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| 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. |
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