The ASX200 is reflecting an over 5% increase YTD but stretched valuations and lagging financials mean investors should tread carefully heading into 2026. Analysts expect resources to take the lead next year, supported by signs of stabilisation in China, while banks and tech face tougher conditions. With the RBA likely pausing rate cuts through early 2026 and inflation still sticky, sector positioning will be key.

In this week’s video, Sophia covers:

• (0:22): a review of the ASX200 in 2025
• (1:02): the risks heading into 2026
• (1:21): resources, rates & the key themes for next year
• (2:34): how the local market performed this week so far
• (3:33): the most traded stocks and ETFs this week
• (4:76): economic news items to look out for next week.

Overnight, Wall St surged after the Federal Reserve officially approved a quarter percentage point cut to the interest rates, bringing the rate to the range of 3.50% - 3.75%. The Dow Jones rallied 1.1% on the news, the S&P500 jumped 0.8% and closed just shy of its all-time high, and the Nasdaq gained 0.5%. In his remarks, Chairman Jerome Powell ruled out any chance of a rate increase in 2026, and investors are betting that there will be at least one, if not multiple rate cuts to come next year – a bullish sign for equities.

Europe saw another relatively stable trading session – the Stoxx600 index closed up 0.1%, as the FTSE advanced by a similar amount while the German DAX and French CAC declined by 0.1% and 0.4% respectively.

And in Asia, the CSI fell 0.1%, the Hang Seng gained 0.4% and the Nikkei fell 0.1%.

Locally yesterday, the ASX200 edged down 0.1%, however it was only the high flying materials sector which prevented greater losses on the day, as 9 of the 11 key sectors posted losses on the day. Gold miners were particularly strong in the wake of the Fed’s rate cut, with big names Newmont (ASX:NEM) and Northern Star (ASX:NST) increasing 4.4% and 5.1%.

What to watch today:

• Looking ahead to today, the ASX is expected to follow Wall St’s strong session, with the SPI futures indicating a 0.9% jump at the open of trade today.
• Moving over to commodities,
  • Crude Oil has jumped 1.25% to US$58.98 per barrel, continuing its pattern of volatility over recent weeks.
  • Precious metals were buoyed by the rate cuts, with Gold advancing 0.5% to US$4227 per ounce, while Silver has jumped another 1.9% to further extend on its already record high price, and is now trading at US$61.80 per ounce.
  • And Iron Ore is trading up 0.4% to US$106.66 per tonne.

Trading Ideas:

• Bell Potter maintains a speculative Buy rating on emerging online marketplace operator Frontier Digital Ventures (ASX:FDV), with a 12 month price target of 57c per share, based on their projected revenue streams moving into CY26.
• And Trading Central have identified a bullish signal in Newmont Corporation (ASX:NEM), indicating that the price may rise from the close of $139.10 per share to the range of $160 - $164 per share over a period of 25 days, according to the standard principles of technical analysis.

Starting in the US overnight, Wall St saw a relatively flat session, as all eyes remain on the impending Fed meeting later this week. While investors are expecting a nearly 90% chance of a rate cut, focus will be on the economic projections and the general sentiment of Chairman Jerome Powell to help shape how markets will react over the next few weeks. The S&P500 closed the trading day flat, the Nasdaq gained 0.1%, while the Dow Jones fell 0.4%, primarily weighed down by 4.7% drop for JP Moregan Chase, who reported higher than expected 2026 expense projections.

Elsewhere, it was a similar story in Europe as the Stoxx600 index ended the day slightly down 0.1%, where 0.5% rise for the German Dax and a 0.7% fall for the French CAC offset, while the FTSE remained just about flat.

And in Asia, the Chinese CSI fell 0.5%, the Hang Seng fell 1.3%, while the Nikkei added 0.1%.

Locally yesterday, the ASX200 extended on its losses from Monday with a 0.5% slide, mainly in the afternoon after the RBA announced that the cash rate would remain unchanged at 3.6%. Although this was widely expected, the market reacted to comments from RBA Governor Michele Bullock stating that no rate cuts were on the horizon for the “foreseeable future.”

What to watch today:

• Looking ahead to today however, the ASX is expected to rebound from the last 2 days’ losses, with the SPI futures indicating a 0.3% jump at the open of trade.
• Over to commodities,
  • Crude Oil prices have slipped a further 0.8% to US$58.40 per barrel.
  • In precious metals, Gold is trading up 0.5% at US$4209 per ounce, while Silver has jumped another 4.5% to over US$60 per ounce, smashing its previous all time high and reaching 110% price gain year to date. The run is driven by squeezing supply, as well as a surge in demand for industrial usage, as silver is currently used in areas such as electronics and solar panels.
  • Meanwhile, Iron Ore remains stable at US$106.29 per tonne.

Trading Ideas:

• Finally, we’ll dive into some trading ideas for your consideration today. Bell Potter maintains its buy rating on online automative retailer CAR Group (ASX:CAR), with a 12 month price target of $42.20 per share. Their recommendation is based on its steadily accelerating growth, and forecasted earnings for next year.
• And Trading Central have identified a Bullish signal in Vicinity Centres (ASX:VCX), indicating that the price may rise from the close of $2.48 to the range of $2.69 to $2.73 over a period of 24 days, according to the standard principles of technical analysis.

Overnight the US markets pulled back to start the week, as investors await the Fed’s pivotal final meeting of 2025 later this week. The S&P 500 slid 0.5%, the Nasdaq slid 0.4%, while the Dow Jones slid 0.6%.

There was mixed sentiment across other global markets - the pan-European Stoxx600 dropped just under 0.1%, as 0.1% gain for Germany’s Dax was outweighed by a 0.2% drop for the FTSE and a 0.1% drop for the French CAC.

And in Asia, the Chinese CSI gained 0.8%, the Japanese Nikkei added 0.2%, while Hong Kong’s Hang Seng fell 1.2%.

Back in Australia yesterday, the ASX 200 opened the new trading week with a 0.1% decline, with just 3 of the 11 key sectors posting gains on the day. It was a mixed day for materials, as gold miners saw losses across the board, while lithium miners Liontown resources (ASX:LTR) and Pilbara Minerals (ASX:PLS) jumped 15% and 6% on the day.

What to watch today:

• The ASX 200 is expected to extend its losses, with the SPI futures indicating a 0.3% drop at the open of trade.
• Moving over to commodities:
  • Crude Oil remains volatile, trading down 2% at US$58.87 per barrel, after it was announced that Iraq would resume production on one of its major oilfields, increasing oversupply worries.
  • It was a relatively stable day for previous metals, as gold has slipped 0.2% to US$4191 per ounce, and silver has seen a similar 0.2% drop to US$58.16 per ounce.
  • And iron ore is trading down 0.8% to US$106.42 per tonne.

Trading Ideas:

• Bell Potter has maintained its hold rating on Cobram Estate Olives (ASX:CBO), after the company recently announced a $183m capital raising to fund the development of a further 1600 hectares of orchards in the US.
• And Trading Central have identified a bullish signal in Adairs Ltd (ASX:ADH), indicating that the price may rise from the close of $1.86 to the range of $2.03 to $2.07 over a period of 33 days, according to the standard principles of technical analysis.

US equities ended the trading week in the green, as all three industry benchmarks closed higher. The Dow Jones gained 0.22%, the S&P500 posted a four-day winning streak, closing 0.19% higher, putting the index about 0.7% off its intraday record. This was after the latest inflation data was announced, which may provide incentive for the Federal Reserve to lower interest rates this week.

European markets closed mostly in the red, however the German DAX managed to advance 0.6%, while France’s CAC dropped 0.09%, the FTSE100 down 0.45% and the STOXX600 closed flat. The euro zone GDP rate was also released, showing the economy grew 0.3% in the third quarter.

Locally, the ASX200 gained 0.24% over the week and closed 0.19% higher on Friday. On Friday, materials and financials were up the most, while consumer discretionary and energy weighed down on the market.

What to watch today:

• Our local market is set to drop at the open, with the SPI futures suggesting a 0.15% decline at the time of recording.
• Looking at commodities,
  • Crude oil is up 0.69% at US$60.08 per barrel, holding at a two-week high, driven by geopolitical risk premium.
  • Gold is trading flat at US$4,198.86 an ounce,
  • And iron ore is down 0.59% at US$107.24 per tonne, while seaborne iron ore has dropped to a near four- week low, following the Simandou project in Guinea which has sent its first commercial shipment to China, which is creating a boost in global supply. This is expected to arrive in China by mid- January which will provide China with an alternative to dominant shipments from Australia and Brazil.
• And in economic news, investors are cautiously awaiting the next RBA cash rate decision which will be announced tomorrow.

Trading Ideas:

• Trading Central have identified a bullish signal in Tabcorp Holdings (ASX:TAH) indicating that the stock price may rise from the close of $0.94 to the range of $1.12 to $1.16 over 25 days.
• They have also identified a bearish signal in Supply Network (ASX:SNL) indicating that the stock price of fall from the close of $32.96 to the range of $28.90 - $29.70 over 15 days, according to the standard principles of technical analysis.

Emerging markets (EM) are positioned for continued out-performance of developed markets, driven by structural tailwinds and a rising middle class. With EM equities modestly valued and supported by a weaker US dollar, now is an attractive entry point. These markets offer exposure to transformative themes like AI, infrastructure development, and green energy transition. Bell Potter’s analysts share their ideal strategy for how to most effectively gain exposure to these markets, and capitalise on their high growth potential.

In this week’s video, Sophia covers:

• (0:20): an intro to Emerging Markets and what they are
• (0:43): factors behind the growth potential of Emerging Markets
• (2:10): Bell Potter’s ideal strategy to gain exposure
• (2:57): how the local market performed this week
• (3:55): the most traded stocks and ETFs this week
• (4:27): economic news items to look out for next week.

Kicking off in the US, Wall St extended its gains overnight after new jobs data was released which further increased the likelihood of a Fed rate cut next week. The S&P 500 gained 0.5%, the Nasdaq gained 0.4%, while the Dow Jones index added 1%.

Europe saw a mixed day on the markets – the broader Stoxx600 added 0.1%, as a 0.2% gain for the French CAC was offset by a 0.1% drop for both the FTSE and German DAX. And in Asia, the Chinese CSI saw a 0.5% drop, the Hang Seng fell 1.3%. while the Japanese Nikkei added 1.1%.

Locally yesterday, the ASX 200 closed up 0.2%, with 8 of the 11 key sectors in the green. The biggest story on the day was the release of GDP data, where it was announced that the economy had expanded by just 0.4%, below market consensus.

What to watch today:

• Looking ahead to today, the ASX 200 is expected to continue its winning streak, with the SPI futures indicating a 0.24% rise at the open of trade.
• Investors should also keep an eye on the balance of trade data, which is due at 11:30am Sydney time.
• Moving over to commodities:
  • Crude oil is trading up 0.8% at US$59.11 per barrel.
  • Precious metals remain steady – gold is up less than 0.1% to US$4208 per ounce, while silver is up just over 0.1% to US$58.50.
  • Meanwhile iron ore is trading up another 0.4% at US$107.7 per tonne.

Trading ideas:

• Bell Potter maintains a speculative Buy rating on red hot medical stock 4D Medical (ASX:4DX), and upgraded its 12 month target price to $2.50 per share after they announced a major upgrade to their commercialization agreement with Phillips in the US and Canada yesterday.
• And Trading Central have identified a bullish signal in Telstra (ASX:TLS), indicating that the price may rise from the close of $4.91 per share to the range of $5.26 to $5.34 per share over a period of 119 days, according to the standard principles of technical analysis.

Overnight in the US Wall St rebounded from Monday’s drop as Cryptocurrency regained some of its losses, and investor confidence in an imminent Fed rate drop grows. The Dow Jones added 0.5%, the S&P500 gained 0.4%, while the Nasdaq was the biggest winner on the day, closing 0.8% in the green as tech stocks, especially those in the recently volatile AI trade, posted gains.

It was a relatively stable day across the other global markets – in Europe the Stoxx600 index rose just 0.06% as a 0.5% gain for Germany’s Dax was offset by a 0.3% drop for the French CAC, while the British FTSE ended flat. Meanwhile in Asia, China’s CSI fell 0.5%, Hong Kong’s Hang Seng gained 0.2%, while Japan’s Nikkei ended flat.

Back in Australia yesterday, the ASX 200 posted a 0.2% gain, propelled mainly by a strong day for energy and materials. Major players in the energy space Woodside (ASX:WDS), Santos (ASX:STO) and Beach Energy (ASX:BPT) all added 1% on yesterday’s trade, while materials were lead by BHP (ASX:BHP), Fortescue (ASX:FMG) and Rio Tinto (ASX:RIO), which all posted gains of over 1%.

What to watch today:

• And the SPI futures indicate that the momentum will continue, suggesting a 0.17% rise at the open of trade today.
• Investors should also keep an eye on key economic data being released today, specifically the GDP figures which are due at 11:30am Sydney time.
• Moving into commodities:
  
  • Crude Oil continues to be volatile, trading down 1.2% to US$58.60 per barrel. The Russia-Ukraine conflict continues to stay front and centre, as uncertainties around the peace plan remain.
  • In precious metals, Gold has retreated slightly, trading 0.5% lower at US$4208 per ounce, while Silver continues to advance, trading 0.9% higher at US$58.53 per ounce.
  • And Iron ore is trading 0.4% higher at US$107.35 per tonne.

Trading Ideas:

• Finally, we’ll end on some trading ideas for your consideration today. Bell Potter have initiated coverage on specialist retailer of lighting, fans and electrical accessories Beacon Lighting (ASX:BLX), with a 12-month target price of $3.35 per share. They expect that its trade business, which currently makes up around 40% of its revenue, will continue to expand over the next 2-3 years.
• And Trading Central have identified a bullish signal in Rio Tinto (ASX:RIO), indicating that the share price may rise from the closing price of $135 per share, to the range of $142 to $143.50 per share over a period of 23 days, according to the standard principles of technical analysis.