| Top Stories On Tuesday, 3 March, the ASX fell 124 points to close at 9077. After hitting a new ALL TIME CLOSING HIGH yesterday of 9201. The reality of the Middle East conflict finally hit the Australian market today with a drop of 1.3%. Risk Off was the order of the day as Australia revealed that oil supplies are extremely low and the drones and missiles from Iran were being sprayed around the Middle East suggesting that this may not be a quick war. UBS upgraded their ASX 200 target to 9400. Global X has outlined three different scenarios regarding the Middle East conflict. We are watching the conflict and looking for opportunities, but at this point we prefer not to “catch a falling knife” and so are waiting for things to unfold as they could get worse before getting better. Stories below: ASX reporting seaosn Middle East turmoil NVIDIA record quarterly profit Magnificent 7 are struggling in 2026 Super contribution changes for FY27 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. |
| ASX reporting Season UBS provided the following summary Half yearly reported is now done… and we were impressed Through a month where global sentiment shifted towards ‘looking for reasons to sell’, the Aussie market powered to all-time highs, delivering its strongest February gains in seven years. Fundamentals drove this outcome, with Banks and Miners leading the way. Additional breadth was provided through positive reads from the domestic consumer facing businesses (households are still spending & trading updates were OK), and the clear structural capex themes which are still benefiting many Industrial stocks. Profit upgrades have added to the pace of overall ASX200 earnings growth, which now stands at +13.6% y/y for FY2026, up from +11.3% a month ago, and just +3.0% six months ago. The upward momentum in earnings revisions for the ASX200 is currently running at its strongest since mid-2022. Extreme share price volatility seen again…but creating opportunities. Wild share price moves were again a feature through this reporting period, with 12 ASX100 companies experiencing absolute share price moves of over 10% on result day. We were not surprised, having already noted the structural step up in volatility which has played out over the past few years, BHP and CBA’s rising weight in the ASX200 (which now stands at an all-time high has also created headaches. Underneath the surface however the environment for stockpickers actually seems good, with stock price correlations low and declining, and a wide dispersion in returns. AI threats (and benefits) are finally starting to feel real. For the past two years we have seen companies being prolific in mentioning the investments they are making in AI… but were underwhelmed by how little they had to yet show for it. But it now feels like we have ‘crossed the Rubicon’, with household names such as CBA, Telstra, Breville, Seek, Superloop, WiseTech, Woolworths, Coles and IDP Education each pointing at results to the quantifiable impacts that their AI investments are now having on the profitability and productivity of their businesses. How this ultimately plays out we do not know, but the period of intrigue, questioning, and related share price volatility, is set to continue. Upgrade ASX200 year-end target, increased to 9400 (was 8900) Results through February support our positive equity market stance, and our economists’ view of an economy which has been running ‘too hot’ (such that the RBA will be forced to tighten again in May). Earnings upgrades, and the prospect of more to come, have eased valuation concerns, and prompted us to increase our year-end ASX200 market target to 9400. The next batch of quarterly updates in May will provide guides on how corporates are faring in this just began rate hiking cycle. But given 13 rate hikes from the RBA through the period 2022/23 barely left a dent, we don’t expect the two (or maybe) three moves up in this cycle to materially impact company profits. |
| Middle East Turmoil Global X has looked at a several scenarios relating to the Middle East conflict. 1.Base Case – Contained but Tense In this scenario, retaliation continues but remains measured and partially telegraphed. Shipping disruption around Hormuz proves temporary and insurance markets normalise within weeks. There is no sustained impairment of physical supply. Oil would likely hold an elevated risk premium but struggle to move structurally higher. Gold would retain support given geopolitical uncertainty. Equities would remain volatile but stabilise as escalation risk plateaus. Real yields would remain broadly intact, allowing the US dollar to stay firm in the near term. Under this outcome, geopolitical friction remains structurally higher, supporting medium-term allocations to gold, defence and energy security without triggering a broad macro reset. 2. Bear Case – Sustained Strait Disruption Disruption to Hormuz flows persists, tanker insurance remains impaired and physical supply is materially affected. Energy becomes a true macro shock rather than a volatility event. Oil would likely move structurally higher and LNG markets would tighten significantly. Asian economies, particularly China, India, Japan and Korea, would face growth pressure first given their structural import dependence. Equity markets would broaden into risk-off territory and real yields would likely fall as growth expectations weaken. The US dollar would initially strengthen on risk aversion but could later become more sensitive to global growth dynamics. In this environment, gold would likely outperform meaningfully as both geopolitical and macro uncertainty rise. Defence exposure would benefit from accelerated military spending expectations. Energy infrastructure and security themes would move from cyclical to structural tailwinds. 3. Bull Case – Rapid Containment In this scenario, backchannel diplomacy limits further escalation and shipping flows normalise quickly. The market’s elevated starting risk premium compresses.Oil would retrace sharply as supply fears fade. Gold would likely give back part of its recent gains but remain supported structurally. Equities could experience a relief rally given how elevated volatility metrics were coming into the event. Real yields would remain anchored to macro data rather than geopolitical risk.Under this outcome, the broader thematic direction remains intact, but near-term tactical upside would favour cyclicals over defensive positioning. |
| NVIDIA record quarterly Profit NVIDIA the largest company in the world valued at $US4.43trillion NVIDIA posted record Q4 revenue of $68.1 billion, up 73% year over year, with earnings per share of $1.62 and strong 75% gross margins. The company’s Data Center segment continued to dominate, generating $62.3 billion, driven by huge demand for AI infrastructure and its Blackwell‑generation chips. Looking ahead, NVIDIA guided next‑quarter revenue to $78 billion (±2%), well above analyst expectations, and noted the forecast assumes no revenue from China, signaling robust demand elsewhere. NVIDIA also returned $41.1 billion to shareholders throughout the year, reinforcing confidence in its long‑term growth story as global AI investment accelerates. NVIDIA is part of a range of ETFs. QUAL, QHAL, IVV, RBTZ, IOO, SEMI |
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| Magnificent Seven struggling in 2026 The Magnificent Seven are struggling in early 2026 largely because of two major forces: soaring AI‑related spending and a broad market rotation away from mega‑cap tech. First, these companies are facing investor pushback as their AI capital expenditures have exploded, requiring massive ongoing investment in data centers, chips, and cloud infrastructure. This wave of spending has raised concerns about whether near‑term cash flows can keep up with the multiyear cost cycle required to maintain AI dominance. Analysts warn that these unprecedented capex levels are pressuring valuations and causing investors to question how sustainable last year’s breakneck earnings growth really is. Second, markets have entered a clear rotation toward value stocks, cyclicals, and overlooked sectors, creating a headwind for the tech‑heavy group. Investors who had been heavily concentrated in the Magnificent Seven are now reallocating toward sectors seen as cheaper and less volatile, especially as concerns about concentration risk rise. As a result, even companies with solid fundamentals are seeing share prices slide simply because capital is flowing elsewhere. This shift is visible in the performance gap between growth and value ETFs and in commentary from market strategists who note that tech’s leadership is taking a breather after years of dominance. Geopolitical tensions and fears of an AI “mini‑bubble” have only added to investor caution. To illustrate this further, the table below shows the returns ove the last 3 years for each of the mag 7, with all being in the negative for 2026. However the Fwd PE column is the most interesting as PE valuations have reduced to very normal level of early 20’s. Again by comparison CBA has a forward PE of 25.3. The Mag 7 haven’t looked this cheap for a several years. |
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| Super changes for FY2027 The main changes for FY27 were announced this week. Concessional contribution will increase from $30k to $32.5kNon 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 $30kCommonwealth 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 US Court rejected US Govt delay in issuing refunds for illegal tariffs |
| Broker Target Price Changes Target Prices should be viewed as a compass (the general direction) rather than a GPS destination. Ord Minnett Coles (COL) decreased from $24.50 to $22 Morgans Morgan Stanley Macquarie COL decreased from $24.50 to $23.70 NextDC (NXT) decreased from $22.30 to $20.80 Bell Potter/Citigroup COL decreased from $25.40 to $23 UBS COL decreased from $25 to $24. Tracking changes for 2026 Upgrades 120 Downgrades 96 |
| 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 93.44% to 91.86%. If we removed the 4 banks, the index falls to 87.92% Overall Earnings Per Share (EPS) FY26 increased from 6.25% to 8.25% Resources upgradesFY27 decreased from 14.46% to 10.76% Most expensive – CBA 134.1% (176.5% highest ever). Least expensive – Seek.com (SEK) 60.5% The CORE Watchlist continues to be very mixed. It has 10 (8) stocks trading above 100%; they are; ANZ BHP CBA NAB RIO STO TCL WBC WDS WOW lowest number ever is 0, highest is 15. While 9 (8) is trading below 85% (the highest is 18, and the lowest is one). ALL 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). 10 out of the 30 CORE stocks are trading below the lowest broker target price. Highest 24. Lowest is 2. ALL current price $48 Broker range $66 to $74 BXB current price $24.22 Broker range $24.85 to $29.40 COL current price $21.52 Broker range $22.90 to $25.40 CSL current price $153.27 Broker range $178 to $235.00 GMG current price $30.32 Broker range $31.25 to $41.50 LLC current price $4.58 Broker range $5.25 to $6.30 NXT current price $13.92 Broker range $18.35 to $21.45 NEC current price $1.07 Broker range $1.20 to $1.41 RMD current price $36.30 Broker range $43.70 to $50 SEK current price $16.27 Broker range $19.50 to $31 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 decreased from 119.3% to 117.4%. |
| Other Indicators (changes since last Not So) US VIX (Fear) Index increased from 19.86 to 21.44. Normal is 10-17. Above normal, but not showing a war impact yet. Iron Ore increased from $98.30 to $99.10. Little love for iron ore. Focus on other metals. Copper decreased from $6.06 to $5.99. It reached an all-time high of $6.11 on 6/1/26. Gold increased from $5296 to $5375. New ATH $5589.38 28/1/26. Silver decreased from $93.83 to $90.08AUD/USD decreased from 71.13 to 70.96c. Asian markets – DOWN US 10-year Bonds increased from 3.95% to 4.06%. 2-year rate 3.49%. 30 year rate below 5% at 4.71%. German 10 year Bonds increased from 2.64% to 2.72% Japanese 10 year Bonds increased from 2.11% to 2.13%. Highest since July 2007 30-year Bond hit an ATH of 3.25% Aussie Bonds 10 year Bonds increased from 4.64% to 4.74%. 2025 high 4.95%. Oil prices decreased from $67.29 to $72.71 Maybe more coming. Tungsten is still going up. China increased from $1944mtu to $2077mtu. European price $1890-$1998mtu (only changes once a week). A year ago the price was $335mtu. EQR hit a high of 39c today before closing at 32.5c. |
| This week & next week Last, “Not So” opened in 7 Aust states (excl NT), 6 US states, Bulgaria, Sweden, Indonesia, Sweden, India, Israel, Netherlands and Norway This week: March meetings. Thursday-Friday Melbourne. Nick sitting his Financial Planning exam (Thursday).Next week: March reviews – Investment committee meeting Thursday with Brad Matthews in Deni. Away Friday |
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