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| On Monday, 24 November 2025, the ASX jumped 109 points to close at 8,525. This is after dropping 136 points on Friday. We are seeing increased volatility as the markets have questions about AI and the overall strength of the economy, the direction of inflation, and interest rates.Market volatility is normal, as shown in the following statistics on the US S&P 500 (average since 1928). How often does the stock market decline? 1% drop: 50-60 times a year 3% drop: 7-8 times a year 5% drop: 3-4 times a year 10% drop: every 1.1 years 15% drop: every 2 years 20% drop: every 3 ½ years 25% drop: every 5-7 years We have just seen a pullback of around 5% which has occurred 3 times this year, in line with the average. We also know that the market recovers from ALL these declines. The bounce today was after a strong Friday in the US. According to Bell Potter’s COPPO report, the two major concerns in the US have been the AI bubble & prospect of no cut by the US Fed in December. Well, the AI bubble fears were alienated after yet another big result for Nvidia & the other massive worry – that no rate cut was coming in December has suddenly done a huge U-turn & at the same time caught so many off guard. Many have been waiting for the two catalysts to trigger a significant US correction, but the -5% to -8% correction that I’ve (Coppo) been anticipating appears to have arrived, and the lows may have been reached in this selloff. We won’t know officially for another week or 2 as the volatility in US mkts could see a few more volatile days until things calm down. However, it will be a holiday-shortened week in the US, with the US market closed on Thursday for Thanksgiving and operating on a half-day on Friday. So our market will follow the US from here & should be a strong week for the ASX. The brokers are starting to provide outlooks for 2026. I’ve included a summary of Morgan Stanley and UBS below. We are happy for you to share our Not So Daily Bulletin with family and friends. If we can help them, we are also excited to chat. |
| 2026 Aussie ASX 200 Targets Morgan Stanley (MS) research provided the following Despite another good year for markets, returns for the S&P/ASX 200 (~9% total returns YTD), the index has again underperformed global markets. We (MS) see a similar outcome next year: a constructive outlook for Australian equities, although still likely to lag other key developed markets and particularly the US. Over the past month, consensus earnings have steadily trended higher across the forecast years (FY26/27/28) driven by revisions within the Materials sector. Global growth, commodity signals and investment trends are all key inputs. Bank earnings are expected to remain modestly positive while domestic cyclical stocks could carry some momentum from easing to date, but with a caveat to any headwind from an extended pause in monetary easing. Valuation remains the most contentious issue for investors at these levels. Multiples paid for earnings are stretched at ~18.7x and this compares to the 16.3x 10 year average and 14.9x long run average.When looking across Morgan Stanley price multiple assumptions for the broader Developed Market strategy peers, there is an expectation that multiples can be held above longer term averages. Indeed our US team sees a PE for the S&P 500 of ~22x being sustained. As a result, our (MS) strategist expects only some modest de-rating into 2026, which reflects a continued mix of earnings weight towards Materials and a degree of positioning rotation linked to that. The gap to earnings has been wide with circa three years of negative earnings growth for the market to FY25. For 2026, the earnings picture has improved with a boost from the Materials sector and 12 month forward EPS growth standing at 8.6%. This improved earnings backdrop, combined with the constructive global view towards activity and earnings (US led), sees us set our (MS) year-end price target for the S&P/ASX 200 Index at 9,250. See the table below UBS also released their ASX 200 2026 target. They expect Australian shares to regain momentum in 2026, forecasting a return to double-digit earnings growth and setting a year-end ASX 200 target of 8900. A stronger domestic economy and a mining-led upgrade cycle are expected to drive the sharpest profit growth in four years, reversing a prolonged period of earnings downgrades across the market. |
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| NVIDIA Quarterly NVIDIA’s share price has a significant influence on current market movements given its the large company in the world with a market cap of $US4.34 trillion. Twice the size of the ASX. In the last Not So, Global X’s investment strategist outlined the quarterly result. Below are two charts that break down quarterly earnings growth and profit. The first chart shows NVIDIA earned $57bn for the 3 months, and after expenses and tax, they managed to keep 56% as net profit or $31bn. Most good companies aim for a 30% net profit margin. In short, it’s highly valued because of its strong growth history, as shown in the second chart. Four years ago, NVIDIA was generating $5 billion per quarter; now it is $57 billion, and they are expecting it to grow to $65 billion next quarter, with more expected in 2026. There is increasing talk of an AI bubble, and references to the last time technology was in a bubble being the dotcom boom/bust of 2000-2002. While the broad commercial benefits of AI have yet to be realised through financial returns on the large amounts of capital invested. NVIDIA has been the biggest beneficiary as AI infrastructure needs to be built (in data centres), and they require semiconductors (computer chips) to deliver the AI capacity, which, at present, NVIDIA has more demand than supply. This doesn’t look like it’s stopping any time soon, with trillions stillto be spent in the coming years. On a valuation basis, NVIDIA is not too expensive, trading at 26 times FY26 earnings. Based on this, Wesfarmers has a higher P/E. |
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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 of 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. 8. Van Eck MSCI Emerging Markets ETF (EMKT) EMKT invests in large and midcap stocks based on value, momentum, low size and quality, primarily in Asia, South America and the Middle East. Emerging markets are likely to benefit from the global recovery and a lower USD. Key Features • Active Management: Built on Lazard’s 30+ years of emerging markets expertise, the fund seeks structurally growing companies with strong financial productivity and attractive valuations. • High-Conviction Approach: Focuses on a concentrated portfolio emphasising quality and long-term growth, with tactical flexibility to adjust to mispricing. • Valuation Edge: Offers access at a valuation discount—emerging market equities historically trade about 40% lower than U.S. equities, presenting potential upside. Benefits for Investors • Growth and Diversification: Provides exposure to some of the fastest-growing economies and industries globally. • Expertise and Heritage: Leverages Lazard’s deep, localised insights and on-ground presence across emerging markets. • Balanced Risk Management: Employs fundamental bottom-up analysis while maintaining tactical flexibility to manage volatility and mispricing. Price Earnings (PE) 10.84 Dividend Yield 3.29% Top 5 countries China 31% South Korea 20.1% Taiwan 19.5% India 14.6% UAE 2.5% Top 5 Sectors IT 30% Financials 18.5% Consumer Discretionary 11.4% Industrials 8.9% Communications 7.4% Return over 12 months 29.10% 5 years 13.88% pa Previous in series 1. VanEck Global Quality (QUAL/QHAL) 2. VanEck Global Value (VLUE) 3. iShares Asia (IAA) 4. Global X Artificial Intelligence (GXAI) 5. BetaShare Cybersecurity (HACK) 6. Van Eck MSCI International Small Company Quality ETF (QSML) 7. iShares Europe (IEU) |
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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 New AGED CARE fees come into effect from 1/11/25. Only for those entering care after this date. |
| Other Stories Macquarie Asset Management has made a bid for QUBE (infrastructure). |
| Broker Target Price Changes Target Prices should be viewed as a compass (the general direction) rather than a GPS destination. Ord Minnett Santos (STO) decreased from $8.10 to $8 Morgans Morgan Stanley Sonic Health (SHL) increased from $23.80 (lowest broker) to $24.50 Macquarie Bell Potter/Citigroup Sonic Health (SHL) decreased from $24 to $23.50 (lowest broker) UBS Tracking changes for 2025 Upgrades 373 Downgrades 292 |
| 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 91.47% to 91.33%. If we removed the 4 banks, the index falls to 87.89% Overall Earnings Per Share (EPS) FY25 decreased from 2.65% to 2.61% FY26 increased from 6.77% to 6.93% Most expensive – CBA 131.8% (176.5% highest ever). Least expensive – NXT 68.3% The CORE Watchlist has 6 (8) stocks trading above 100%; they are; ANZ CBA NAB TCL TLS WBC lowest number ever is 0, highest is 15. While 9 (9) is trading below 85% (the highest is 18, and the lowest is one). ALL AMC 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). 16 out of the 30 CORE stocks are trading below the lowest broker target price. Highest 24. Lowest is 2. ALL current price $58.50 Broker range $71 to $75 AMC current price $13.13 Broker range $14.10 to $18.46 BHP current price $40.62 Broker range $43 to $48 BXB current price $23.60 Broker range $25.50 to $29.40 COL current price $22.52 Broker range $22.90 to $26.60 CSL current price $182.95 Broker range $225 to $275.20 GMG current price $29.24 Broker range $33.50 to 41.50 LLC current price $5.22 Broker range $5.85 to $6.74 NXT current price $13.60 Broker range $18.00 to $22.10 NEC current price $1.10 Broker range $1.22 to $1.41 ORI current price $23.35 Broker range $25.95 to $28 RMD current price $38.65 Broker range $47.04 to $51 SEK current price $25.46 Broker range $30.80 to $32.50 SHL current price $23.54 Broker range $24 to $29.40 STO current price $6.49 Broker range $6.80 to $8.15 WOW current price $28.09 Broker range $28.25 to $33 Added 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 increased from 113.5% to 113.6% 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 4.69% 166.60 4.77% 173.2 4.96% CBA 485.00 3.13% 495.40 3.13% 512.2 3.31% NAB 170.00 4.18% 170.60 4.19% 167.6 4.12% WBC 153.00 4.03% 155.60 4.10% 158.8 4.18% MQG 650.00 3.36% 706.50 3.65% 801.75 4.14% 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 171.00 4.21% 172.20 4.24% 185.80 4.57% RIO 587.20 4.54% 629.00 4.86% 625.40 4.84% |
| Other Indicators (changes since last Not So) US VIX (Fear) Index decreased from 23.66 to 23.43. Normal is 10-17. Above normal Iron Ore increased from $104.10 to $104.25. The average expectation for 2025 is $98.3. Copper decreased from $5.03 to $5. It reached an all-time high of $5.8955 on July 8. Gold decreased from $4071 to $4041. New ATH $4393.60 this month. AUD/USD decreased from 64.83c to 64.61c. Asian markets – MIXED US 10-year Bonds decreased from 4.14 to 4.07%. 2-year rate 3.51%. 30 year rate below 5% at 4.72%. German 10 year Bonds decreased from 2.72% to 2.69%. Japanese 10 year Bonds decreased from 1.81% to 1.78%. Highest since July 2007 1.81%. 30-year Bond hit an ATH of 3.25% Aussie Bonds 10 year Bonds decreased from 4.47% to 4.46%. 2025 high 4.95%. Oil prices decreased from $59.66 to $58.06 The price of tungsten in China remained at $733mtu. The European price range increased from $673.75mtu -$705mtu to $735mtu-$780mtu. The price has increased 100% since April. Prices are at an all-time high due to the Chinese government’s continued export ban. |
| This week & next week Last, “Not So” opened in 7 Aust states (excl NT), 9 US states, Bulgaria & Sweden. This week – In office – finishing November reviews. Next week – Scott’s knee operation on December 1, likely not back in the office until January 5. Kevin and the rest of the team (Chris, Maddy Kara) will be working up to Christmas. Christmas closing dates: December 19 -COB. Reopening January 5. |
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