| Top Stories |
| On Wednesday, October 29, 2025, the ASX fell 1% or 86 points to finish at 8926. The market was holding steady until the hotter-than-expected inflation number was released. Best summed up by Bell Potter’s Coppo report. 1. The ASX 200 was smacked -86 points or -0.96% (low -91pts) after the hotter than expected inflation number today effectively ruled out any chance of a rate cut next Tuesday by the RBA – that ship has now sailed. 2. In fact, some think it’s killed the rate cycle completely, with December now a zero chance & a cut next year in February now seen as a write off. 3. So with the prospect of no more rate cuts for a while the market hit the banks, financials & REITS. 4. In fact the risks that inflation trends back up, could mean that the unthinkable is now a real chance – that the next move by the RBA in 2026 could be a rate hike!!! 5. But there is a lot of economic data to come before the odds of that start to firm. 6. Tomorrow is a big day here, that could well show the roadmap that the US mkt will meander between now & XMAS. 9. The FED will cut rates tonight -25pts and at the press conference after at 5.30am Syd time if Powell even “hints” that there is the “chance” of another cut in December – mkts will get excited 10. Then just after 7am (after US mkt has closed) Microsoft, Alphabet & Meta all report – and they will really shape things going forward. 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. |
| Australian inflation – higher than expected! The Australian quarterly inflation rate came in at 1.2% and 3.2% for the year, which was hotter than expected. Additionally, the core of the trimmed inflation rate, which excludes the volatile components of food and energy, remains at 3%. The share market took this as a negative as the expectation of an interest rate cut was reduced. Kevin “the interest rate whisperer” Hanson agrees, we are unlikely to see an interest rate cut on Melbourne Cup day. |
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| U.S.-China trade negotiations There is likley to be a meeting this week in South Korea with Trump and Xi AMP’s Shane Oliver provided a summary of the current positions. Overall, in the short term, China has an upper hand in negotiations for three reasons: 1. While domestic economic growth is still slowing, 4.8% growth rate is not a recessionary level, and softening growth has not been driven by tariffs. Past attempts at stimulus measures have shown that they worked, so the Chinese government will only deploy them as necessary. 2. China has clear dominance in the supply chain of critical minerals and raw materials for emerging technology. At least in the next few years, China is not dependent on just the US as a customer. 3. The US faces more domestic and market constraints. Trump still sees the financial markets, whether shares or bonds, as important to his success. Every threat to raise tariffs to prohibitively high levels this year has been followed by a backdown and efforts to convince investors that “it will all be fine!” or commonly referred to as the TACO (Trump Always Chickens Out) trade. More importantly, as mid-term elections come closer, the government will need to refocus on both containing inflation and addressing slowing jobs growth – neither of which is helped by trade wars or policy uncertainty. However, in the long term, national security concerns will see both countries race to patch up their respective weaknesses (i.e. rare earths supply for the US and chipmaking capabilities for China). Ultimately, a more fragmented and less specialised supply chain only means that productivity won’t be as high as it could be, and may well threaten the superiority of the US market in the next century. |
| US tech bubble? Five of the magnificent seven are reporting their quarterly earnings over the next two days. The market is anticipating growing results that have pushed most to near ALL-TIME HIGHS. While the S&P 500 is up 17% for the year, the Mag 7 has accounted for 60% to 70% of the gain in the S&P 500. This is after accounting for 57% of the S&P500 24% in 2024. There is increasing talk of an AI bubble that can’t be ruled out, however, in a research note from Goldman Sachs, they say while the sheer scale of market dominance of leading technology companies is striking: the top five US technology companies collectively hold a value exceeding the combined size of the Eurostoxx 50, the UK, India, Japan, and Canada, representing approximately 16% of the entire global public equity market. That said, while technology stocks have increased dramatically in size, they do not think we are in a bubble yet: 1. AI applications are boosting productivity when deployed. 2. Unlocking these productivity benefits requires significant computational power, especially since models are increasing in size (see chart exhibit 6 below) much more quickly than computation and energy costs are falling. Goldman Sachs are not concerned about the total amount of AI investment. AI investment as a share of US GDP is smaller today (<1%) than in prior large technology cycles (2-5%) as seen in the table below 3. The appreciation of the technology sector has, thus far, been primarily driven by fundamental growth and robust earnings, rather than irrational speculation about future potential. 4. The leading companies that have experienced the strongest returns possess unusually strong balance sheets. 5. The AI space has, to date, been dominated by a few established incumbents. Most historical bubbles, conversely, formed during periods of intense competition as both investors and numerous new entrants flocked into the space. Furthermore, Goldman Sachs estimates an $8tn capital revenue unlocked by AI productivity gains in the US, with plausible estimates ranging from $5tn-$19tn (chart below: % of GDP spent investing in new technology). These estimates exceed current cumulative AI investment forecasts. Nevertheless, market concentration is historically high, and given these risks, the focus is on diversification strategies. |
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| US Tech quarterly earnings The overall expectations for the Mag 7 from this quarter are as follows; Overall Expectations Earnings Growth: The Magnificent Seven are projected to post 11.9% to 14.9% year-over-year earnings growth, significantly outpacing the rest of the S&P 500, which is expected to grow at 6.7%. Revenue Growth: Revenue growth for the group is expected to be around 15.3%. [fxstreet.com] AI Spending: Capital expenditures, especially for AI infrastructure, are a major theme. Microsoft, Alphabet, Amazon, and Meta are expected to spend $360 billion in 2025, rising to $420 billion in 2026. Microsoft (Reporting Oct 29) Expected EPS: $3.65 (up 10.6% YoY) Revenue Estimate: $74.96B (+14.3% YoY) Key Drivers: Azure cloud growth (projected +38%), Copilot AI adoption, and enterprise contract expansion. Alphabet (Reporting Oct 29) Expected EPS: $2.27 Focus Areas: Cloud business momentum, search dominance in the AI era, and DOJ case resolution. Stock Performance: Up 41.6% YTD return. Meta Platforms (Reporting Oct 29) Expected EPS: $8.10 Strengths: Strong ad revenue, AI-powered products (e.g., smart glasses), and Family of Apps performance. Surprise History: Average earnings surprise of 19.23% over the last four quarters. Amazon (Reporting Oct 30) Expected EPS: $1.58 Revenue Guidance: $174B–$179.5B (+10–13% YoY) Key Issues: AWS outage, AI infrastructure spending, advertising growth, and Q4 holiday season outlook. Apple (Reporting Oct 30) Expected EPS: $1.76 Concerns: Lagging AI investment compared to peers, which may explain recent underperformance. Positives: Strong iPhone 17 sales and record share price. Nvidia (Reporting Nov 19) Expected EPS: $0.78 Focus: AI chip demand, data centre growth, and its role as the backbone of AI infrastructure. Performance: 50% YTD return; consistently strong earnings surprises Bubble Watch: The Magnificent Seven now represent over one-third of the S&P 500’s market cap, raising concerns about market concentration. Fed Rate Cut: A potential rate cut this week could further boost tech valuation. |
| Bank earnings Citibank provided the following comments regarding the upcoming bank profit results. WBC (3 Nov) – FY25 Cash Net Profit After Tax (NPAT) $6,807m, Basic Cash Earnings Per share (EPS) 199c, Dividend per share (DPS) 152c Our cash earnings estimate is 3.6% below consensus on account of lower BDD expenses and recently announced restructuring costs of $273m, which consensus fails to incorporate fully, in our view. Adjusted for one-time restructuring costs, our core earnings are in line with consensus, while cash earnings are 1% below consensus. NAB (6 Nov) – FY25 Cash NPAT $7,107m, Basic Cash EPS 232c, DPS 170c Our cash earnings estimate is 1% below consensus, on account of higher BDD expenses than consensus. On PPoP, we are in line with consensus. MQG (7 Nov) – 1H26 Cash NPAT $1,877m, Basic Cash EPS 495c, DPS 280c Our 1H26 cash earnings estimate is in line with consensus, although our segmental mix varies. On MAM, we are 15% below consensus, but 7-8% higher for CGM and MacCap. The risk with the result is that depending on the timing of realisations, the typical reliance on 2H seasonality could be greater this year to meet guidance and consensus. ANZ (10 Nov) – FY25 Cash NPAT $6,356m, Basic Cash EPS 214c, DPS 166c Our cash earnings estimate is 1% below consensus, attributed to one-time costs restructuring and ASIC settlement costs which is not fully captured by consensus yet. Adjusted for the same, our core earnings are in line with consensus. We see upside risk to our earnings estimate as 2H25 underlying opex may turn out to be below management guidance given the recent focus on cost resets. 1Q quarterly trading updates for CBA (11 Nov) UBS numbers are WBC NPAT $6.6bn EPS $1.93 and Dividend $1.55 NAB NPAT $7.2bn EPS $2.31 and Dividend $1.70 MQG NPAT $1.999bn EPS $5.25 and Dividend $3.10 ANZ NPAT $6.806bn EPS $2.25 and Dividend $1.66 |
| CSL CSL was the third largest company on the ASX; however, after announcing last month, it was splitting off one of its businesses. Yesterday at the AGM, they announced that growth would be in the high single digits rather than the low single digits. Due to several factors, including US tariffs, declining US vaccination rates (RFK Jnr) and cost-cutting measures in China. The company suggested that workarounds were available, but they would require some time. The market obviously didn’t want to wait, and the stock was sold down 16% and a further 4% today. The brokers updated their numbers as outlined in the target price section. The interesting observation is that they still have only BUY & HOLD recommendations, and profit and dividends are still expected to grow each year. Comments from Bell Potters Coppo report. CSL hit a 7-year low, as quants and machines sold on earnings downgrades, plus institutions also joined in again today, as the stock followed yesterday’s -15.9% savaging after they cut the earnings outlook and delayed the Seqirus demerger amid weak US vaccine demand and China cost pressures. Volume yesterday was massive at 5.6m shares (vs normally 2.3m), and again today it was elevated (indicating more selling was hitting it) at 3.9m shares. This will take a while to recover & so is a write-off for the rest of 2025. PW fundamental comparison For those brave enough. Look at the comparison with CBA. They have the same share price, even after today’s downgrades by the brokers, CSL is expected to earn over $4 per share more ($10.93 v $6.33), which gives CSL a PE of 15 compared to 26 for CBA. Even the dividend is close, CSL is still expected to increase its dividend over the next 3 years. |
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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. 5. Betashares Global Cybersecurity ETF (HACK) HACK ETF provides a passive exposure to global cybersecurity companies predominantly in industries including systems software, IT consulting and communication services. Cybersecurity can be viewed as a growing sector given the rise in cybercrime. The ETF includes global cybersecurity giants as well as emerging companies in the space with the aim of tracking the performance of the Nasdaq Technology Association Cybersecurity which comprises around 40 companies. There is no currency hedging in this fund. Growth Drivers Rising Cybercrime Cyber threats are increasing globally, with Australia reporting a 23% year-over-year rise in cybercrime incidents and an average cost of $46,000 per small business incident. This trend is pushing governments and businesses to invest more in cybersecurity. Digital Transformation As more activities move online—banking, shopping, communication—the need for robust cybersecurity grows. This makes the sector both defensive and growth-oriented, even during economic downturns. Strong Performance History 1-Year Return: +28.19% 5-Year Return: +90.86%Since Inception (2016): +203.01% These figures reflect consistent long-term growth. Global Exposure The ETF includes leading cybersecurity firms from the U.S., Israel, India, France, and Japan, offering diversified access to a high-growth sector. Sector Focus With 93.65% of holdings in the Technology sector, the ETF is tightly aligned with innovation and digital infrastructure. Number of holdings 39. Top sectors Technology: 93.65% Industrials: 6.5% Top regions US: 75-80% India: 7.5% Israel: 8% France: 4% Japan: 1.7% End of Sep 2025 return 34.25% Previous in series 1. VanEck Global Quality (QUAL/QHAL) 2. VanEck Global Value (VLUE) 3. iShares Asia (IAA) 4. Global X Artificial Intelligence (GXAI) |
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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 – BHP is settling 30% of Iron Ore contracts in Yuan and not USD in 2026. – US announces $80bn investment in nuclear reactors built by Westinghouse. |
| 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 $258 (lowest broker) to $235 Morgans CSL decreased from $293.83 to $249.51 Woodside (WDS) increased from $29.60 to $30.50 Morgan Stanley CSL decreased from $285 to $248 CBA increased from $143.70 (highest broker) to $144.80 (still highest broker) Goodman Group (GMG) increased from $40.47 (highest broker) to $41.50 (still highest broker) South 32 (S32) increased from $3.25 to $3.45 Westpac (WBC) increased from $32.20 to $31.60 Macquarie CSL decreased from $295.90 to $275.20 (highest broker) Bell Potter/Citigroup CSL decreased from $265 to $230 (lowest broker) UBS CSL decreased from $300 (highest broker) to $275 Tracking changes for 2025 Upgrades 341 Downgrades 265 |
| 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 96.16% to 96.19%. If we removed the 4 banks, the index falls to 92.03% Overall Earnings Per Share (EPS) FY25 decreased from 2.58% to 2.53% FY26 increased from 6.71% to 6.99% Most expensive – CBA 145% (176.5% highest ever). Least expensive – CSL 76.9%. The CORE Watchlist has 10 (9) stocks trading above 100%; they are; ANZ CBA JBH MQG NAB RIO TCL TLS WBC WES lowest number ever is 0, highest is 15. While 6 (7) is trading below 85% (the highest is 18, and the lowest is one). AMC CSL NXT RMD 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). 13 out of the 30 CORE stocks are trading below the lowest broker target price. Highest 24. Lowest is 2. ALL current price $64.75 Broker range $70 to $77 AMC current price $12.58 Broker range $14.20 to $18.25 BXB current price $24.67 Broker range $25.50 to $29.40 COL current price $23.07 Broker range $23.45 to $26.80 CSL current price $217.55 Broker range $258 to $300 LLC current price $5.67 Broker range $5.90 to $7.12 NXT current price $16.19 Broker range $18.00 to $22.10 ORI current price $22.01 Broker range $22.71 to $25 RMD current price $41.22 Broker range $47.86 to $49 SEK current price $27.84 Broker range $30.80 to $32.50 SHL current price $21.64 Broker range $24.50 to $29.40 STO current price $6.45 Broker range $6.80 to $8.88 WOW current price $26.82 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 decreased from 123.8% to 122.4%. Lowest is ANZ 112.1% Highest CBA 143.7% 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 4.44% 162.00 4.38% 166 4.49% CBA 485.00 2.85% 501.40 2.85% 518.2 3.04% NAB 170.00 3.91% 171.20 3.94% 167.8 3.86% WBC 152.00 3.97% 154.60 4.04% 151.6 3.96% MQG 650.00 2.90% 745.25 3.32% 814.75 3.64% 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 3.90% 172.20 3.92% 185.80 4.23% RIO 587.20 4.41% 629.00 4.72% 625.40 4.70% |
| Other Indicators (changes since last Not So) US VIX (Fear) Index decreased from 18.60 to 16.42. Normal is 10-17, so back in the normal range as US/China trade issues settle, but the government remains shut down. Iron Ore increased from $104.15 to $106. The average expectation for 2025 is $98.3. Copper increased from $5.02 to $5.17. It reached an all-time high of $5.8955 on July 8. Gold decreased from $4145.20 to $3970. New ATH $4393.60 last week. Profit-taking dropped back nearly 10% from its high. AUD/USD increased from 65.00c to 65.97c. Rate cut off the card. Asian markets – mainly higher with Japan hitting 51,000 for the first time. US 10-year Bonds increased from 3.97% to 3.98%. 2-year rate 3.50%. 30 year rate below 5% at 4.54%. German 10 year Bonds increased from 2.57% to 2.61%. Japanese 10 year Bonds decreased from 1.66% to 1.65%. Highest for 20 years. 30-year Bond hit an ATH of 3.25% Aussie Bonds 10 year Bonds increased from 4.14% to 4.23%. 2025 high 4.95%. Oil prices decreased from $60.68 to $60.07 The price of tungsten in China increased from $623mtu to $643mtu. The European price range increased from $600mtu-$685mtu to $610mtu to $685mtu. 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), 7 US states (including a new state – 31st New Hampshire), Bulgaria, Sweden, Germany, Romania and South Africa. |
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