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| 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. |
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