Trending On Livewire: Weekend Edition - Saturday 30th August
ASX 200 hit fresh highs as reporting season wrapped, small caps surged, and investors weighed lofty valuations.
Good morning,
And… breathe. Another reporting season is in the bag. This one felt quite hectic, punctuated by some large-cap names that really bounced around. For all the ‘feels’ of volatility, however, the season was not actually that volatile when looking at certain metrics, like average share price moves of beats versus misses.
More importantly, the market smiled and kept on coming, with the ASX 200 hitting a fresh all-time high on Monday, before slipping back below 9000 later in the week.
It seems most of you out there fared well during the season. The poll in the previous Weekend Edition showed that more than half of respondents were managing through the season even Steven (some good, some bad results), whilst another 25% of you claimed to be sailing through without a worry in the world – clearly not holders of CSL, Woolworths, James Hardie, Inghams or Wisetech.
And whilst the top-end took its lumps, it seems that small-caps are finally waking from their slumber. If I had a dollar for every time a small-cap manager had said to me that it was small caps’ time to shine over the past 18 months, I’d be a rich man. Unlike the Titanic, however, I guess it’s better late than never.
At the time of writing, the ASX Small Ordinaries is up circa 8% for the month, whilst the ASX 200 is up closer to 3%. In a market craving some dispersion as an antidote to the concentration we’ve endured, let’s hope this continues.
Have a great weekend.
Chris Conway, Managing Editor, Livewire Markets
The Magnificent 7 and the myth of mean reversion
With valuations sky high and 2025’s many economic headwinds now being met with little more than a shrug by equity markets, Lazard’s chief market strategist Ron Temple thinks we’re in a period of “extreme optimism” where all news is good news. In this wide-ranging interview, Temple explains the important factors he thinks that investors may be overlooking right now (Fed independence and tariff lags), which of China, Japan and Europe are worth keeping an eye (and which aren’t) and why we could be at the beginning of the end of American exceptionalism.
FNArena reporting season monitor: August 2025 - Week 4 (338 stocks covered)
Welcome to the fourth weekly report for the August 2025 results season. The FNArena Reporting Season Monitor reports ratings, consensus price target changes, and brief summaries of the collective responses from FNArena's database of brokers for each of the stocks covered. The latest update is now available for download, with coverage of the 338 stocks that have reported results in August. You can access the full PDF in the attachment at the bottom of this wire. Readers should be aware that it doesn't matter what profit or loss has resulted from a company. What's important is how the stock fared against consensus forecasts – whether management delivered a "miss" or a "beat".
Top 3 Wires this Week
Here are the weeks top viewed or liked wires by our subscribers:
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Some of the best wires from our Contributors this week:
Commodities
Water: The ultimate scarcity play
View
Chart of the Week: Non-tech stocks are waking up - and that’s good news
For much of this rally, investors have worried about the market’s reliance on the “Magnificent 7” - Apple, Microsoft, Alphabet, Amazon, Meta, Tesla, and Nvidia - to keep powering returns. But consensus earnings estimates show the other 493 companies in the S&P 500 are finally catching up. Growth for the S&P 493 is projected to exceed 10% next year, with some quarters (like Q4 2026) forecast to match the Magnificent 7, at 14%.
“You want every sector to be contributing to profits. I see two trends here: earnings growth leveling off for the most highly valued sector, especially as its biggest participants spend a huge chunk of cash on AI (without much proof of profits),” said Callie Cox, Chief Market Strategist at Ritholtz Wealth Management.
For diversified investors, it’s a much-needed sigh of relief: the rally may finally be broadening, underscoring the importance of keeping value stocks in the mix.
Vishal Teckchandani, Senior Editor, Livewire Markets
Weekly Poll
As the ASX surged past 9,000 during reporting season, the ASX 200’s P/E ratio climbed above 20x, a level rarely reached outside of unusual market conditions.
Do the results justify these valuations?
a) Yes - earnings growth supports them, I’m still buying
b) Somewhat - valuations are high, I’m holding but cautious
c) No - they look stretched, I’m not adding at these levels
d) No - a correction is coming, I’m actively selling
LAST WEEKS POLL RESULTS
We asked "How has the (reporting) season been treating you so far?"
The poll shows 54% said some good, some bad, 24% said they were sailing through without a worry in the world (so far), 20% said they had copped a couple of big whacks but were not worried as long-term investors, and 2% said their portfolio was on life support.
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