czech Republic, Switzerland & UK. This week: Back in the office. A new FINANCIAL PLANNER, Nick Barzen, is joining PW from tomorrow. We will provide more information in the next Update. We will disclose more details next week. |
| Top Stories |
| On Wednesday, September 3, 2025, the ASX fell 162 points to finish at 8739, its lowest point since 4/8/25. This was the fourth down day in a row and continues September’s record of being a weak month (seasonal weakness), even though the second quarter GDP(announced today) was better than expected at 0.6%. Likely to see the RBA on hold in September. According to Bell Potter’s Coppo report, a large seller was in the market all day (I’m not sure whether offshore or domestic). The selling was concentrated in the top 10 stocks, which represented 62% of the fall. CBA dropped to $164.55, its lowest price since 29/4/25. The market always has issues of concern to consider, hence the saying that it climbs a wall of worry, as it has been doing since the fall in April (Liberation Day). Apart from the September weakness, there is a risk that the issues of concern may provide the volatility we have been concerned about. Things the markets are watching: 1. President Trump is pressuring the US Federal Reserve to drop interest rates (they meet on Sept 17) and looking to change board members. 2. Long Bond rates are pushing higher (30-year rates are all higher in the UK, Japan, Germany, and the US). This means more interest is paid on Government debt. 3. US Courts have said most of the President’s Tariffs are illegal. If the Supreme Court agrees, approximately $96 billion could be paid back. This will put further pressure on interest rates. 4. Signs are that global inflation is starting to push back up. This may stop interest rates from falling. 5. A global slowing economy due to uncertainty from trade relationships. The US big stick approach may be witnessing another big stick with the summit held in China (Shanghai Cooperation Organisation – SCO) over the weekend. This is the 25th meeting of this group, which included China, India, Russia, Pakistan, Iran and the other stans. Additionally, the meeting was attended by a raft of other countries, including Egypt, Turkey, Indonesia, Malaysia and Vietnam. 6. The price of gold is hitting a new all-time high of $3,616.90. Gold is known to be an investor’s safe haven. 7. Technology valuations have pushed US markets to near ALL-TIME HIGHS. However, valuations remain reasonable for growth companies. NVIDIA, detailed below, has a PE of 29, as does Apple. Google has a PE of 21. These are certainly not like the dot com boom valuations that saw PE in 100’s or even 1000’s. The only Magnificent 7 with a PE in that ballpark is Tesla, which has a PE of 175 and has fallen 18% this year. None of these issues is new, and the market might decide that the benefits from lower interest rates, deregulation and the adoption of AI will provide more benefits than the list above. That’s why we take a long-term view and don’t try to trade the market. We will likely see more volatility in the coming weeks. We are happy for you to share our Not So Daily Bulletin with family and friends, and if we can help them, we are also excited to chat. |
| Value from the Reporting Season We have collated information from Morgan’s best ideas and Bell Potter regarding stocks in the CORE Watchlist. 1. CSL Ltd (CSL) Morgans – Healthcare. Although a softer 2H Behring result and awkward restructuring timing may unsettle investors, we see the growth engine intact, with cost savings reinforcing the path to sustained double-digit earnings growth. We have a BUY rating on CSL with a blended DCF, PE and EV/EBITDA based target price of A$293.83. Price Target $293.83 Div.Yield 2.3% PE FY26 19x 2y EPSg 11.0%. Bell Potter – Trading on a PE of 17.5 times FY27 (gave guidance of 7-10% NPAT growth for FY26, so I think they should do double-digit per annum EPS growth over the medium term). CSL’s Long Term PE average is closer to 25 times, so looks very compelling, as it trades below the market multiple at current, yet it’s a premium business. 2. Amcor (AMC) Morgans – Industrial AMC is a highly defensive business with leading global market positions and experienced management. We expect the addition of Berry, along with potential divestments, to enhance AMC’s growth outlook and balance sheet over the medium term. While execution of synergy targets will be the key, AMC has a strong track record in integrating large-scale transactions. Price Target $15.20 Div.Yield 6.3% PE FY26 11x 2y EPSg 12.0%. Bell Potter – Trading on a PE of 9.5 times FY27 (assuming all the synergies are realised with Berry) this is a standout buy! Yield over 6% FY27. 3. Woodside Energy (WDS) Morgans – We remain bullish on WDS as a business. The jump in net debt rightly increases delivery risk, but on the positive side the hurdles for WDS to unlock material value upside from here align with where its well-established core strengths sit. If oil prices hold steady we expect a discount in WDS’ share price to persist in the short term until it reassures on its capex profile and/or secures LALNG selldown(s). We remain cautious on the short-term outlook for oil prices, if any volatility were to unfold it would likely offer an attractive opportunity to increase positions. Price Target $29.60 Div.Yield 5.4% PE FY26 21x 2y EPSg -5% Bell Potter – Woodside are likely to have an earnings trough in FY26 with Scarborough production coming on at the end of 2026. BarrenJoey have earnings forecasts 50% higher than consensus for FY27 (see attached), and I think their numbers will be closer to correct over the medium term, as Trion production comes online in FY28 and Louisiana LNG in FY29, so there is going to be a big production uplift coming for the patient investor, and this should see the stock back in to the mid $30’s using a PE of 15, which is close to its long term average. 4. ResMed Inc (RMD) Morgans – Healthcare While weight loss drugs have grabbed headlines and investor attention, we see these products having little impact on the large, underserved sleep disorder breathing market, and do not view them as category killers. We view RMD’s overall fundamentals as sound, with profitability improving as margins expand. Price Target $47.86 Div.Yield 0.9% PE FY26 25x 2y EPSg 9.3% 5. Goodman Group (GMG) Morgans – Property GMG is a global industrial property group with a focus on infill sites across gateway markets. GMG actively manages its portfolio, growing Assets Under Management (AUM) and adding value through a buy, build, manage strategy. We view GMG as a high-quality, founder-led business with a robust balance sheet and a portfolio of Agrade data centre and industrial assets. Whilst uncertain, we see the opportunity in GMG’s 5GW powerbank and its capacity to see sustained earnings growth as development yields improve. Price Target $38.40 Div.Yield 0.9% PE FY26 26x 2y EPSg 13.0%. 6. Orica (ORI) Morgans – Industrials ORI is now not only the world’s largest explosives company, but it is also the global leader in geotechnical and structural monitoring in mining and civil infrastructure and the world’s largest producer of sodium cyanide. ORI is leading the industry with its technology offering. Importantly, this area is high growth and high margin work. ORI is set to deliver solid earnings growth over coming years reflecting strong demand, recontracting benefits, further mix/margin benefits and strong growth from Digital Solutions and Specialty Mining Chemicals. Management continues to execute well and has a solid track record. ORI is trading on attractive multiples which are at a discount to its 5-year average. Price Target $21.70 Div.Yield 4.6% PE FY26 12x 2y EPSg 11.2%. 7. Orora (ORA) – Bell Potter – Looks interesting with the company winning market share in their SaverGlass business (earnings seem to have bottomed here) with $50M of EBIT to flow through to their cans business from FY26, as they finish Rocklea expansion. Good buying in the low $2.00’s, as I think when their buyback finishes this year they are likely to launch another buy back due to the health of their balance sheet and this should see their earnings lift significantly. I think it will trade on a market multiple medium term, so EPS 16 cents FY27 multiplied by 18 equates to $2.88. Market is worried there is a structural decline in alcohol consumption, but the company is confident that SaverGlass is in a growth segment of premium spirits and wines. |
| NVIDIA – the largest company in the world NVIDIA (semi-conductors) is now clearly the largest company in the world, valued at $4.15 trillion. It had been battling Microsoft with a value of $3.75 trillion and Apple with a value of $3.41 trillion for that honour. NVIDIA is one of the most influential and innovative companies in the global technology landscape, especially in the era of artificial intelligence (AI), accelerated computing, and high-performance graphics. However, most people haven’t heard of it, let alone what it does. I have asked Co-pilot for a brief explanation. NVIDIA began as a graphics processing unit (GPU) manufacturer in 1993, and its invention of the GPU in 1999 revolutionised computer graphics and gaming. Today, it is a full-stack computing infrastructure company that provides: GPUs for gaming, professional visualisation, and data centres.AI hardware and software, including supercomputers and microservices for AI model deployment. Software platforms like CUDA (a parallel computing model), Omniverse (for digital twins), and Clara (for healthcare AI). Specialised systems for autonomous vehicles (NVIDIA Drive), robotics (Jetson), and edge computing. NVIDIA is central to the AI revolution: It powers AI factories—data centres optimised for training and deploying AI models. Its chips are used in large language models, robotics, autonomous vehicles, and medical imaging. Over 40,000 companies use NVIDIA AI technology, and its CUDA platform has over 53 million downloads. In July 2025, NVIDIA became the first publicly traded company to surpass a $4 trillion market valuation, underscoring its dominance and investor confidence in its role in shaping the future of tech. Broader Impacts Gaming: Over 200 million gamers use NVIDIA GeForce GPUs. Healthcare: AI frameworks like MONAI are transforming medical imaging. Robotics & Autonomous Vehicles: NVIDIA powers all top autonomous vehicle data centres and supports over 1.7 million robotics developers. Sustainability: Accelerated computing with NVIDIA chips could save nearly 30 trillion watt-hours of energy per year compared to traditional CPU-based systems. Would you like a visual summary or a timeline of NVIDIA’s evolution and milestones? Below is a graph of NVIDIA’s revenue breakdown per quarter since Q4FY21. The light green is the revenue from computer gaming, which has increased from $2.4bn to $4.3bn over the five years. However, the growth has been in the dark green data centres, which have seen revenue increase from $1.9bn in Q4FY21 to a whopping $41.1bn in Q2FY2026. The second graph shows where the revenue comes and goes. A total of $46bn for the quarter saw cost and operating expenses equate to $18.3bn and tax of $4.8bn, which means the Net Profit After Tax is $26.4bn for the quarter or 57c in every $1 of revenue. NVIDIA is part of a raft of ETFs we use: IVV, NDQ, QUAL, QHAL, RBTZ, IOO & SEMI |
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| Ongoing Fee Agreement – some need Reissuing Notification for Provincial Wealth clients As of 10 January 2025, new legislation has streamlined how financial advisers manage ongoing fee arrangements (OFAs). The annual Fee Disclosure Statement (FDS) has been removed, and a single consent form now covers both the renewal of your advice arrangement and authorisation for fees to be deducted from your account. This form must include specific details such as the services provided, fee amounts, account information, and your reference date. We started using these changes in May 2025. We have just been notified that the OFAs used since May don’t meet the requirements set by ASIC. The Financial Advice Association Australia (FAAA) and ASIC have acknowledged that this is a widespread problem across the advice industry. As a result, we’ll be reaching out to affected clients to update and reissue their OFAs to ensure full compliance. ASIC has provided temporary relief for some of these issues, but we’re taking proactive steps to ensure everything is correct and transparent. If you receive a request from us to review or re-sign your arrangement, please know it’s part of our commitment to keeping your financial advice aligned with the latest regulations. Please note the fees haven’t changed. |
| Financial Planning Snippets PLEASE BE VIGILANT regarding financial scamming. If anyone is requesting financial information from you (via phone, email, text, or social media), please contact us first or ask them for their ABN. Super Guarantee (SGC) for employees increases to 12% from 1/7/25. Concessional super contributions maximum of $30k Commonwealth Seniors Health Care card has seen the income limit increase to $158,440 (couple) $99,025 (single). If you are of Age Pension age and don’t have the card, please let us know. |
| Age Pension Deeming rates change. The deeming rate for Aged pension calculations will change from 20 September. Financial assets are deemed to earn a specific rate of income when being assessed for Aged Pension. For a single, the first $64,200 and for a couple, the first $106,2000 is deemed to earn 0.25%. This is being increased to 0.75%. The assets above these are amounts are deemed to earn 2.25%. This will be increased from 2.75%. For the vast majority of people on Aged Pension it will have litle or no impact. If you have any questions, please let us know. |
| Other Stories Macquarie reduced interest rates after the RBA cut. CMA 2%, Accelerator 3.9%. – The US Court ruled on Google’s antitrust case, saying Google doesn’t have to be broken up. This saw Google up 7% and Apple 3% after the US market closed. |
| Broker Target Price Changes Target Prices should be viewed as a compass (the general direction) rather than a GPS destination. Ord Minnett Computershare (CPU) increased from $42 (highest broker) to $43.60 (still highest broker) Lend Lease (LLC) increased from $5.85 (lowest broker) to $5.90 (equal lowest broker) Orora (ORA) decreased from $2.30 to $2.20 Sonic Health (SHL) decreased from $26.50 to $24.50 (lowest broker) Morgans Telstra (TLS) increased from $4.70 (lowest broker) to $4.80 Morgan Stanley BHP increased from $43.50 to $46.50 (highest broker) Goodman Group (GMG) increased from $40.57 (highest broker) to $41.50 (still highest broker) Rio Tinto (RIO) increased from $118 to $121 (equal highest broker) Seek.com (SEK) increased from $30 to $32.50 Macquarie Westpac (WBC) increased from $27.50 to $30 Bell Potter/Citigroup UBS WBC increased from $36 (highest broker) to $38 (still highest broker) Tracking changes for 2025 Upgrades 271 Downgrades 230 |
| Core Watchlist Index (changes since last Not So) The CORE Watchlist is a collection of 30 Australian shares, predominantly “Blue Chip”. We obtain research from up to 6 brokers on each share. Each broker provides a Target Price (value in 12 months) which then provides us with an average for each stock. We then compare that average to the current price as a percentage. IE Macquarie price $176.95 Av. Target Price $205.96= 85.9% (meaning 14.1% upside over next 12 months) + income 4.35% (including franking). To get the CORE Index we take the average across the 30 stocks. This provides us with a market average as there are up to 80 teams of analysts providing the research and target prices. The CORE Watchlist stocks represent more than 55% of the ASX 200 and so provide us with a good indicator of the market value. When it’s at 100% then the market is fully priced. We have seen that when the index is below 90%, then it’s good buying, but that doesn’t happen very often. Should you have any questions, please let me know. The Core index decreased from 98.20% to 96.27%. If we removed the 4 banks, the index falls to 92% Overall Earnings Per Share (EPS) FY25 increased from 1.20% to 2.21% FY26 decreased from 7.93% to 6.17% (new low) Most expensive – CBA 143.2% (176.5% highest ever). Least expensive – CSL 71.3%. The CORE Watchlist has 6 (9) stocks trading above 100%; they are; ANZ CBA JBH NAB WBC WES lowest number ever is 0, highest is 15. While 7 (4) is trading below 85% (the highest is 18, and the lowest is one). AMC CSL LLC NXT S32 SEK SHL (Figures in brackets are last Not So). STOCKS TRADING BELOW ALL BROKER FORECASTS ARE AS FOLLOWS; (it has been a handy indicator in the past). 12 out of the 30 CORE stocks are trading below the lowest broker target price. Highest 24. Lowest is 2. ALL current price $69.04 Broker range $70 to $76 AMC current price $12.78 Broker range $14.20 to $18.25 CSL current price $206.62 Broker range $258 to $300 GMG current price $32.26 Broker range $32.50 to 41.50 LLC current price $5.43 Broker range $5.90 to $7.12 NXT current price $16.48 Broker range $18.00 to $22.10 RMD current price $41.60 Broker range $47.86 to $49 S32 current price $2.63 Broker range $2.70 to $3.95 SEK current price $26.61 Broker range $30 to $32.50 SHL current price $22.74 Broker range $24.50 to $29.40 STO current price $7.83 Broker range $8.50 to $8.88 WOW current price $27.15 Broker range $28.25 to $33 Added ALL SHL STO WOW Removed |
| Banking Index (changes since last Not So) Like the CORE Watchlist index, the Banking index is the four major banks’ average target price based on research from up to 6 brokers. The percentage below 100% is the potential upside over the next 12 months (not including income). If at or over 100%, then this indicates the Banks are fully priced. The banking index decreased from 127.1% to 123.2%. Based on today’s bank prices, the table below shows the estimated dividends (c) and yield. PLUS FRANKING. FY 25 % FY 26 % FY 27 % ANZ 164.00 5.01% 162.00 4.95% 162.2 4.95% CBA 485.40 2.95% 501.40 2.95% 518.2 3.15% NAB 170.00 4.05% 171.20 4.08% 167.8 4.00% WBC 152.00 4.09% 155.20 4.18% 151.6 4.08% MQG 650.00 2.92% 739.50 3.32% 801.25 3.60% CBA yield is below all the others. Dividend expectations for BHP and RIO. The forecasts below are for the full year. Plus franking. Please note RIO is Calendar Year (CY). Cents per share (CPS). FY 25 % FY 26 % FY 27 % BHP 171.00 4.07% 170.20 4.06% 176.60 4.21% RIO 541.40 4.77% 541.40 4.77% 566.20 4.99% |
| Other Indicators (changes since last Not So) US VIX (Fear) Index increased from 15.36 to 17.17. Inside the normal range. Normal is 10-17. Iron Ore decreased from $103.40 to $102.45. The average expectation for 2025 is $98.3. Copper increased from $4.54 to $4.56. It reached an all-time high of $5.8955 on July 8 . Gold increased from $3553 to $3595. New ATH $3616.90 occurred today. AUD/USD decreased from 65.42c to 65.10c. Asian markets – MIXED US 10-year Bonds increased from 4.23% to 4.29%. 2-year rate 3.66%. 30 year rate below 5% at 4.99%. German 10 year Bonds increased from 2.73% to 2.78%. Japanese 10 year Bonds increased from 1.62% to 1.63% . Highest for 16 years was 1.632%. 30-year Bond hit an ATH of 3.25% Aussie Bonds 10 year Bonds increased from 4.33% to 4.42%. Recent high 4.95%. Oil prices increased from $63.73 to $65.36. Increased on increased Iranian sanctions The price of tungsten in China increased from $503mtu to $513mtu. The European price range remained at $495mtu-$545mtu. Prices are nearing an all-time high. |
| This week & next week Last, “Not So” opened in 7 Aust states (excl NT), 5 US states (California, Massachusetts, Delaware, Virginia & South Carolina), Bulgaria, Sweden and a new country visited by a Not So reader. Country 51 Portugal (Lisbon). This week – In Office Next week – In Office except Sept 11. PO BOX 149 Deniliquin NSW 2710 125 End St, Deniliquin, NSW 2710 Ph. 03 58950100 Fax 03 58950101 Mobile 0412113524 scottm@provincialwealth.com.au kevinh@provincialwealth.com.au chrisp@provincialwealth.com.au maddyl@provincialwealth.com.au karaw@provincialwealth.com.au |
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| On Wednesday, July 16, 2025, the ASX fell 69 points to finish at 8562. This is after the ASX 200 hit a new ALL-TIME CLOSING HIGH (ATH) of 8630.3 yesterday, which was just shy of the ATH intraday of 8639.10. The US markets saw new ATHs from the S&P 500 and NASDAQ overnight, with NVIDIA driving most of the gains. With an increase of 4% to a new high, the company was valued at US$4.16 trillion after CEO Jensen Huang visited the White House and gained approval to sell semiconductors (computer chips) to China. However, there were broader concerns from the US inflation figures, which gave a slight uptick from the tariffs. US banks started the US quarterly reporting season last night with mixed results, which might set the tone of the upcoming reporting season in the US and Australia, as the results may be inconsistent within sectors. We are now entering the profit confession season, where companies are signing off on their June 30 results, and they have to make sure the market is informed. Earlier this week, China announced its exports had increased 5.8% in June after allowing for a 16.1% drop in exports to the US. In short, China is still growing, as shown by its GDP result yesterday, which increased 5.2%, and it is looking for other trade opportunities. Just to let you know, as noted in the UBS note below, the US only represents 16% of global trade. We previously mentioned that China kept its powder dry to wait for Trump’s trade deal. This is causing growing global confidence that China could withstand a trade war with the US. This might also explain why iron ore has rebounded from near $90 to near $100. The bond markets are still reasonably calm, but did increase after the inflation numbers last night. We will likely see more volatility in the coming weeks. For the first time this year, the brokers have decreased the target prices for the CORE Watchlist (30 stocks) more than increased. We are happy for you to share our Not So Daily Bulletin with family and friends, and if we can help them, we are also happy to chat. |
| US Inflation US inflation released last night was slightly higher at 2.9% headline and 2.7% core. The markets have been expecting some inflation impact from the tariffs, which has also kept US Federal Reserve chair J. Powell from cutting rates. The results were OK, but could be read in many different ways. It shows that the tariffs haven’t had an impact on inflation over the last couple of months. The goods (green) inflation hasn’t been seen with a slight uptick in this month’s figures, but the inflation figure increased rather than continued the recent downtrend. This suggests a couple of things. 1) The exporters are absorbing tariffs. 2) The US supply chain businesses are absorbing the tariffs. 3) Retailers are selling pre-tariff goods from inventories and haven’t started passing on the higher prices yet to the consumers. Most economists suggest it will take 3 to 6 months for the tariffs to impact prices as goods work their way through the supply chain. The other observation from the inflation chart below is that services inflation (blue) has stalled at 2%. Tonight, the US releases the PPI (producer price index). This may give further signals about where the tariffs are impacting the supply chain. |
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| Global Equities UBS research summarised UBS expect consolidation near term in equities (until mid-September). Concerns being: i) UBS Risk Appetite is just above neutral. ii) Earnings downgrades are likely, UBS has EPS growth of 7% in ’25E. as US GDP growth slows from 1.8% YoY in Q2 to 0.9% YoY in Q4. iii) The US Fed doesn’t restart a cutting cycle until September 17th. Hence, weak economic data will likely be taken as bad news. iv) August and September are the worst two months of the year. UBS would be surprised if the consolidation phase brought more than 5% downside. UBS would buy into this and raise the year-end forecast to 960 MSCI World AC = c4% upside (from 940 MSCI AC World) and introduce a year-end target of 1000 MSCI World for end-2026 = 8% upside. What is supportive, outside of a tariff discussion? i) fiscal and monetary policy easing outside the US has resulted in a downgrade to global GDP of just 10bp since April 1st for 2025 and 2026, when taken together. ii) US wage growth is very well behaved. This not only helps profit margins but, more importantly, market expectations for inflation, allows the Fed to cut by 1% by year-end starting in September iii) some exceptionalism in the P/E is normal at this stage of the cycle. If the relationship between credit spreads and P/E stays in its post-’22 range, then the ‘fair value’ P/E is c23x (using 12-month forward) = c6,600 S&P 500. Perceived productivity improvements from Gen AI only add to this: iv) historically, if markets just avoid a bear market (as was the case in mid-April), then 1 year later they are up an average of 34%, cf to 25% so far. From here UBS are reasonably relaxed about the impact of tariffs because: i) as above, the policy response is offsetting much of the hit to global GDP; ii) the fiscal boost from the ‘BBB’ adds c0.45% to GDP over the next 6 quarters and offsets about around half the US GDP hit from tariffs – the CBO estimates that the revenue raised from tariffs covers 85% of the cost of the BBB; iii) the US is only 16% of global trade; iv) Some other regions are reducing trade barriers with each other. We think that there are good logical reasons to expect no major hike in tariffs from here. UBS up the probability of a Bubble scenario to 25% for end-2026 and acknowledge a risk that this is too low. UBS has 6 out of 7 preconditions for a bubble. The only major one missing is benign monetary conditions, but if UBS forecasts for the Fed are borne out, then UBS get all 7. Into bubbles, historically 30-43% of market cap has traded up to a P/E of 45x -72x on a 10-year bond yield of 5.5% to 6.4%. We are far removed from this with the Mag 6 (excl Tesla) on a P/E of 33.5x 12-month trailing. Into a bubble,MSCI AC World rises by c20%, at least. The ‘justification’ for a bubble would be either Gen AI being perceived to increase productivity by 2% from 2028 (which gives c 20% upside by end-’26 in the Equity Risk Premium model) or corporate balances being less risky than normal against government balance sheets. |
| Australian Banks Macquarie research updated Bank research. Offshore investors have taken over from Super in buying banks: Over the last 6-months the primary source of net-buying of banks has shifted from domestic institutions (largely superannuation funds) to offshore investors. Macquarie thinks this reflects a few factors including: (1) super funds already implementing bank ‘overlays’ to manage underweights, (2) super allocations to Australian equities peaking in Sep-24, (3) offshore investors looking for tariff safe-havens and betting on a weaker USD. Looking forward Macquarie see several key risks to these positioning trends which have supported banks including; (1) super funds turning negative on the bank sector, (2) a return of unlisted activity and increased preference for offshore investments seeing allocation to Australian equities fall, (3) US regulatory easing unlocking billions in capital returns, seeing global financial investors fund US bank buying with Australian banks, where capital returns have already played out. This combined with downside risk to FY25E/FY26E earnings should drive banks underperform. • Following the flows: Bank share registry data suggests offshore and domestic investors remain buyers of the banks in the Jun-25 quarter. With international institutions buying ~$2.7bn of bank shares, the highest since Mar-20, while domestic institutions bought ~$700m. International institutions largely bought CBA (~$2.2bn), while Domestic institutions bought NAB (~$600m) and WBC (~$300m). . • Macquarie proprietary flows data: Our proprietary data supports this with offshore investors continuing to buy financials since March, with strong flows into CBA and NAB in particularly. • US ADR volumes at record high: May saw record traded volume (and value) in US listed ADRs of ANZ, CBA and NAB, with a combined A$1.5bn traded. This saw ADR volumes a record 7-9% share of ASX volumes. While difficult to confirm, we think much of this flow was driven by currency views aiming to take advantage of a depreciating US Dollar and end of ‘American Exceptionalism’. • Who else has been buying? Retail investors continued to be net sellers of banks in the June quarter, with selling activity in CBA, NAB and WBC, but buying of ANZ. Domestic investors remain overweight NAB, and increased their positions for the first time since Jun-24, they remain neutral WBC. International investors remain underweight CBA, but their underweight position is now at a record low. Short interest decreased across all banks, except BEN and JDO, with CBA’s short interest now broadly in-line with major bank peers |
| Resources Morgans research updated on resources BHP We have a BUY recommendation on BHP, with a A$43.90 target price (SOTP DCF). The group pairs sector-leading balance sheet strength with exposure to copper and potash growth that is not fully captured in consensus numbers. A 5%+ forward dividend yield, underpinned by robust earnings strength, supports total shareholder return. That said, softer near-term iron ore pricing and a healthy valuation cap immediate upside, so we favour building positions on market pullbacks. Longer term, sustained free cash flow, rising copper output and further potash expansion should unlock further value. Key risk to our call is primarily global/regional macro driven (metal prices), and secondly execution on potash and copper growth. Rio Tinto RIO is under a HOLD recommendation, with a A$109ps target price (SOTP DCF). The miner’s strong balance sheet and diversified earnings base support an abovemarket forward dividend yield that we see as underpinned for the next 12 months. However, Pilbara execution risks around volumes, PB fines quality and unit costs, plus geopolitical overhangs in Mongolia, Guinea and Canada, weigh on near-term sentiment. In addition, non-growth capex looks to have peaked at a high watermark, yet its elevated run-rate threatens medium-term free cash flow and dividend capacity, particularly as RIO ramps up investment in lithium. With a share price near fair value we await clearer operational delivery before turning more constructive. Key risk to our call remains sensitive to execution performance on critical mine replacement projects in the Pilbara; political/country risk in Mongolia, Guinea and Canada (US tariffs); and global macro growth risk (metal demand drivers). South 32 We have S32 on a BUY, with a A$4.10 target price (DCF SOTP). The company offers true commodity diversity, with a high weighting to base metals, without the iron ore cyclicality that dominates its larger diversified mining peers. S32 trades at a clear discount to NAV and historical EV/EBITDA multiples, presenting compelling value upside. While near-term catalysts are thin, and next month’s Mozal impairment could weigh on sentiment, we see this as an incremental negative rather than thesis-changing. We expect patient investors will be paid to wait via a sturdy balance sheet and sustainable dividends. Key risks to our call are global/regional growth (base metal demand drivers), and execution on Hermosa project developments. Woodside We have WDS on a BUY recommendation. Operational discipline continues to shine, with unit costs consistently beating guidance and peers in recent periods, underpinning a robust 6-7% forward dividend yield. The planned partial selldown of Louisiana LNG in 2H25 should crystallise value, further delever the balance sheet and fund organic growth, providing a clear near-term catalyst path. Trading on a healthy discount to smaller-peer STO in P/NAV and EV/EBITDAX, the stock offers compelling upside to our A$31.00 target price (SOTP DCF). While oil price volatility remains a risk, WDS’s tier-one assets and proven capital discipline leave us high-conviction buyers. Key risks to our call are execution risk on LALNG development, Scarborough construction and oil/LNG market outlook. |
| Lend Lease (LLC) Citigroup note today summarised We note the announcement from LLC this morning around the win of a >A$2.5bn gross end value development project at 175 Liverpool Street in Sydney. LLC plans to build 300 luxury apartments and 2,000sqm of retail space. We have previously highlighted new project wins as catalysts for LLC, and therefore see today’s announcement as a positive, as it helps provide visibility for future development earnings. The project is targeted to start in FY27 and complete in CY30, and LLC expects to announce a 50% selldown in the coming weeks to a capital partner. Below, we also highlight a range of other projects that LLC is working on that could possibly provide future earnings visibility, and a win of any of these could be a potential catalyst, in our view. We retain Buy on LLC. Based on our research of various articles, we highlight a range of potential future projects that could contribute to LLC’s development pipeline and earnings into the future. • Hunter Street Overstation development – LLC, MGR and Justin Hemmes backed a hospitality group (Merivale), which have formed the Metropolis consortium together, are close to winning the project as one of the rival bidders, Brookfield, has pulled itself out of the process. • Athletes Village development – LLC’s Brisbane Showgrounds had been announced as the location for the 2032 Brisbane Olympics Athletes Village, which is expected to accommodate more than 10,000 athletes, and will become residential post the Olympics. • Blackwattle Bay development – LLC and 2 competitors were shortlisted last year for the Blackwattle Bay redevelopment in Sydney, which is expected to have 1,100 homes. • Arden Central Precinct in Victoria – LLC and 3 competitors have been shortlisted by Development Victoria in a multi-stage process to select a development partner for the Arden Central precinct. |
| Exchange Traded Funds (ETF) ETFs are a collection of investments. They usually pay an income payment either half-yearly or yearly. Today, most ETFs trade ex-dividend, which means they trade without the expected dividend, which is paid later in the month. Payment dates are as follows; Blackrock I Shares 11 July 2025 Betashares 16 July 2025 Global X 16 July 2025 Vanguard 16 July 2025 Fidelity 18 July 2025 Magellan 21 July 2025 Van Eck 25 July 2025 The distribution can vary each year (more than a dividend from shares) as it can include any realised capital gain sold within the ETF over the period. This year, we are seeing some ETFs pay a higher-than-normal distribution. These include; IAA (Asia) distribution yield is 4.1%. RBTZ (Global Robotics) distribution yield is 4.01% SEMI (Global Semiconductors) distribution yield is 7.09%. |
| Financial Planning Snippets PLEASE BE VIGILANT regarding financial scamming. If anyone is requesting financial information from you (via phone, email, text, or social media), please contact us first or ask them for their ABN. Super Guarantee (SGC) for employees increases to 12% from 1/7/25 Concessional super contributions maximum of $30k Commonwealth Seniors Health Care card has seen the income limit increase to $158,440 (couple) $99,025 (single). If you are of Age Pension age and don’t have the card, please let us know. |
| Other Stories RBA are recommending the removal of surcharge fees, which will be a good saving; however, it might remove the benefits from the reward points programs. Therefore may be better to use your points (if you have them) sooner rather than later. |
| Broker Target Price changes Target Prices should be viewed as a compass (the general direction) rather than a GPS destination. Ord Minnett South 32 (S32) decreased from $4.10 to $3.90 Morgans BHP increased from $43.70 (highest broker) to $43.90 (still highest broker) Santos (STO) decreased from $6.90 (lowest broker) to $6.80 (still lowest broker) S32 decreased from $4.30 (highest broker) to $4.10 (still highest broker) Telstra (TLS) increased from $4 (lowest broker) to $4.70 Woodside (WDS) increased from $30.10 (highest broker) to $31 (still highest broker) Morgan Stanley Computershare (CPU) decreased from $34.60 (lowest broker) to $33.70 (still lowest broker) Macquarie Goodman Group (GMG) decreased from $36.06 to $35.24 Lend Lease (LLC) decreased from $7.79 (highest broker) to $7.23 (still highest broker) S32 decreased from $3.60 to $3.40 Orora (ORA) decreased from $2.39 to $2.36 Bell Potter/Citigroup NextDC (NXT) decreased from $18.70 to $18.35 UBS Tracking changes for 2025 Upgrades 168 Downgrades 170 |
| Core Watchlist Index (changes since last Not So) The CORE Watchlist is a collection of 30 Australian shares, predominantly “Blue Chip”. We obtain research from up to 6 brokers on each share. Each broker provides a Target Price (value in 12 months) which then provides us with an average for each stock. We then compare that average to the current price as a percentage. IE Macquarie price $176.95 Av. Target Price $205.96= 85.9% (meaning 14.1% upside over next 12 months) + income 4.35% (including franking). To get the CORE Index we take the average across the 30 stocks. This provides us with a market average as there are up to 80 teams of analysts providing the research and target prices. The CORE Watchlist stocks represent more than 55% of the ASX 200 and so provide us with a good indicator of the market value. When it’s at 100% then the market is fully priced. We have seen that when the index is below 90%, then it’s good buying, but that doesn’t happen very often. Should you have any questions, please let me know. The Core index decreased from 98.41% to 97.78%. If we removed the 4 banks, the index falls to 93.37% Overall Earnings Per Share (EPS) FY25 decreased from 1.13% to 1.06% new low of 0.85% last week. FY26 increased from 8.17% to 8.19% Most expensive – CBA 162.5% (176.5% highest ever). Least expensive – NextDC (NXT) 71.9% The CORE Watchlist has 10 (10) stocks trading above 100%; they are; ANZ BXB CBA CPU JBH MQG NAB TLS WBC WES, lowest number ever is 0, highest is 14. While 7 (5) is trading below 85% (the highest is 18, and the lowest is one). AMC CSL LLC NXT RMD S32 SEK (Figures in brackets are last Not So). STOCKS TRADING BELOW ALL BROKER FORECASTS ARE AS FOLLOWS; (it has been a handy indicator in the past). 10 out of the 30 CORE stocks are trading below the lowest broker target price. Highest 24. Lowest is 2. ALL current price $66.60 Broker range $70 to $76 AMC current price $14.48 Broker range $14.50 to $20.31 BHP current price $39.11 Broker range $39.50 to $48.70 COL current price $20.39 Broker range $20.95 to 23.50 CSL current price $247.45 Broker range $310 to $360.30 LLC current price $5.09 Broker range $5.85 to $7.79 NXT current price $14.08 Broker range $18.00 to $21.20 RMD current price $38.90 Broker range $44.07 to $48 SEK current price $24.00 Broker range $25.80 to $30.10 WOW current price $31.11 Broker range $31.80 to $36 Added AMC COL RMD Removed ORI |
| Banking Index (changes since last Not So) Like the CORE Watchlist index, the Banking index is the four major banks’ average target price based on research from up to 6 brokers. The percentage below 100% is the potential upside over the next 12 months (not including income). If at or over 100%, then this indicates the Banks are fully priced. The banking index increased from 127.8% to 128.8%. Based on today’s bank prices, the table below shows the estimated dividends (c) and yield. PLUS FRANKING. FY 25 % FY 26 % FY27 % ANZ 164.00 5.44% 162.00 5.38% 162.2 5.39% CBA 484.20 2.73% 499.60 2.73% 515.4 2.90% NAB 170.00 4.44% 170.20 4.45% 165.4 4.32% WBC 152.00 4.56% 155.20 4.66% 148.6 4.46% MQG 650.00 2.92% 739.50 3.32% 801.25 3.60% CBA yield is below all the others. Dividend expectations for BHP and RIO. The forecasts below are for the full year. Plus franking. Please note RIO is Calendar Year (CY). Cents per share (CPS). FY25 % FY26 % FY27 % BHP 153.83 3.93% 155.50 3.98% 167.00 4.27% RIO 581.17 5.26% 582.83 5.27% 606.17 5.48% |
| Other Indicators (changes since last Not So) US VIX (Fear) Index increased from 16.17 to 17.59. Just above normal levels. Normal is 10-17. Iron Ore increased from $95.85 to $98.95. The average expectation for 2025 is $99.1. Copper decreased from $5.64 to $5.52. New ALL TIME HIGH of $5.8955 on July 8, blowing past the previous high of $5.26. The 50% Copper tariffs were the cause Gold increased from $3335 to $3344. ATH $3509.90. AUD/USD decreased from 65.58c to 65.26c. Asian markets – MIXED. US 10-year Bonds increased from 4.35% to 4.48%. 2-year rate 3.95%. 30 year rate back above 5% at 5.02%. German 10 year Bonds increased from 2.63% to 2.72%. Japanese 10 year Bonds increased from 1.50% to 1.57%. Highest for 16 years was 1.59%. Aussie Bonds 10 year Bonds increased from 4.29% to 4.41%. Recent high 4.95%. Oil prices decreased from $68.46 to $66.74. Tungsten—China price remained at $433mtu. The European price range increased from $440-$485 to $450-$485mtu (highest price for 12 years). |
| This week & next week Last, “Not So” opened in 7 Aust states (excl Tas), 6 US states (California, Massachusetts, New Jersey Colorado, South Carolina, Virginia), Bulgaria, Sweden, NZ, India, Chile and Israel. This week – In Office – July reviews Next week – In Office- July reviews (except Friday) PO BOX 149 Deniliquin NSW 2710 125 End St Deniliquin NSW 2710 Ph. 03 58950100 Fax 03 58950101 Mobile 0412113524 scottm@provincialwealth.com.au kevinh@provincialwealth.com.au chrisp@provincialwealth.com.au maddyl@provincialwealth.com.au |
| Top Stories |
| On Monday, June 30, 2025, the ASX gained 28 points to finish at 8542. The market was positive after the US S&P500 hit a new ALL-TIME HIGH on Friday, even though tariff talks are about to take centre stage alongside the One Big Beautiful Bill, which passed the Senate 51-49 over the weekend. Today, the ASX gains were towards recent laggards CSL, up 2.2%, MQG, up 3.9%, and NXT, up 2.2%. There may have been some switching out of CBA, which was down at $184.75, down from its ATH of $192 set last week. The Coppo report says July is usually quiet but we will see with the tariffs coming back. The ASX finished the year up 10% which was a good result considering the headwinds. Most ETF’s trade ex-dividend tomorrow with the dividends paid in July. This is an interesting story about driverless ride-sharing technology. It’s coming in the next few years. Compared to human drivers, the accident rate is down 78% (I’m not sure I’m game just yet). The bond markets are still reasonably calm, so there are no concerns about the potentially rising US debt. We will likely see more volatility in the coming weeks. We are happy for you to share our Not So Daily Bulletin with family and friends, and if we can help them, we are also happy to chat. |
| July tends to be quiet According to the Bell Potter Coppo report, Richard Copplestone made the following observations about the market in July. 1. It’s a 4 day week in US as Friday US markets are closed for their 4th July “Independence Day” national holiday 2. End of Financial year today – so rest of this week & all next week – instos will be squirrelled away from the market preparing their end of EOFY reports as to why they outperformed (due to excellent understanding of the mkt by themselves) or why they underperformed (due to “external shocks – like Trump’ unpredictability or the Tariff selloff or Iran (if they were long Oil/ oil stocks for that one). 3. Also many fund managers have jetted off on holidays, with schools breaking up for the next 3 weeks – so many will be away for much of July. 4. Then as they get back from holidays, those who worked in the first half of July, then take their holidays over the 2nd half of July. 5. It’s US & European summer – so they are all off on their summer breaks (like we do in “our summer holidays” in December & January) as well – that lowers trading volumes across the globe. 6. No Transition Portfolios are seen in early July – if they were going to do one – it’d be done in June. 7. I said to this guy over the last 30 years the one time I particularly dislike to be at work – is in the first 3 weeks of July – as everyone is way, trading is crap & it’s usually quite boring. 8. BUT we do tend to see profit warnings come through from companies that have just seen their end of June 30 numbers & need to advise – that adds to some volatile moves. 9. Also with reporting season starting in August – we tend to start seeing a number of stocks that are expected top, do well – or poorly – start to move up or down as buyers or shortener’s start to get their trading positions set. 10. So often as we see a number of stocks report – they may have already moved say 10% before their result & if it’s a good result they’ll add +10% more & if it’s a shocker they’ll drop -15% to -20% or even more if it’s a real shocker. 11. So July tends to thin, strong but overall quiet boring, but a lot of stocks do start to move from 21st July on– thin trading sees large moves in many stocks in the last few weeks of July.. |
| Aussie Equity strategy Morgans updated their Aussie equity view. The Australian economy continues to defy expectations of a sharper slowdown. A resilient labour market and better-than-feared retail spending are helping to support the earnings outlook for listed companies. However high prices at the large end of the market (ASX 20) may limit large cap returns. As such, we think the potential broadening-out of performance to mid-small caps provides a better risk/reward balance for returns. Equity sector preferences: Absent a sustained rebound in commodity prices given the ongoing disruption in global trade, above-average earnings growth will be difficult to achieve in a slower economy. Accordingly, we prefer a targeted portfolio approach, tilting what we believe are the best relative opportunities and the best risk/return profile. We prefer tilting exposure toward mid/small caps and quality cyclicals while monitoring/ reducing exposure to those caught in the expensive flight-to-defensive sectors (banks, staples, telcos). Review and re-balance: Defensive, and domestic facing segments broadly continue to outperform growth amid the increasingly uncertain geopolitical and macro-economic environments triggered by overseas events including a volatile policy agenda from the White House. There appears to be little room for error in stretched equity valuations. Equity risk appetite looks set for a bumpy end to 2025, requiring investors to review and re-balance portfolios more frequently. Sector ratings: Morgans sector analysts have moved to Neutral ratings on both the Telco (upgraded from Underweight) and Consumer Staples sectors (downgraded from Overweight). |
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| Core & ETF June 2025 review As always, performances were mixed throughout the month. The ASX gained 1.27% for the month, the calendar year ASX was up 4.7% (6 months), and the financial year ASX was up 9.96% (12 months). CORE Watchlist 30 ASX-listed stocks from our CORE Watchlist. The best performers for the month were Santos (STO), which was up 16.2% after receiving a takeover offer from Abu Dhabi energy company. NextDC (NXT) is up 10.6% after a rebound in the demand for data centres, and Macquarie (MQG) is up 6.8% after a sell down in April. Other notable gainers for the month were Woodside (WDS) up 6.2% and CBA 5%. The worst performers for the month were Lend Lease (LLC) down 7.8%, after gaining 10% last month. Rio Tinto (RIO), down 4.9%, as iron ore was weaker and South 32 (S32) down 4.6%, due to commodity weakness. Over the calendar year (6 months), the best performers were the same as last month, Nine Entertainment (NEC), up 31.6% after Domain was sold (Nine is the majority owner), Brambles (BXB), up 21.7% on positive profit result and Telstra (TLS), up 20.7% after finally being recognised as having technology exposure. Other notable gainers for six months were CBA up 20.6%, JB Hi-Fi up 19.1% Wesfarmers (WES) up 18.5% and Computershare (CPU), up 17.5%, The worst performers were Orora (ORA), down 23.2%, as concerns about the French bottle acquisition and the impact of a trade war on the global liquor trade. CSL down 15% as healthcare out of favour. South 32 (S32) is down 14.4% as resources have struggled. Over the financial year (12 months), the best performers were JB Hi-Fi (JBH), up 80.3% as technology sales continue to deliver, Brambles (BXB), up 61.2% and Computershare (CPU), up 51.4% as share registry outlook improves. Other notable gainers for 12 months were CBA up 45%, Telstra (TLS) up 33.7%, ResMed (RMD) up 35.2%, Wesfarmers (WES) up 30%, Aristocrat Leisure (ALL) up 31%, Westpac (WBC) up 24.4% & Coles (COL) up 22%.4% The worst three were S32 down 20.5%, CSL down 18.9% and NXT down 17.8% after a selloff due to concerns about data centre demand, which has started to reverse. EXCHANGE-TRADED FUNDS (ETF) As part of our research, we cover approximately 80 ETFs. The best and worst performers for the period(s) were as follows. The best performers for the month are Korea (IKO), up 15.7%, as a change in political leader is a positive for the country and investors. Global Semiconductors (SEMI), up 6.7%, continued to rebound after a selloff due to data centre demand and trade issues regarding tariffs. The result would have been better but it went ex-dividend today 7% (giving a 13.7% gain for the month) and Asia (IAA) up 8.1% as the recovery in the Asian economies continues. Other notable gainer for the month was Emerging Markets (EMKT), up 5.7% The worst three were Global Property (RCAP), down 1.5% as US interest rate cuts have been delayed. Japan (IJP) down 0.7% on inflation, higher expected. Global Health (IXJ), down 0.3%, as concerns about Trump tariffs remain for pharmaceuticals and changes to US health policy from RFK Jr. The best for the calendar year (6 months) were IKO, up 32.6%, and Europe (IEU), up 16.8% due to expected stimulus and cheap valuations. Asia (IAA) up 14.2%. Other notable gainers China (IZZ) up 14.2% Global Cybersecurity (HACK) up 11.8%, EMKT up 11.4% & Global Value (VLUE) up 11.1% The worst performers were Global Biotech (CURE), down 12.4%, and Global Cloud Computing (CLDD), down 8.9%, after concerns about data centre demand. Global Health (IXJ) down 4% The best performers for the financial year (12 months) were IZZ, up 40.9%; Global Cybersecurity (HACK), up 34.6% due to the growing need to protect data; and IAA, up 24%. Other notable gainers for the 12 months, Global AI (GXAI) up 21.8% China New Economy (CNEW) up 20.7%, Australian Property (MVA) up 19.3% Europe (IEU) up 18.3%, Global Value (VLUE) up 18.6%, EMKT up 16.9%. The worst performers were CURE, which was down 9%, IXJ, which was down 5.7%, and Australian Resources (MVR), which was down 2.6%. |
| A significant technology change – driverless ride sharing. Last week, with great fanfare, Tesla launched its ride-sharing taxis in Austin, Texas. However, another company, Waymo (owned by Alphabet—Google’s parent company), has been delivering ride-sharing technology over the last year. To date, Waymo has driven 7 million autonomous miles and is conducting 200,000 paid trips per week, while Telsa has accumulated 50,000 miles between its Texas and California factories. I asked Microsoft’s Co-pilot to provide the advantages and disadvantages of each Waymo Waymo is a subsidiary of Alphabet Inc. (Google’s parent company) and focuses on developing autonomous driving technology. Waymo’s self-driving cars, known as Waymo One, are used for ride-hailing services in several U.S. cities. They utilise advanced sensors, machine learning, and artificial intelligence to navigate roads without human intervention. Advantages: Safety: Waymo’s autonomous vehicles are designed to reduce human error, which is a major cause of accidents (see chart below). Cost Efficiency: Operating costs are lower compared to traditional ride-hailing services since there are no driver salaries Environmental Benefits: Waymo’s fleet includes electric vehicles, contributing to reduced emissions. Technological Innovation: Waymo continuously improves its sensor suite and driving algorithms. Disadvantages: Regulatory Challenges: There is still significant pushback and concern over regulation, as no federal law oversees self-driving cars. Weather Limitations: Waymo’s technology can struggle in adverse weather conditions like heavy snow. High Initial Investment: Developing and deploying autonomous vehicles requires substantial capital. Tesla Tesla is an American electric vehicle (EV) manufacturer founded by Elon Musk. Tesla is known for its innovative electric cars, energy products, and advanced driver-assistance systems like Autopilot and Full Self-Driving (FSD). Advantages: Performance: Tesla vehicles offer impressive acceleration, handling, and overall performance. Autopilot and FSD: Tesla’s advanced driver-assistance features are continually improving and moving closer to full autonomy. Supercharger Network: Tesla has established a global network of fast-charging stations, making long-distance travel more convenient. Environmental Benefits: Tesla’s commitment to sustainable energy helps reduce greenhouse gas emissions. Innovation: Tesla is known for its continuous introduction of new features and products. Disadvantages: High Initial Cost: Tesla vehicles can be relatively expensive compared to traditional gasoline-powered cars. Quality Control Issues: Some owners have reported issues related to build quality and reliability. Dependence on Software Updates: Frequent software updates can change vehicle functionality and performance over time. Charging Infrastructure: While Tesla’s Supercharger network is extensive, it is limited to Tesla vehicles. Both Waymo and Tesla are pioneering the future of transportation, each with its unique strengths and challenges. Morgan Stanley (MS) provided an update on Waymo’s safety LA Safety Data Indicate Waymo’s Safety Advantage vs. Humans Scaling to New Cities. Waymo is now including LA data in its comparison of accident rates relative to human drivers, and the data suggests Waymo still maintains a healthy safety advantage vs. human drivers, with ~79% fewer airbag deployment crashes and 78% fewer injury-causing crashes. This safety advantage has largely remained stable vs. historical data releases which only included SF and Phoenix ( Exhibit 2 ). MS thinks this speaks to the ability of Waymo to generalize in new regions without sacrificing safety. We have written about Waymo’s work to build a generalizable and scalable self-driving system (see here). It will be important to track how Waymo’s safety performance compares to other autonomous players as they begin to ramp up their operations. |
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| Financial Planning Snippets PLEASE BE VIGILANT regarding financial scamming. If anyone is requesting financial information from you (via phone, email, text, or social media), please contact us first or ask them for their ABN. Super Guarantee (SGC) for employees increases to 12% from 1/7/25 Concessional super contributions maximum of $30k Commonwealth Seniors Health Care card has seen the income limit increase to $158,440 (couple) $99,025 (single). If you are of Age Pension age and don’t have the card, please let us know. |
| Other Stories – Nine Entertainment (NEC) via Stan has bought the local rights to English Premiership League (EPL) – soccer. |
| Broker Target Price changes Target Prices should be viewed as a compass (the general direction) rather than a GPS destination. Ord Minnett Morgans Morgan Stanley Macquarie BHP decreased from $42 to $40 Rio Tinto (RIO) decreased from $115 to $105 (lowest broker) South 32 (S32) decreased from $4.50 (highest broker) to $3.60 Bell Potter/Citigroup UBS Tracking changes for 2025 Upgrades 164 Downgrades 160 |
| Core Watchlist Index (changes since last Not So) The CORE Watchlist is a collection of 30 Australian shares, predominantly “Blue Chip”. We obtain research from up to 6 brokers on each share. Each broker provides a Target Price (value in 12 months) which then provides us with an average for each stock. We then compare that average to the current price as a percentage. IE Macquarie price $176.95 Av. Target Price $205.96= 85.9% (meaning 14.1% upside over next 12 months) + income 4.35% (including franking). To get the CORE Index we take the average across the 30 stocks. This provides us with a market average as there are up to 80 teams of analysts providing the research and target prices. The CORE Watchlist stocks represent more than 55% of the ASX 200 and so provide us with a good indicator of the market value. When it’s at 100% then the market is fully priced. We have seen that when the index is below 90%, then it’s good buying, but that doesn’t happen very often. Should you have any questions, please let me know. The Core index increased from 97.37% to 97.70%. If we removed the 4 banks, the index falls to 92.96% Overall Earnings Per Share (EPS) FY25 decreased from 0.96% to 0.92% new low. FY26 increased from 7.96% to 8.13% Most expensive – CBA 169.1% (176.5% highest ever) Least expensive – NextDC (NXT) & CSL at 73.8%. Both jumped 2% today. We might see a rally in both these in the new FY. The CORE Watchlist has 11 (11) stocks trading above 100%; they are; ANZ BXB CBA CPU JBH MQG NAB TCL TLS WBC WES, lowest number ever is 0, highest is 14. While 6 (7) is trading below 85% (the highest is 18, and the lowest is one). AMC CSL LLC NXT ORA ORI SEK (Figures in brackets are last Not So). STOCKS TRADING BELOW ALL BROKER FORECASTS ARE AS FOLLOWS; (it has been a handy indicator in the past). 11 out of the 30 CORE stocks are trading below the lowest broker target price. Highest 24. Lowest is 2. ALL current price $65.17 Broker range $70 to $76 BHP current price $36.75 Broker range $39.50 to $48.70 CSL current price $239.48 Broker range $310 to $360.30 LLC current price $5.38 Broker range $6.30 to $7.50 NEC current price $1.63 Broker range $1.65 to $2 NXT current price $14.50 Broker range $18.00 to $21.20 ORA current price $1.89 Broker range $2.03 to $2.50 ORI current price $19.49 Broker range $20.65 to $23 SEK current price $24.05 Broker range $25.80 to $30.10 S32 current price $2.91 Broker range $3.05 to $4.30 WOW current price $31.11 Broker range $31.80 to $36 Added Removed SHL |
| Banking Index (changes since last Not So) Like the CORE Watchlist index, the Banking index is the four major banks’ average target price based on research from up to 6 brokers. The percentage below 100% is the potential upside over the next 12 months (not including income). If at or over 100%, then this indicates the Banks are fully priced. The Banking index increased from 126.1% to 131.2% record high. CBA is still dominating. Based on today’s bank prices, the table below shows the estimated dividends (c) and yield. PLUS FRANKING. FY 24 % FY 25 % FY26 % ANZ 166.00 5.69% 164.00 5.62% 162 5.56% CBA 475.00 2.57% 484.20 2.62% 499.6 2.70% NAB 169.00 4.29% 170.00 4.32% 170.2 4.32% WBC 166.00 4.90% 152.00 4.49% 155.2 4.58% MQG 645.00 2.82% 650.00 2.84% 735.75 3.22% CBA yield is below all the others. Dividend expectations for BHP and RIO. The forecasts below are for the full year. Plus franking. Please note RIO is Calendar Year (CY). Cents per share (CPS). FY24 % FY25 % FY26 % BHP 219.00 5.96% 155.00 4.22% 160.17 4.36% RIO 615.00 5.90% 616.17 5.91% 615.17 5.90% |
| Other Indicators (changes since last Not So) US VIX (Fear) Index decreased from 17.48 to 16.32. Back below normal level for first time in many weeks. Not sure how long it will last with tariffs taking centre stage again. This time last year it was at 12.69. Normal is 10-17. Iron Ore increased from $92.85 $94.75. The average expectation for 2025 is $99.1. This time last year it was $106.90, a drop of 11.3% Copper increased from $4.91 to $5.08. ALL TIME HIGH of $5.26. This time last year it was $4.41. An increase of 15.1% Gold decreased from $3344 to $3303. ATH $3509.90. This time last year it was $2,337. An increase of 41.3% AUD/USD increased from 65c to 65.39c. This time last year it was $66.47c A decrease of 1.6%. Asian markets – UP. US 10-year Bonds decreased from 4.29% to 4.27%. This time last year it was 4.45%. A drop of 0.18%. 2-year rate 3.74%. 30 year rate was above 5% now 4.83%. German 10 year Bonds increased from 2.53% to 2.59%. This time last year it was the same. Japanese 10 year Bonds increased from 1.40% to 1.43%. Highest for 16 years was 1.59%. This time last year it was 1.10%. An increase of 0.33% Aussie Bonds 10 year Bonds increased from 4.12% to 4.17%. Recent high 4.95%. This time last year it was 4.43%. A decrease of 0.26% Oil prices decreased from $65.28 to $65.17. Ceasefire holding between Israel and Iran. This time last year it was $83.64 or a drop of 22% Tungsten—China price increased from $418mtu to $428mtu. The European price range increased from $437-$475mtu to $440-$485 (highest price for 12 years). This time last year, it was China $350 mtu and Europe $335-$360mtu mtu. The price has increased over the year by 22.2% in China and 33% in Europe. |
| This week & next week Last, “Not So” opened in 7 Aust states (excl Tas), 3 US states (California, Massachusetts & Colorado), Bulgaria, Sweden UK France, Israel and Italy This week – In Office – Starting new financial year. Next week – In Office- Starting new financial year. Contact Details PO BOX 149 Deniliquin NSW 2710 125 End St Deniliquin NSW 2710 Ph. 03 58950100 Fax 03 58950101 Mobile 0412113524 scottm@provincialwealth.com.au kevinh@provincialwealth.com.au chrisp@provincialwealth.com.au maddyl@provincialwealth.com.au |
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| On Wednesday, June 4, 2025, the ASX gained another 75 points to finish at 8542. This is the highest point since 14 February when the market hit an ALL-TIME CLOSING HIGH of 8556 and an INTRA-DAY HIGH of 8615.2. This occurred on a day when GDP was below expected at 0.2% for the quarter, and iron ore was well below $100. We maybe watching a melt-up (see below). CBA hit a new ALL-TIME HIGH of $181.39 and accounted for 14 points of the 75. It’s now worth $300bn and valued at more than all the German Banks. it has a forward PE of 29. It’s not the only stock running higher; Wesfarmers (WES) hit an ATH of $84.67. JB HiFi (JBH) hit ATH of $112.98 and Telstra hit a 8 year high of $4.89. Additionally, we are seeing the US technology stocks running as they have rebounded strongly after the April tariff sell-off. Last week, NVIDIA provided its quarterly profits, which saw revenue of $43bn up from $22bn a year earlier. This has seen NVIDIA, valued at $3.446 trillion and with a forward PE of 29.1, retake the world’s most valuable company title from Microsoft, valued at $3.441 trillion and with a forward PE of 32. The TACO trade (Trump Always Chickens Out) continues to dominate market sentiment. However, this afternoon, President Trump posted that President Xi of China was very tough and extremely hard to make a deal with. This may suggest the trade war is about to heat up, or the TACO might be right! The bond markets are still reasonably calm, so there are no concerns about the potentially rising US debt. The US tariff revenue for May was $23bn, which is well up from last year, but short of President Trump’s claims of them being paid $2bn to $3bn per day. We will likely see more volatility in the coming weeks. We are happy for you to share our Not So Daily Bulletin with family and friends, and if we can help them, we are also happy to chat. |
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| Are we watching a melt-up? The markets are nearing all-time highs, but the fundamental picture seems to be worsening. Today, our GDP was 0.2% for the quarter and 1.3% for the year. The OECD lowered its forecasts for global growth due to the tariffs and potential trade war, including lower estimates for the US, China, and Australia than it forecast at the end of the year. The broker research continues to downgrade profit expectations, with the CORE watchlist growth for FY25 down at a meagre 1.25% while PEs for the Watchlist are hitting new highs (usually not a good recipe). CBA is now worth more than $300bn (more than any Australian company ever) with a PE of 29.6, trading 67% above the broker targets, and dividends of 2.62% or 3.75% with franking. We have all heard of markets having melt-down, but there is an investment term call a melt-up. Maybe we are witnessing a rare melt up. I asked Co-pilot what a melt up was. In investment terms, a melt-up refers to a sudden and dramatic increase in the price of an asset or market, driven primarily by investor sentiment rather than fundamental improvements in the economy. This phenomenon often occurs when investors rush to buy assets out of fear of missing out on potential gains, leading to rapid and unsustainable price increases. Melt-ups can be triggered by factors such as low interest rates, excessive optimism, or a lack of better investment alternatives. While they can result in significant short-term gains, melt-ups are often followed by sharp declines or market corrections, as the inflated prices eventually revert to more realistic levels. Investors should be cautious during melt-ups, focusing on economic indicators and fundamentals to avoid getting caught in the subsequent downturn. |
| Technology and Nuclear Energy Overnight, Meta (Facebook) signed a new nuclear energy deal, which means it joins NVIDIA, Microsoft, Google, and Amazon, which have signed nuclear energy deals in the last eight months as their solution to rising power needs. I asked Co-pilot to provide a summary. Meta signed a significant 20-year nuclear power deal with Constellation Energy. This agreement involves Meta purchasing approximately 1.1 gigawatts of power from Constellation’s Clinton Clean Energy Center in Illinois, starting in June 2027. The deal will support the continued operation and relicensing of the plant, which was at risk of closure. This partnership is part of Meta’s strategy to secure clean, reliable energy to power its AI and computing needs. The Clinton plant will continue to provide power to the regional grid, contributing to Meta’s goal of achieving 100% clean electricity. This move also aligns with broader efforts by tech companies to support nuclear energy as a sustainable power source. The relationship between technology companies and nuclear energy has been evolving rapidly, driven by the increasing energy demands of data centers and the need for sustainable power sources. Tech giants like Amazon, Microsoft, and Google have been exploring nuclear energy as a reliable and low-emission option to meet their growing power needs. For instance, Amazon Web Services (AWS) acquired a data center campus powered by the Susquehanna nuclear power station Similarly, Microsoft signed a power purchase agreement with Helion Energy, a nuclear fusion company, aiming to secure fusion energy within the next five years. These partnerships highlight the tech industry’s commitment to reducing carbon footprints while ensuring a stable energy supply. The need for nuclear energy in the tech sector is primarily driven by the massive energy consumption of AI and data centers. AI’s rapid growth has led to a significant increase in power demand, with projections suggesting a 165% rise in global data center power consumption by 2030. Nuclear energy offers a solution by providing clean, firm, and carbon-free power that can be generated consistently. However, the timing of nuclear projects remains a challenge, as building new reactors can take close to a decade. Despite this, the financial support from tech companies can help advance nuclear technologies, including small modular reactors, which promise quicker deployment. This symbiotic relationship between tech companies and the nuclear industry is crucial for achieving sustainable energy goals and supporting the future growth of AI and other technology-driven innovations. Below are two graphs I have published in the Not So before about nuclear energy and data power requirements that are still relevant. |
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| Financial Planning Snippets PLEASE BE VIGILANT regarding financial scamming. If anyone is requesting financial information from you (via phone, email, text, or social media), please contact us first or ask them for their ABN. Super Guarantee (SGC) for employees increases to 11.5% from 1/7/24 Concessional super contributions maximum of $30k Commonwealth Seniors Health Care card has seen the income limit increase to $152k(couple) $95.4k (single). If you are of Age Pension age and don’t have the card, please let us know. |
| Other Stories Macquarie cut cash rates after the RBA interest rate cut last week. Cash Management Account (CMA) moves from 2.50% to 2.25% and Accelerator Account moves from 4.4% to 4.15%. |
| Broker Target Price changes Target Prices should be viewed as a compass (the general direction) rather than a GPS destination. Ord Minnett Morgans Rio Tinto (RIO) decreased from $123 to $119 Morgan Stanley Macquarie Bell Potter/Citigroup Coles (COL) decreased from $22.10 to $21 Resmed (RMD) increased from $44 to $45 UBS Tracking changes for 2025 Upgrades 158 Downgrades 146 |
| Core Watchlist Index (changes since last Not So) The CORE Watchlist is a collection of 30 Australian shares, predominantly “Blue Chip”. We obtain research from up to 6 brokers on each share. Each broker provides a Target Price (value in 12 months) which then provides us with an average for each stock. We then compare that average to the current price as a percentage. IE Macquarie price $176.95 Av. Target Price $205.96= 85.9% (meaning 14.1% upside over next 12 months) + income 4.35% (including franking). To get the CORE Index we take the average across the 30 stocks. This provides us with a market average as there are up to 80 teams of analysts providing the research and target prices. The CORE Watchlist stocks represent more than 55% of the ASX 200 and so provide us with a good indicator of the market value. When it’s at 100% then the market is fully priced. We have seen that when the index is below 90%, then it’s good buying, but that doesn’t happen very often. Should you have any questions, please let me know. The Core index increased from 96.09% to 96.96%. If we removed the 4 banks, the index falls to 92.35% Overall Earnings Per Share (EPS) FY25 decreased from 1.68% to 1.25%. New lows, not a positive sign for the market. FY26 increased from 7.4% to 8.43% Most expensive – CBA 167% (highest ever) Least expensive – NextDC (NXT) 68.2%. The CORE Watchlist has 11 (10) stocks trading above 100%; they are; ANZ BXB CBA CPU JBH MQG NAB TCL TLS WBC WES, lowest number ever is 0, highest is 14. While 7 (7) is trading below 85% (the highest is 18, and the lowest is one). AMC CSL LLC NXT ORA RMD S32 (Figures in brackets are last Not So). STOCKS TRADING BELOW ALL BROKER FORECASTS ARE AS FOLLOWS; (it has been a handy indicator in the past). 11 out of the 30 CORE stocks are trading below the lowest broker target price. Highest 24. Lowest is 2. ALL current price $63.25 Broker range $70 to $76 BHP current price $37.95 Broker range $39.50 to $48.70 CSL current price $246.22 Broker range $310 to $360.30 GMG current price $33.23 Broker range $33.50 to $42.40 LLC current price $5.79 Broker range $6.30 to $7.50 NEC current price $1.61 Broker range $1.65 to $2 NXT current price $13.25 Broker range $18.70 to $21.20 ORA current price $1.88 Broker range $2.03 to $2.50 ORI current price $18.93 Broker range $20.65 to $23 SEK current price $23.92 Broker range $25.80 to $30.10 S32 current price $3.02 Broker range $3.05 to $4.50 Added Removed STO |
| Banking Index (changes since last Not So) Like the CORE Watchlist index, the Banking index is the four major banks’ average target price based on research from up to 6 brokers. The percentage below 100% is the potential upside over the next 12 months (not including income). If at or over 100%, then this indicates the Banks are fully priced. The Banking index increased from 123.9% to 126.6%. CBA hitting another all time high and sitting at 167% of the target price (average of six brokers). Based on today’s bank prices, the table below shows the estimated dividends (c) and yield. PLUS FRANKING. FY 24 % FY 25 % FY26 % ANZ 166.00 5.60% 164.00 5.53% 162 5.47% CBA 475.00 2.62% 482.00 2.66% 494.4 2.73% NAB 169.00 4.38% 170.00 4.40% 170.2 4.41% WBC 166.00 5.02% 152.00 4.59% 153 4.62% MQG 645.00 2.97% 650.00 2.99% 735.75 3.39% CBA yield is below all the others. Dividend expectations for BHP and RIO. The forecasts below are for the full year. Plus franking. Please note RIO is Calendar Year (CY). Cents per share (CPS). FY24 % FY25 % FY26 % cps cps cps BHP 219.00 5.77% 155.00 4.08% 160.17 4.22% RIO 615.00 5.61% 616.17 5.62% 615.17 5.61% |
| Other Indicators (changes since last Not So) US VIX (Fear) Index decreased from 18.57 to 17.69. Nearing normal. Normal is 10-17. Iron Ore decreased from $99.45 to $94.40. Impact from trade war and increased tariffs on steel to 50%. The average expectation for 2025 is $99.1 Copper increased from $4.70 to $4.86. ALL TIME HIGH of $5.26. Gold increased from $3289 to $3375. The VIX is down but gold up. There is still market fear around. ATH $3509.90. AUD/USD increased from 64.31c to 64.55c. USD weakened over the month CHN/USD Yuan increased from $7.19 to $7.22. Asian markets – UP US 10-year Bonds increased from 4.40% to 4.46%. It hit 4.6% on growing concerns about US debt from the new tax bill 2-year rate 3.96%. 30 year rate was above 5% now 4.98%. German 10 year Bonds increased from 2.50% to 2.52%. Japanese 10 year Bonds decreased from 1.53% to 1.50%. Highest for 16 years was 1.59%. Aussie Bonds 10 year Bonds decreased from 4.29% to 4.26%. Recent high 4.95% Oil prices decreased from $60.79 to $63.13. Tungsten—China price increased from $398mtu to $408mtu. The European price range remained at $410mtu-$445mtu (highest price for 12 years). |
| This week & next week Last, “Not So” opened in 7 Aust states (excl Tas), 8 US states (California, Massachusetts, Colorado, Connecticut, Ohio, South Carolina, Virginia and New Jersey), Bulgaria, Sweden & Israel This week – In Office – June reviews – out of office Hay, Griffith Hillston Thursday- Friday. Next week – In Office- June reviews Contact Details PO BOX 149 Deniliquin NSW 2710 125 End St Deniliquin NSW 2710 Ph. 03 58950100 Mobile 0412113524 scottm@provincialwealth.com.au kevinh@provincialwealth.com.au chrisp@provincialwealth.com.au maddyl@provincialwealth.com.au |
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| It’s pleasing to write number 700 on a day when the ASX jumped more in five years & the S&P500 had its best day since 2008. On Thursday, April 10, 2025, the ASX jumped 335 points to finish at 7710, up 4.5% for the day. However, for all the volatility, the market is only up 42 points or 0.5% for the week. (What’s all the fuss about). The S&P500 jumped 9.5%, its best day since 2008 and its ninth-highest day ever. The NASDAQ was even better, up 12%. Here are some individual stock gains from today from our preferred stable: HNDQ +13%, SEMI 12%, QHAL 11%, NXT 9%, S32 9%, NDQ 8%, GXAI 8%, RBTZ 8%, GMG 7%, and HACK 7%. US Markets initially opened down as the tariff pressure was building. At 1 pm US time, Goldman Sachs issued a research note saying the US was going into a recession. This, plus the 10-year Bond rate had pushed higher than 4.5%, were seen as the catalysts for President Trump to state at 2.10 pm saying tariffs would be reduced to 10% for all countries and paused for 90 days while negotiations could be held with individual countries. However, China’s tariffs would increase to 125% from 104% and remain in place. Thankfully, President Trump has been persuaded to change the tack, as it was leading to a US and probably a global recession. HOWEVER, the tariffs are only paused, and the other tariffs remain in place: China 125%, everybody 10%, Canada and Mexico 25%, and Steel and Aluminium 25%. So, these will still impact the US and, to a lesser extent, the global economy. It doesn’t remove the uncertainty, but it gives all parties some wriggle room, which wasn’t apparent earlier in the week. This change has shown the market’s bottom unless President Trump U-turns back to the same policy, which is unlikely as it was universally condemned. I think the tariffs will be reduced from here. Seventy-plus countries have contacted the US to address the trade issues. Unfortunately, this event will impact consumer and business confidence. It’s likely to delay some business investment decisions and change buying habits. All of these will impact companies’ value and profitability. The question is, for how long and by how much? The US quarterly reporting season starts at the end of this week, so this will give the first insight into any impact. We will likely see some volatility but smaller % moves in the coming weeks. I have updated the CORE and Banking graph below to reflect today’s movements in the ASX 200. Core is still trading below 90%. I’m on the road next week. This will be the last Not So until after Easter. Wishing everyone a safe and Happy Easter We are happy for you to share our Not So Daily Bulletin with family and friends, and if we can help them, we are also happy to chat. |
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| Staying Invested I thought I would leave this story in from yesterday as today was one of the best days that, if missed, can have an impact on your overall return, as can be seen in the table below. Our approach is to have a long-term strategy and stick to it. There is an old saying: “Time in the market is better than trying to time the market.” This means staying invested and not trying to trade the market. It helps cope with market volatility in uncertain times (like now). As mentioned, things could get a lot worse the longer President Trump sticks with his tariff policy. There is potential for the markets to fall further. HOWEVER, if a change in policy occurs, markets could rally strongly, and if you are trying to trade the market, you may miss out. The biggest days up and down in percentage turns usually occur during these periods (GFC, COVID, Euro debt crisis). The chart below from Blackrock emphasises the approach of staying invested. If $100,000 were invested in the S&P 500 in 2005, it would have grown to $717,000. If the investor tried to trade the market but missed the best 5 UP days, the value would be $452,000. If the best 10 UP days were missed, the value is $328,000. So, the story’s moral is to stick to the long-term strategy as it works over time. And, as one client said today, don’t read the financial section; stick to the sports section of the news. |
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| Financial Planning Snippets PLEASE BE VIGILANT regarding financial scamming. If anyone is requesting financial information from you (via phone, email, text, or social media), please contact us first or ask them for their ABN. Super Guarantee (SGC) for employees increases to 11.5% from 1/7/24 Concessional super contributions increases from $27.5k to $30k from 1/7/24 Commonwealth Seniors Health Care card has seen the income limit increase to $152k(couple) $95.4k (single). If you are of Age Pension age and don’t have the card, please let us know. |
| Broker Target Price changes Target Prices should be viewed as a compass (the general direction) rather than a GPS destination. Ord Minnett Morgans Morgan Stanley Santos (STO) decreased from $7.46 to $6.95 Macquarie Bell Potter/Citigroup UBS Tracking changes for 2025 Upgrades 103 Downgrades 90 |
| Core Watchlist Index (changes since last Not So) The CORE Watchlist is a collection of 30 Australian shares, predominantly “Blue Chip”. We obtain research from up to 6 brokers on each share. Each broker provides a Target Price (value in 12 months) which then provides us with an average for each stock. We then compare that average to the current price as a percentage. IE Macquarie price $176.95 Av. Target Price $205.96= 85.9% (meaning 14.1% upside over next 12 months) + income 4.35% (including franking). To get the CORE Index we take the average across the 30 stocks. This provides us with a market average as there are up to 80 teams of analysts providing the research and target prices. The CORE Watchlist stocks represent more than 55% of the ASX 200 and so provide us with a good indicator of the market value. When it’s at 100% then the market is fully priced. We have seen that when the index is below 90%, then it’s good buying, but that doesn’t happen very often. Should you have any questions, please let me know. The Core index decreased from 84.16% to 88.14% (under 90%). This is usually a good entry point. Overall Earnings Per Share (EPS) FY25 decreased from 3.28% to 3.05% lowest and likely to go lower in the coming weeks. FY26 decreased from 9.09% to 8.86% Most expensive – CBA 143.8% Least expensive – NextDC (NXT) 55.9% The CORE Watchlist has 7 (2) stocks trading above 100%; they are; CBA JBH NAB TCL TLS WBC WES, lowest number ever is 0, highest is 14. While 15 (17) is trading below 85% (the highest is 18, and the lowest is one). ALL BHP CSL GMG LLC MQG NEC NXT ORA ORI RMD S32 SEK STO WDS (Figures in brackets are last Not So). STOCKS TRADING BELOW ALL BROKER FORECASTS ARE AS FOLLOWS; (it has been a handy indicator in the past). 18 out of the 30 CORE stocks are trading below the lowest broker target price. Highest 24. Lowest is 2. ALL current price $63.13 Broker range $73 to $84 AMC current price $14.72 Broker range $15.25 to $19 BHP current price $36.00 Broker range $39.50 to $48.10 COL current price $20.84 Broker range $20.90 to $22.35 CSL current price $241.78 Broker range $310 to $360.30 GMG current price $27.80 Broker range $33.50 to $42.40 LLC current price $5.38 Broker range $6.30 to $7.50 NEC current price $1.40 Broker range $1.65 to $2 NXT current price $11.03 Broker range $18.70 to $21.20 ORA current price $1.76 Broker range $2.15 to $2.57 ORI current price $15.91 Broker range $18.85 to $21.50 RIO current price $110.59 Broker range $116 tom $130 S32 current price $2.76 Broker range $3.90 to $4.50 SEK current price $21.04 Broker range $26.75 to $30.10 SHL current price $25.20 Broker range $26.50 to $32.80 STO current price $5.56 Broker range $7.10 to $8.95 WDS current price $20.05 Broker range $20.50 to $30.25 |
| Banking Index (changes since last Not So) Like the CORE Watchlist index, the Banking index is the four major banks’ average target price based on research from up to 6 brokers. The percentage below 100% is the potential upside over the next 12 months (not including income). If at or over 100%, then this indicates the Banks are fully priced. The Banking index decreased from 108% to 112.5%. only ANZ is below 100%. Based on today’s bank prices, the table below shows the estimated dividends (c) and yield. PLUS FRANKING. FY 24 % FY 25 % FY26 % ANZ 166.00 6.05% 166.40 6.07% 168.2 6.13% CBA 475.00 3.07% 480.00 3.11% 488.4 3.16% NAB 169.00 5.00% 170.00 5.03% 170.2 5.03% WBC 166.00 5.42% 155.40 5.08% 156.6 5.12% MQG 645.00 3.58% 635.25 3.52% 739.25 4.10% Dividend expectations for BHP and RIO. The forecasts below are for the full year. Plus franking. Please note RIO is Calendar Year (CY). Cents per share (CPS). FY24 % FY25 % FY26 % cps cps cps BHP 219.00 6.08% 159.00 4.42% 180.00 5.00% RIO 617.00 5.58% 655.00 5.92% 640.50 5.79% |
| Other Indicators (changes since last Not So) US VIX (Fear) Index decreased from 52.33 to 33.62. Which is still at very high levels. Iron Ore increased from $94.90 to $96.80. The average expectation for 2025 is $99.80 Copper increased from $4.13 to $4.45. ALL TIME HIGH of $5.26 last week. Massive jump after recent sell off. Gold increased from $3033 to $3137. ATH today of $3196.60 AUD/USD decreased from 59.68c to 61.93c. Big jump today. 59.15c recent low.. CHN/USD Yuan decreased from $7.35 to $7.32. China has been devaluing its currency to lessen the impact of the tariffs. Asian markets – STRONGLY HIGHER US 10-year Bonds decreased from 4.42% to 4.30%. It fell to 3.9% last week, but has pushed higher. 2-year rate 3.90. German 10 year Bonds decreased from 2.63% to 2.61%. Japanese 10 year Bonds increased from 1.27% to 1.37%. Highest for 16 years was 1.59%. Aussie Bonds 10 year Bonds decreased from 4.37% to 4.30%. Recent high 4.95% Oil prices increased from $57.23 to $61.81. Energy prices bounced sharply. Tungsten—China price remained at $358mtu . The European price range remained at $350mtu-$370mtu. Not included in the US tariffs, therefore exempt. |
| This week & next week Last, “Not So” opened in 7 Aust states (excl Tas), 6 US states (California, Massachusetts, Colorado, Connecticut Ohio & Virginia), Bulgaria, Sweden, Italy, Iran, This week – In Office – Next week – On the road all week – Central and Northern NSW Contact details PO BOX 149 Deniliquin NSW 2710 125 End St Deniliquin NSW 2710 Mobile 0412113524 scottm@provincialwealth.com.au kevinh@provincialwealth.com.au chrisp@provincialwealth.com.au maddyl@provincialwealth.com.au |
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