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| On Tuesday, October 1, 2025, the ASX reduced 3 points to finish at 8846. Today was a relatively flat day, as the focus was on the US and whether the government would remain open, as well as whether China had temporarily banned BHP’s iron ore. The ban proposed by the Chinese Mineral Resources Group, a state-owned buyer, is due to concerns over iron ore pricing. BHP hasn’t confirmed the ban, but it did drop 2.49% today. Interestingly, both RIO and FMG increased today. Yesterday, the RBA announced that interest rates would remain on hold, as predicted by Kevin “the interest rate whisperer” Hanson. Kevin said it’s too early to predict whether a cut will be made on Melbourne Cup day. Most markets have delivered a positive September, except for the ASX, which has lagged the others. Will the expected volatility come in October? If the US government shutdown drags on for a while, it might provide some volatility, but history shows that it is probably a BUY THE DIP moment. The Utes are rolling into Deni for the 27th Ute Muster, which is fully sold out for the first time. 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. |
| September Market Review Most markets were positive during the month, bucking the historical trend for September, which is typically weaker, with only Germany and the ASX being negative. The best performers were Hong Kong, up 7% due to a recovery in Chinese technology stocks and increased investor confidence. The US Nasdaq rose 5.6% again, driven by technology. Japan gained 5% on renewed confidence following the resignation of the Japanese Prime Minister and the signing of a US-Japan trade deal. For the ASX, it was a combination of stocks trading ex-dividend, weaker energy prices and banks pulling back after a strong run. Over the last six months, all markets have remained positive as they have navigated global trade issues and US tariffs. The US Nasdaq was again the best, gaining 31%, while Japan rose 26%. The ASX was mid-pack with a gain of 12.8%, while the AUD gained 5.8% against a weaker USD. Over the last year, all markets have been positive as inflation and interest rates have returned to lower levels. The structural change brought about by AI has been a more potent force than the tariff/trade uncertainty. Most markets are in double digits, with Hong Kong leading the way with a gain of 27%. The ASX has gained 7% with the World index (MSCI) up more than double that at 15.7%. Five years ago, we were dealing with COVID. Markets have been robust over that period, with all indices in double figures, and the US Nasdaq and S&P 500 doubling. Ten years ago, we were witnessing the European migrant crisis, a slowdown in China, and a slump in commodity prices. Since then, markets have more than doubled in the US, Germany & Japan, with the ASX gaining 76%. Fifteen years ago, we were still recovering from the GFC, as the US Federal Reserve was considering a second round of quantitative easing to bolster the economy. Since then, nearly all markets have doubled, with China being the notable exception. Twenty years ago, Hurricane Katrina pushed up energy prices, and Israel withdrew from Gaza. As for equity markets, returns have been robust, with the NASDAQ nearly up 10 times. Despite short-term volatility, history continues to show that a long-term investment horizon rewards patience and discipline. Structural trends, such as AI, combined with global economic resilience, support a positive outlook for diversified portfolios. |
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| Core & ETF September 2025 Review As always, performances were mixed throughout the month. The ASX fell 1.38% for the month, and the financial year was up 3.59% for the 3 months. While for the calendar year (9 months) ASX was up 8.46%. CORE Watchlist 30 ASX-listed stocks from our CORE Watchlist. The best performers for the month were Rio Tinto (RIO), up 5.68% on an improved commodity price outlook, particularly copper. NAB increased 3.2% after hitting new ALL TIME HIGHS during the month on multiple days. These are the new highs since November 2007. NextDC (NXT) increased 2,55% after gaining 13.7% last month. The increasing demand for data centres will see increased earnings in the coming years. The worst performers for the month were Santos (STO), down 16% after the takeover deal was called off. This led to Woodside (WDS) being down 12.8% as energy prices softened during the month. Sonic Health was down 10.85% due to continued weakness in the health sector. Over the financial year (3 months), the best performers were Seek.com (SEK), up 18.5%, as they continue to benefit from the recent profit results. NXT up 16.7% and BHP 15.7% due to higher commodity prices. Other notable gainers were Westpac +15.1%, ANZ +13.9% Coles (COL) +12.8% NAB +12.2% and Orora (ORA) +10% The worst performers were SHL down 21.1%, CSL down 18.9% and Amcor (AMC) down 14.5% due to concerns re-tariffs. Over the calendar year (9 months), the best performers were Brambles (BXB), up 28.9% on positive profit results, Wesfarmers (WES) up 28.6% on good profit results and strong consumer demand and Orica (ORI), up 27.5% on strong profit results and future guidance. Other notable gainers for nine months were SEK +26% JB Hi Fi (JBH) +25% Coles (COL) +23%, Telstra (TLS), +20%, The worst performers were CSL, down 27.6% on weaker sentiment for healthcare and tariff impacts., SHL, down 20.6%, and South 32(S32), down 19.4% as some of their commodity mix has suffered. 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 Battery Tech and Lithium (ACDC), up 10.5%, were also among the best three for the last two month as the switch into energy continues. Asia (IAA) up 9.9% as a rally in Chinese technology stocks continues, and Global Semiconductors (SEMI) up 9.8% as demand for computer chips remains strong. Other notable gainer for the month was Korea (IKO) +8.3%, Global Artificial Intelligence (GXAI) +7.5% & China (IZZ). The worst three were China New Economy (CNEW) down 3.3% after having a strong previous few months. Global Health (IXJ) is down 1.4% due to continued weakness in the healthcare sector, attributed to tariffs and US health policy. Aust Equal Weighted Shares (MVW) down 1.3% as the ASX fell 1.38% Over the financial year (3 months), the best performers were ACDC, up 31.4%, and Australian Resources (MVR), up 19.1%, on the back of stronger commodities, including gold and silver. CNEW up 19.3%. The worst three were Global Cybersecurity (HACK), down 2.5% due to some profit taking after a strong 6 months. IXJ down 1% and Europe (IEU) down 1% after a strong few months. Over the calendar year (9 months) the best performers were Korea (IKO), up 44.3% as it continues its strong run after political instability improved. ACDC up 33.2% & IAA up 26.8% Other notable gainers were CNEW +20.1%, China (IZZ) +20%, Europe (IEU) +16.3%, Asia (IAA) +15.4% World ex-US (VEU) +15.2%, MVR +15.2%. The worst performers were Global Cloud Computing (CLDD), down 7.7%, after a strong rally over the last couple of years, IXJ wasdown 5% and Global Robotics and AI (RBTZ) up 0.7%. |
| US Govt Shutdown A US government shutdown looks set to happen from tonight. According to the Bell Potter Coppo report The table below lists each of the six prior Federal Government shutdowns that lasted longer than a day, based on a list from Wikipedia. For each one, we show how the S&P 500 performed following the start of each shutdown. While performance over the following week and month was mixed, three, six, and twelve months later, the S&P 500 was higher five out of six times. Not only were returns generally positive, but they were also significantly better than the average for all periods. One comment we have heard multiple times about the market heading into the upcoming shutdown is that with the market trading right near all-time highs, investors are ignoring the risks of a shutdown. As the table illustrates, though, leading up to four of the six prior shutdowns, the S&P 500 was within 2% of an all-time high, and yet returns were generally positive regardless. • While a government shutdown lasting longer than a few days would surely be problematic for many federal employees whose paychecks would be delayed, for most other Americans, the only impact of a government shutdown is the endless coverage of it in the news. • So, maybe rather than ignoring the ‘risks’ of a shutdown, investors realize that the idea of a shutdown is mostly all bark and little bite. |
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| Commodities Ord Minnett has reviewed its commodity price assumptions as we head into the end of the September quarter where commodities have largely outperformed our expectations, albeit only modestly, with gold (again) being the obvious exception. In our view, markets over the period have held up mainly due to supply-side issues. The global economy is still feeling the effects of the trade war waged by the US against its trading partners although the nominal level of the tariff imposts now appears to be lower than first feared. Nevertheless, global trade in goods has shrunk and the world economy has grown at a slower rate than it otherwise would. Adding to downward pressure on demand has been a series of soft activity data across most major economies that has spurred most central banks into an easing cycle to support growth. Of particular relevance to Australia is China, where Beijing has embarked on what it has coined an ‘anti-involution’ campaign – the aim being to end the fierce self-destructive competition wrought by cutthroat margins and overcapacity that eventually leads to diminishing returns and stagnation across key industries – but so far it appears to be more style than substance in terms of managing overproduction and promoting industry consolidation. Despite this global backdrop, supply-side issues have allowed commodity prices to be supported. Commodity price forecasts Most of our price estimates have been increased for the 2025 and 2026 years, but we highlight some key changes to our 2026 estimates: • Copper – up 11%, reflecting the above-mentioned supply issues which led to a 4% cut in our forecast for market supply tonnage in 2026; • Iron ore – up 5%, underpinned by relatively solid demand from China and higher-cost ore supply being withdrawn from the market; • Coking coal – up 11%, as current prices are not realistic given steel demand, in our view; • Lithium spodumene – up 25%, reflecting a more balanced supply/demand equation. Stock choices Ord Minnett maintain preference for Rio Tinto (RIO, Accumulate) over BHP (BHP, Accumulate) in the large diversified miners, given the former’s volume growth prospects and cheaper multiples, and prefer base metals over bulk commodities, e.g. Alcoa (AAI, Buy) in aluminium. Our favoured gold exposures include Newmont Mining (NEM, Buy) and Capricorn Metals (CMM, Buy). Our updated commodity prices forecasts are detailed in Table 1. |
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| Exchange Traded Fund Series An Exchange Traded Fund (ETF) is a type of investment fund that is traded on stock exchanges, much like individual stocks. An ETF: Holds a collection of assets such as stocks, bonds, commodities, or a mix. Tracks an index, sector, commodity, or other asset (e.g., ASX 200, S&P 500, gold). Trades like a stock, meaning you can buy and sell it throughout the trading day at market prices. Other Features Diversification: One ETF can give exposure to dozens or hundreds of companies. Liquidity: Easy to buy/sell on the exchange. Lower Fees: Typically cheaper than actively managed funds. Transparency: Holdings are usually published daily. Dividends: Many ETFs pay out dividends from the underlying assets. Index ETFs: Track a market index (e.g., ASX 200, S&P 500). Sector or Thematic ETFs: Focus on specific industries (e.g., tech, healthcare). Bond ETFs: Invest in government or corporate bonds. Commodity ETFs: Track commodities like gold or oil. International ETFs: Provide exposure to global markets. Smart Beta ETFs: blends index with active strategies like quality, volatility, dividends, or value—rather than traditional market capitalisation. The ETF market has grown very quickly in terms of dollars, with a 35% increase in the last year to approx $300bn (similar market cap to CBA) and also a rapid growth of products on the ASX with over 400 different ETFs. We currently assess 80. 3. iShares Asia 50 ETF (IAA) provides passive exposure to the 50 largest companies in Asia, primarily from more developed markets, including China, Hong Kong, South Korea, Singapore, and Taiwan. The ETF aims to track the performance of the S&P Asia 50 Index, offering investors a way to diversify internationally and express a regional view. The fund is unhedged against currency fluctuations, meaning exchange rate movements may influence its returns. As of 31 August 2025:Number of Holdings: 68 companiesPrice-to-Earnings (P/E) Ratio: 14Dividend Yield: 2.17%Return on Equity (ROE): 19.97%Management Fee: 0.29% (reduced from 0.50% as of 29 October 2024). The top country allocations are: • China 42.1% • Taiwan 32.8% • South Korea 15.2% • Hong Kong 5.2% • Singapore 4.4% The top sector exposures are: • Information Technology: 44.6% • Financials: 17.9% • Consumer Discretionary 17.2% • Communications 16.6% Over the last year, up 33%, over the last 3 years, 16.80% per year. Started in Sept 2008. Previous in series 1. VanEck Global Quality (QUAL/QHAL) 2. VanEck Global Value (VLUE) |
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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. Macquarie Cash accounts – IF CHANGING YOUR PHONE, YOU NEED TO DEACTIVATE AUTHENTICATOR AND SWITCH TOTHE NEW PHONE |
| Other Stories Macquarie reduced interest rates after the RBA cut. CMA 2%, Accelerator 3.9%. – NSW Water allocations released today. Murray General 18% (increased by 8%), Murrumbidgee General 23% (increased 5%) and Lachlan General 82% (no increase). |
| Broker Target Price Changes Target Prices should be viewed as a compass (the general direction) rather than a GPS destination. Ord Minnett BHP increased from $42.50 to $45 Rio Tinto (RIO) increased from $121 (equal highest broker) to $127 (highest broker) South 32 (S32) increased from $3.95 (highest broker) to $4 (still highest broker) Morgans Seek.com (SEK) increased from $30 to $30.80 Morgan Stanley Macquarie Amcor (AMC) decreased from $17.46 to $17.44 NextDC (NXT) decreased from $22.30 (highest broker) to $20.90 Bell Potter/Citigroup UBS Tracking changes for 2025 Upgrades 300 Downgrades 242 |
| 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 94.50% to 95.03%. If we removed the 4 banks, the index falls to 90.82% Overall Earnings Per Share (EPS) FY25 increased from 2.45% to 2.51% FY26 increased from 6.21% to 6.41% Most expensive – CBA 141.1% (176.5% highest ever). Least expensive – CSL 70.3%. The CORE Watchlist has 7 (7) stocks trading above 100%; they are; ANZ CBA JBH NAB RIO WBC WES lowest number ever is 0, highest is 15. While 7 (6) is trading below 85% (the highest is 18, and the lowest is one). AMC CSL LLC RMD S32 SHL 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 $69.56 Broker range $70 to $77 AMC current price $12.31 Broker range $14.20 to $18.25 CSL current price $198.80 Broker range $258 to $300 LLC current price $5.44 Broker range $5.90 to $7.12 NXT current price $16.89 Broker range $18.00 to $22.10 ORI current price $21.29 Broker range $22.41 to $24.76 RMD current price $41.36 Broker range $47.86 to $49 SEK current price $28.59 Broker range $30.80 to $32.50 SHL current price $21.32 Broker range $24.50 to $29.40 STO current price $6.76 Broker range $7 to $8.88 WDS current price $22.85 Broker range $24.85 to $29.60 WOW current price $26.47 Broker range $28.25 to $33 Added Removed S32 |
| 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 122.3% to 122.4%. Non-banks at a more reasonable 90.7% Based on today’s bank prices, the table below shows the estimated dividends (c) and yield. PLUS FRANKING. FY 25% FY 26% FY27% ANZ 161.00 4.84% 162.80 4.89% 163.8 4.92% CBA 485.00 2.90% 501.40 2.90% 518.2 3.10% NAB 170.00 3.86% 171.20 3.89% 167.8 3.81% WBC 152.00 3.92% 155.00 4.00% 151.4 3.91% MQG 650.00 2.96% 739.50 3.37% 801.25 3.65% 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 4.12% 176.60 4.26% 182.80 4.41% RIO 560.80 4.57% 539.60 4.40% 583.00 4.76% |
| Other Indicators (changes since last Not So) US VIX (Fear) Index decreased from 16.74 to 16.28. Insidethe normal range. Normal is 10-17. Will see if this spikes with the with the Govt shut down (depends how long it lasts). Iron Ore decreased from $105.95 to $103.55. The average expectation for 2025 is $98.3. Copper increased from $4.73 to $4.85. It reached an all-time high of $5.8955 on July 8. Gold increased from $3778 to $3891. New ATH $3891 today. AUD/USD increased from 65.41c to 65.98c. Asian markets – UP US 10-year Bonds decreased from 4.19% to 4.15%. 2-year rate 3.61%. 30 year rate below 5% at 4.73%. German 10 year Bonds decreased from 2.78% to 2.72%. Japanese 10 year Bonds remained at 1.65% . Highest for 18 years was 1.675%. 30-year Bond hit an ATH of 3.25% Aussie Bonds 10 year Bonds increased from 4.29% to 4.34%. Recent high 4.95%. Oil prices decreased from $65.24 to $62.53. OPEC increasing production The price of tungsten in China remained at $593mtu. The European price range increased from $570mtu to $650mtu to $580mtu to $650mtu. Prices are at an all-time high due to the Chinese continued export ban. |
| This Week & Next Week Last, “Not So” opened in 7 Aust states (excl NT), 9 US states, Bulgaria, Sweden & UK. This week – Out office – Friday (Ute Muster) Next week – In office – October reviews. Southern Highlands/Sydney/South Coast road trip Nov 7 to Nov 14. Scott knee operation December 1. 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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