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| On Monday, June 30, 2025, the ASX gained 28 points to finish at 8542. The market was positive after the US S&P500 hit a new ALL-TIME HIGH on Friday, even though tariff talks are about to take centre stage alongside the One Big Beautiful Bill, which passed the Senate 51-49 over the weekend. Today, the ASX gains were towards recent laggards CSL, up 2.2%, MQG, up 3.9%, and NXT, up 2.2%. There may have been some switching out of CBA, which was down at $184.75, down from its ATH of $192 set last week. The Coppo report says July is usually quiet but we will see with the tariffs coming back. The ASX finished the year up 10% which was a good result considering the headwinds. Most ETF’s trade ex-dividend tomorrow with the dividends paid in July. This is an interesting story about driverless ride-sharing technology. It’s coming in the next few years. Compared to human drivers, the accident rate is down 78% (I’m not sure I’m game just yet). The bond markets are still reasonably calm, so there are no concerns about the potentially rising US debt. We will likely see more volatility in the coming weeks. 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 happy to chat. |
| July tends to be quiet According to the Bell Potter Coppo report, Richard Copplestone made the following observations about the market in July. 1. It’s a 4 day week in US as Friday US markets are closed for their 4th July “Independence Day” national holiday 2. End of Financial year today – so rest of this week & all next week – instos will be squirrelled away from the market preparing their end of EOFY reports as to why they outperformed (due to excellent understanding of the mkt by themselves) or why they underperformed (due to “external shocks – like Trump’ unpredictability or the Tariff selloff or Iran (if they were long Oil/ oil stocks for that one). 3. Also many fund managers have jetted off on holidays, with schools breaking up for the next 3 weeks – so many will be away for much of July. 4. Then as they get back from holidays, those who worked in the first half of July, then take their holidays over the 2nd half of July. 5. It’s US & European summer – so they are all off on their summer breaks (like we do in “our summer holidays” in December & January) as well – that lowers trading volumes across the globe. 6. No Transition Portfolios are seen in early July – if they were going to do one – it’d be done in June. 7. I said to this guy over the last 30 years the one time I particularly dislike to be at work – is in the first 3 weeks of July – as everyone is way, trading is crap & it’s usually quite boring. 8. BUT we do tend to see profit warnings come through from companies that have just seen their end of June 30 numbers & need to advise – that adds to some volatile moves. 9. Also with reporting season starting in August – we tend to start seeing a number of stocks that are expected top, do well – or poorly – start to move up or down as buyers or shortener’s start to get their trading positions set. 10. So often as we see a number of stocks report – they may have already moved say 10% before their result & if it’s a good result they’ll add +10% more & if it’s a shocker they’ll drop -15% to -20% or even more if it’s a real shocker. 11. So July tends to thin, strong but overall quiet boring, but a lot of stocks do start to move from 21st July on– thin trading sees large moves in many stocks in the last few weeks of July.. |
| Aussie Equity strategy Morgans updated their Aussie equity view. The Australian economy continues to defy expectations of a sharper slowdown. A resilient labour market and better-than-feared retail spending are helping to support the earnings outlook for listed companies. However high prices at the large end of the market (ASX 20) may limit large cap returns. As such, we think the potential broadening-out of performance to mid-small caps provides a better risk/reward balance for returns. Equity sector preferences: Absent a sustained rebound in commodity prices given the ongoing disruption in global trade, above-average earnings growth will be difficult to achieve in a slower economy. Accordingly, we prefer a targeted portfolio approach, tilting what we believe are the best relative opportunities and the best risk/return profile. We prefer tilting exposure toward mid/small caps and quality cyclicals while monitoring/ reducing exposure to those caught in the expensive flight-to-defensive sectors (banks, staples, telcos). Review and re-balance: Defensive, and domestic facing segments broadly continue to outperform growth amid the increasingly uncertain geopolitical and macro-economic environments triggered by overseas events including a volatile policy agenda from the White House. There appears to be little room for error in stretched equity valuations. Equity risk appetite looks set for a bumpy end to 2025, requiring investors to review and re-balance portfolios more frequently. Sector ratings: Morgans sector analysts have moved to Neutral ratings on both the Telco (upgraded from Underweight) and Consumer Staples sectors (downgraded from Overweight). |
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| Core & ETF June 2025 review As always, performances were mixed throughout the month. The ASX gained 1.27% for the month, the calendar year ASX was up 4.7% (6 months), and the financial year ASX was up 9.96% (12 months). CORE Watchlist 30 ASX-listed stocks from our CORE Watchlist. The best performers for the month were Santos (STO), which was up 16.2% after receiving a takeover offer from Abu Dhabi energy company. NextDC (NXT) is up 10.6% after a rebound in the demand for data centres, and Macquarie (MQG) is up 6.8% after a sell down in April. Other notable gainers for the month were Woodside (WDS) up 6.2% and CBA 5%. The worst performers for the month were Lend Lease (LLC) down 7.8%, after gaining 10% last month. Rio Tinto (RIO), down 4.9%, as iron ore was weaker and South 32 (S32) down 4.6%, due to commodity weakness. Over the calendar year (6 months), the best performers were the same as last month, Nine Entertainment (NEC), up 31.6% after Domain was sold (Nine is the majority owner), Brambles (BXB), up 21.7% on positive profit result and Telstra (TLS), up 20.7% after finally being recognised as having technology exposure. Other notable gainers for six months were CBA up 20.6%, JB Hi-Fi up 19.1% Wesfarmers (WES) up 18.5% and Computershare (CPU), up 17.5%, The worst performers were Orora (ORA), down 23.2%, as concerns about the French bottle acquisition and the impact of a trade war on the global liquor trade. CSL down 15% as healthcare out of favour. South 32 (S32) is down 14.4% as resources have struggled. Over the financial year (12 months), the best performers were JB Hi-Fi (JBH), up 80.3% as technology sales continue to deliver, Brambles (BXB), up 61.2% and Computershare (CPU), up 51.4% as share registry outlook improves. Other notable gainers for 12 months were CBA up 45%, Telstra (TLS) up 33.7%, ResMed (RMD) up 35.2%, Wesfarmers (WES) up 30%, Aristocrat Leisure (ALL) up 31%, Westpac (WBC) up 24.4% & Coles (COL) up 22%.4% The worst three were S32 down 20.5%, CSL down 18.9% and NXT down 17.8% after a selloff due to concerns about data centre demand, which has started to reverse. 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 Korea (IKO), up 15.7%, as a change in political leader is a positive for the country and investors. Global Semiconductors (SEMI), up 6.7%, continued to rebound after a selloff due to data centre demand and trade issues regarding tariffs. The result would have been better but it went ex-dividend today 7% (giving a 13.7% gain for the month) and Asia (IAA) up 8.1% as the recovery in the Asian economies continues. Other notable gainer for the month was Emerging Markets (EMKT), up 5.7% The worst three were Global Property (RCAP), down 1.5% as US interest rate cuts have been delayed. Japan (IJP) down 0.7% on inflation, higher expected. Global Health (IXJ), down 0.3%, as concerns about Trump tariffs remain for pharmaceuticals and changes to US health policy from RFK Jr. The best for the calendar year (6 months) were IKO, up 32.6%, and Europe (IEU), up 16.8% due to expected stimulus and cheap valuations. Asia (IAA) up 14.2%. Other notable gainers China (IZZ) up 14.2% Global Cybersecurity (HACK) up 11.8%, EMKT up 11.4% & Global Value (VLUE) up 11.1% The worst performers were Global Biotech (CURE), down 12.4%, and Global Cloud Computing (CLDD), down 8.9%, after concerns about data centre demand. Global Health (IXJ) down 4% The best performers for the financial year (12 months) were IZZ, up 40.9%; Global Cybersecurity (HACK), up 34.6% due to the growing need to protect data; and IAA, up 24%. Other notable gainers for the 12 months, Global AI (GXAI) up 21.8% China New Economy (CNEW) up 20.7%, Australian Property (MVA) up 19.3% Europe (IEU) up 18.3%, Global Value (VLUE) up 18.6%, EMKT up 16.9%. The worst performers were CURE, which was down 9%, IXJ, which was down 5.7%, and Australian Resources (MVR), which was down 2.6%. |
| A significant technology change – driverless ride sharing. Last week, with great fanfare, Tesla launched its ride-sharing taxis in Austin, Texas. However, another company, Waymo (owned by Alphabet—Google’s parent company), has been delivering ride-sharing technology over the last year. To date, Waymo has driven 7 million autonomous miles and is conducting 200,000 paid trips per week, while Telsa has accumulated 50,000 miles between its Texas and California factories. I asked Microsoft’s Co-pilot to provide the advantages and disadvantages of each Waymo Waymo is a subsidiary of Alphabet Inc. (Google’s parent company) and focuses on developing autonomous driving technology. Waymo’s self-driving cars, known as Waymo One, are used for ride-hailing services in several U.S. cities. They utilise advanced sensors, machine learning, and artificial intelligence to navigate roads without human intervention. Advantages: Safety: Waymo’s autonomous vehicles are designed to reduce human error, which is a major cause of accidents (see chart below). Cost Efficiency: Operating costs are lower compared to traditional ride-hailing services since there are no driver salaries Environmental Benefits: Waymo’s fleet includes electric vehicles, contributing to reduced emissions. Technological Innovation: Waymo continuously improves its sensor suite and driving algorithms. Disadvantages: Regulatory Challenges: There is still significant pushback and concern over regulation, as no federal law oversees self-driving cars. Weather Limitations: Waymo’s technology can struggle in adverse weather conditions like heavy snow. High Initial Investment: Developing and deploying autonomous vehicles requires substantial capital. Tesla Tesla is an American electric vehicle (EV) manufacturer founded by Elon Musk. Tesla is known for its innovative electric cars, energy products, and advanced driver-assistance systems like Autopilot and Full Self-Driving (FSD). Advantages: Performance: Tesla vehicles offer impressive acceleration, handling, and overall performance. Autopilot and FSD: Tesla’s advanced driver-assistance features are continually improving and moving closer to full autonomy. Supercharger Network: Tesla has established a global network of fast-charging stations, making long-distance travel more convenient. Environmental Benefits: Tesla’s commitment to sustainable energy helps reduce greenhouse gas emissions. Innovation: Tesla is known for its continuous introduction of new features and products. Disadvantages: High Initial Cost: Tesla vehicles can be relatively expensive compared to traditional gasoline-powered cars. Quality Control Issues: Some owners have reported issues related to build quality and reliability. Dependence on Software Updates: Frequent software updates can change vehicle functionality and performance over time. Charging Infrastructure: While Tesla’s Supercharger network is extensive, it is limited to Tesla vehicles. Both Waymo and Tesla are pioneering the future of transportation, each with its unique strengths and challenges. Morgan Stanley (MS) provided an update on Waymo’s safety LA Safety Data Indicate Waymo’s Safety Advantage vs. Humans Scaling to New Cities. Waymo is now including LA data in its comparison of accident rates relative to human drivers, and the data suggests Waymo still maintains a healthy safety advantage vs. human drivers, with ~79% fewer airbag deployment crashes and 78% fewer injury-causing crashes. This safety advantage has largely remained stable vs. historical data releases which only included SF and Phoenix ( Exhibit 2 ). MS thinks this speaks to the ability of Waymo to generalize in new regions without sacrificing safety. We have written about Waymo’s work to build a generalizable and scalable self-driving system (see here). It will be important to track how Waymo’s safety performance compares to other autonomous players as they begin to ramp up their operations. |
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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. |
| Other Stories – Nine Entertainment (NEC) via Stan has bought the local rights to English Premiership League (EPL) – soccer. |
| Broker Target Price changes Target Prices should be viewed as a compass (the general direction) rather than a GPS destination. Ord Minnett Morgans Morgan Stanley Macquarie BHP decreased from $42 to $40 Rio Tinto (RIO) decreased from $115 to $105 (lowest broker) South 32 (S32) decreased from $4.50 (highest broker) to $3.60 Bell Potter/Citigroup UBS Tracking changes for 2025 Upgrades 164 Downgrades 160 |
| 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 97.37% to 97.70%. If we removed the 4 banks, the index falls to 92.96% Overall Earnings Per Share (EPS) FY25 decreased from 0.96% to 0.92% new low. FY26 increased from 7.96% to 8.13% Most expensive – CBA 169.1% (176.5% highest ever) Least expensive – NextDC (NXT) & CSL at 73.8%. Both jumped 2% today. We might see a rally in both these in the new FY. The CORE Watchlist has 11 (11) stocks trading above 100%; they are; ANZ BXB CBA CPU JBH MQG NAB TCL TLS WBC WES, lowest number ever is 0, highest is 14. While 6 (7) is trading below 85% (the highest is 18, and the lowest is one). AMC CSL LLC NXT ORA ORI 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). 11 out of the 30 CORE stocks are trading below the lowest broker target price. Highest 24. Lowest is 2. ALL current price $65.17 Broker range $70 to $76 BHP current price $36.75 Broker range $39.50 to $48.70 CSL current price $239.48 Broker range $310 to $360.30 LLC current price $5.38 Broker range $6.30 to $7.50 NEC current price $1.63 Broker range $1.65 to $2 NXT current price $14.50 Broker range $18.00 to $21.20 ORA current price $1.89 Broker range $2.03 to $2.50 ORI current price $19.49 Broker range $20.65 to $23 SEK current price $24.05 Broker range $25.80 to $30.10 S32 current price $2.91 Broker range $3.05 to $4.30 WOW current price $31.11 Broker range $31.80 to $36 Added Removed SHL |
| 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 126.1% to 131.2% record high. CBA is still dominating. Based on today’s bank prices, the table below shows the estimated dividends (c) and yield. PLUS FRANKING. FY 24 % FY 25 % FY26 % ANZ 166.00 5.69% 164.00 5.62% 162 5.56% CBA 475.00 2.57% 484.20 2.62% 499.6 2.70% NAB 169.00 4.29% 170.00 4.32% 170.2 4.32% WBC 166.00 4.90% 152.00 4.49% 155.2 4.58% MQG 645.00 2.82% 650.00 2.84% 735.75 3.22% 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). FY24 % FY25 % FY26 % BHP 219.00 5.96% 155.00 4.22% 160.17 4.36% RIO 615.00 5.90% 616.17 5.91% 615.17 5.90% |
| Other Indicators (changes since last Not So) US VIX (Fear) Index decreased from 17.48 to 16.32. Back below normal level for first time in many weeks. Not sure how long it will last with tariffs taking centre stage again. This time last year it was at 12.69. Normal is 10-17. Iron Ore increased from $92.85 $94.75. The average expectation for 2025 is $99.1. This time last year it was $106.90, a drop of 11.3% Copper increased from $4.91 to $5.08. ALL TIME HIGH of $5.26. This time last year it was $4.41. An increase of 15.1% Gold decreased from $3344 to $3303. ATH $3509.90. This time last year it was $2,337. An increase of 41.3% AUD/USD increased from 65c to 65.39c. This time last year it was $66.47c A decrease of 1.6%. Asian markets – UP. US 10-year Bonds decreased from 4.29% to 4.27%. This time last year it was 4.45%. A drop of 0.18%. 2-year rate 3.74%. 30 year rate was above 5% now 4.83%. German 10 year Bonds increased from 2.53% to 2.59%. This time last year it was the same. Japanese 10 year Bonds increased from 1.40% to 1.43%. Highest for 16 years was 1.59%. This time last year it was 1.10%. An increase of 0.33% Aussie Bonds 10 year Bonds increased from 4.12% to 4.17%. Recent high 4.95%. This time last year it was 4.43%. A decrease of 0.26% Oil prices decreased from $65.28 to $65.17. Ceasefire holding between Israel and Iran. This time last year it was $83.64 or a drop of 22% Tungsten—China price increased from $418mtu to $428mtu. The European price range increased from $437-$475mtu to $440-$485 (highest price for 12 years). This time last year, it was China $350 mtu and Europe $335-$360mtu mtu. The price has increased over the year by 22.2% in China and 33% in Europe. |
| This week & next week Last, “Not So” opened in 7 Aust states (excl Tas), 3 US states (California, Massachusetts & Colorado), Bulgaria, Sweden UK France, Israel and Italy This week – In Office – Starting new financial year. Next week – In Office- Starting new financial year. Contact Details 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 |
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