Daily Market Reports | 8:50 AM
This story features PERPETUAL LIMITED, and other companies. For more info SHARE ANALYSIS: PPT
The company is included in ASX200, ASX300 and ALL-ORDS
ASX futures are pointing to a tempered decline to start the week.
Post the weekend news of US attacks on Iranian nuclear facilities, all eyes will be on the oil price and risks to global oil supplies and inflation.
| World Overnight | |||
| SPI Overnight | 8469.00 | – 20.00 | – 0.24% |
| S&P ASX 200 | 8505.50 | – 18.20 | – 0.21% |
| S&P500 | 5967.84 | – 13.03 | – 0.22% |
| Nasdaq Comp | 19447.41 | – 98.86 | – 0.51% |
| DJIA | 42206.82 | + 35.16 | 0.08% |
| S&P500 VIX | 20.62 | – 1.55 | – 6.99% |
| US 10-year yield | 4.38 | – 0.02 | – 0.50% |
| USD Index | 98.28 | – 0.18 | – 0.18% |
| FTSE100 | 8774.65 | – 17.15 | – 0.20% |
| DAX30 | 23350.55 | + 293.17 | 1.27% |
Good morning,
Oh what a weekend. Having lulled the markets into a wait and see approach for up to two weeks, President Trump gave the green light to carry out strategic strikes on Iranian nuclear facilities.
Tariff negotiations are in the background as markets watch and wait for the Iranian response.
Latest market update from IG, Tony Sycamore
IG Weekend markets, which trade on the IG platform over the weekend, suggest traders expect US equity futures to fall about -1.3 to -1.5% when they re-open tomorrow, reflecting fears of a broader conflict, especially with Iran threatening to target US bases in Qatar, Bahrain, and the UAE, and possibly closing the Strait of Hormuz.
Last Friday, US Fed Governor Waller stated in an interview he could foresee the Fed cutting rates “as early as July”. He believes tariffs will not have a persistent impact on inflation and clarified he does not think the Fed needs to wait for labour market weakness before cutting rates.
As noted last week in our FOMC previews, we believe the market is under-pricing the risk of an imminent dovish pivot from the Fed and a July rate cut, earlier than the September meeting the market currently expects.
Looking ahead, beyond assessing the fallout from the weekend’s US bombing of Iran, US equity markets may begin to feel the impact of month-end and quarter-end rebalancing flows, which is suspected to involve selling US stocks and buying bonds.
On the data front, there will be keen interest in key data, including the Flash PMIs, durable goods, and the Fed’s preferred measure of inflation, the Core PCE price index, which is expected to rise by 2.6% year-over-year in May, from 2.5% in April.
The US rates market starts the week 75% priced for a -25bps Fed rate cut in September and there is a cumulative -50bp of Fed rate cuts priced in between now and year end.
With just over a week left to go before month end, the ASX200 has traded only a 238-point (2.8%) range in June, well below the 468 points (5.5%) range it has averaged over the prior nine months. This suggests there is room for a decent move this week, particularly as we approach EOFY, month and quarter end.
This week, the key event on the local economic calendar is Wednesday’s Monthly CPI indicator for May. Last month (April), the Monthly CPI indicator rose by 2.4% YoY, unchanged from the previous two months. The annual trimmed mean inflation measure edged up to 2.8% YoY in April from 2.7% prior.
Last month’s release was preceded a week earlier by the Reserve Bank of Australia (RBA) cutting its official cash rate by -25bp to 3.85%. The rate cut was widely expected after the Q1 2025 inflation report showed both trimmed mean and headline inflation fell back within the RBA’s 2-3% target range for the first time since Q4 2021.
The preliminary expectation for the Monthly CPI indicator for May is for headline inflation to ease to 2.3% in May from 2.4%, with trimmed mean expected to ease to 2.5% from 2.8%. The rates market starts this week pricing in a 78% chance of a -25bp RBA rate cut in July and a cumulative -73 bp of rate cuts between now and year end.
RBC Capital on the Middle East Extract
All eyes are now on the Iranian response following last night’s US B-2 airstrikes on the Fordow, Natanz, and Isfahan nuclear facilities.
While the situation remains very fluid, some Iranian officials have already made public threats to impede traffic in the Strait of Hormuz and have warned that Americans in the region could be targets of retaliatory action.
Just as we were repeatedly told that only the US had capability to disable Fordow, security officials maintain that it would be difficult for Iran to fully close the Strait of Hormuz for an extended period due to the position of the US Navy’s Fifth Fleet in Bahrain.
That said, multiple security experts contend that Iran has the ability to strike individual tankers and key ports with missiles and mines. Leading experts maintain the May 2019 attack on tankers off the coast of Fujairah, which occurred weeks after the US reimposed sanctions on Iran, were warning shots and not the ceiling of Iranian disruptive capabilities.
Based on our recent conversations in Washington, the IRGC could have sunk the tankers and/or done serious damage to the Port of Fujairah, just as they could have disrupted Abqaiq operations for months if that had been their intention.
We have already heard reports of substantial Iranian jamming of transponders in and around the Strait, causing QatarEnergy as well as Greek and British maritime shipping authorities to issue warnings about navigating those waters.
In the current environment, Iran may not have to do a very complex operation to cause companies to avoid the Strait. Hence, we do not believe it is a “full closure or nothing” scenario when it comes to the waterway, and Iran may deploy their asymmetric capabilities to raise the economic cost of the combined US/Israeli operations.
We were also told last week in Washington Iran retains enough short-range missiles to attack Gulf energy facilities and US bases in the region.
Any attack on US personnel would undoubtedly cross a clear Trump redline, though his energy tripwire is less discernible. What is different from 2019 is that Iran has normalized relations with its traditional Gulf rivals Saudi Arabia and the UAE. Saudi Arabia in particular has been publicly critical of the Israeli bombing campaign, expressing concerns about the US action and reiterating calls for de-escalation.
The key question is whether this diplomatic rapprochement has immunized the Kingdom and its neighbors from retaliatory action from Iran and proxies like the Houthis.
We also have to keep a close eye on the Iran-backed militias in Iraq that operate near the all-important Basra energy facilities. To be sure, these militias were reluctant to come to the aid of Bashar Al-Assad in Syria and may want to avoid anything that could lead them to the same fate as Hezbollah and Hamas.
And yet, if the Iranian leadership believes survival is at stake, it may exert serious pressure on the remaining proxies in Iraq and Yemen to provide much more material assistance. Hence, we do see a clear and present risk of energy attacks as it is one of the remaining ways the Iranian regime can impose costs on the West.
Iran could also conceivably try to downplay the damage to its nuclear program, citing, for example, the removal of centrifuges and uranium stockpiles before the US bombing commenced.
The Iranian leadership may try to avoid triggering another wave of US airstrikes while seeking to restore some deterrence capabilities. In such a scenario, Tehran might continue to focus their missiles on Israel exclusively and/or potentially withdraw from the Non-Proliferation Treaty to signal the potential existence of a covert weaponization effort.
The full damage report on Fordow is still pending, and the Bushehr reactor is still apparently operational (presenting a potential second path to plutonium production). There is also the issue of another purported undisclosed enrichment site
Hence, it may take a few days or even weeks to discern the Iranian response to this unprecedented attack on its nuclear facilities and key personnel. Above all, we would caution against the knee-jerk “the worst is behind us” hot take at this stage.
President Trump may indeed have successfully executed an “escalate to de-escalate” move, but a wider expansion cannot still be ruled out at this juncture. We may be in the Rumsfeld “unknown knowns” matrix in this nine-day Middle East military conflict.
Extract: Ed Yardeni: What’s Next?
The next move is up to the Iranians. Our bet is they will sue for peace. We are assuming while the Mullahs and their generals (those who haven’t been killed by the Israelis yet) may be fanatics, they aren’t crazy.
If that’s the case, then the price of oil should fall and stock markets around the world should climb higher. The price of gold is likely to fall in this scenario. But that should provide a good buying opportunity since many central banks around the world are diversifying their reserves into gold.
Interestingly, the Israel MSCI stock price index (in local currency) is up 2.6% to a new record high since Friday, June 13, when Israel launched a preemptive attack on Iran. The index is up 79.9% since October 27, 2023, which was 20 days after Hamas attacked Israel, killing approximately 1,200 Israelis and taking about 250 hostages.
Predicting geopolitical developments in the Middle East is a treacherous exercise. However, the Israeli stock market suggests we may be witnessing a radical transformation of the Middle East now that Iran has been de-nuked.
Iran has been the biggest state sponsor of terrorism in the Middle East, often using its lethal proxies in Gaza, Lebanon, Syria, and Yemen to do its dirty work. Under the country’s Mullahs, who seized power in 1979, Iran has been the sworn enemy of Israel, with a vocal commitment to destroy it, and has viewed the US as “the devil”.
Now, President Donald Trump may succeed in expanding his 2020 Abraham Accords, in which several Arab nations recognized Israel, to include Saudi Arabia and other Arab nations.
It currently includes the United Arab Emirates, Bahrain, Morocco, and Sudan. In an ideal outcome, the Mullahs’ regime would be overthrown in Iran, replaced by a new government that focuses on promoting domestic and regional prosperity rather than terrorism.
Iran could still be a spoiler if the Mullahs manage to stay in power or are replaced by a military dictatorship, either way resulting in a government that remains bitterly hostile to Israel and the United States. Such a government could prolong the war and create lots of havoc by attempting to close the Strait of Hormuz and by continuing to attack Israel and starting to target American interests in the Middle East.
That would cause oil prices to continue spiking higher, raising the odds of a global recession. Iran would still lose the war, in our opinion.
The bottom line for us as investment strategists is the bull market in the S&P500 that started in October 2022 remains intact. We are still targeting 6500 by the end of this year and 10,000 by the end of the decade.
We think the latest developments in the Middle East will end well for our “Roaring 2020s” scenario in the US sooner rather than later. Geopolitically, we think Trump has just re-established America’s military deterrence capabilities, thus increasing the credibility of his “peace through strength” mantra.
We note the consensus of industry analysts is turning more optimistic on the outlook for S&P500 forward earnings per share, which rose to a record high for the third week in a row through the June 19 week.
There had been a slight dip in forward earnings during the spring on concerns about Trump’s tariffs. But now, industry analysts seem to be thinking tariffs won’t weigh much on profits (and profit margins), if at all.
Corporate news in Australia
-Bain Capital may bd for Perpetual ((PPT)) to obtain the Corporate Trust business and bypass tax issues.
-Media reports suggest AMP Group ((AMP)) is looking to break up the company or divest the bank with a possible swap deal with Westpac’s ((WBC)) BT Panorama.
-Renewable energy developer Edify Energy is seeking a $3bn debt facility.
-AIS, a UK based designer, manufacture and installer of advanced materials for energy infrastructure, is seeking institutional investor support for its IPO.
On the calendar today:
-XX Global June PMIs
-PT ANEKA TAMBANG TBK ((ATM)) ex-div 5.73c
-FISHER & PAYKEL HEALTHCARE CORPORATION LIMITED ((FPH)) ex-div 22.15c
-METCASH LIMITED ((MTS)) earnings report
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 3385.70 | – 7.75 | – 0.23% |
| Silver (oz) | 36.02 | – 0.77 | – 2.09% |
| Copper (lb) | 4.83 | – 0.03 | – 0.54% |
| Aluminium (lb) | 1.16 | + 0.01 | 0.45% |
| Nickel (lb) | 6.70 | – 0.01 | – 0.10% |
| Zinc (lb) | 1.20 | 0.00 | 0.00% |
| West Texas Crude | 74.93 | + 1.69 | 2.31% |
| Brent Crude | 75.48 | – 0.60 | – 0.79% |
| Iron Ore (t) | 94.77 | + 0.06 | 0.06% |
The Australian share market over the past thirty days
| Index | 20 Jun 2025 | Week To Date | Month To Date (Jun) | Quarter To Date (Apr-Jun) | Year To Date (2025) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8505.50 | -0.49% | 0.84% | 8.44% | 4.25% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| CNI | Centuria Capital | Upgrade to Hold from Sell | Bell Potter |
| Upgrade to Neutral from Sell | UBS | ||
| COF | Centuria Office REIT | Upgrade to Neutral from Sell | UBS |
| Downgrade to Sell from Hold | Bell Potter | ||
| COH | Cochlear | Upgrade to Buy from Neutral | UBS |
| CQR | Charter Hall Retail REIT | Downgrade to Neutral from Buy | UBS |
| EOS | Electro Optic Systems | Downgrade to Accumulate from Buy | Ord Minnett |
| FMG | Fortescue | Downgrade to Neutral from Buy | Citi |
| HDN | HomeCo Daily Needs REIT | Downgrade to Neutral from Buy | UBS |
| IGO | IGO Ltd | Downgrade to Neutral from Buy | Citi |
| LLC | Lendlease Group | Upgrade to Neutral from Sell | UBS |
| LTR | Liontown Resources | Downgrade to Sell from Neutral | Citi |
| OML | oOh!media | Upgrade to Buy from Neutral | UBS |
| PLS | Pilbara Minerals | Downgrade to Neutral from Buy | Citi |
| PTM | Platinum Asset Management | Upgrade to Hold from Sell | Bell Potter |
| VCX | Vicinity Centres | Downgrade to Sell from Neutral | UBS |
For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.
All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available on the FNArena website. Click here. (Subscribers can access prices on the website.)
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CHARTS
For more info SHARE ANALYSIS: AMP - AMP LIMITED
For more info SHARE ANALYSIS: ATM - PT ANEKA TAMBANG TBK
For more info SHARE ANALYSIS: FPH - FISHER & PAYKEL HEALTHCARE CORPORATION LIMITED
For more info SHARE ANALYSIS: MTS - METCASH LIMITED
For more info SHARE ANALYSIS: PPT - PERPETUAL LIMITED
For more info SHARE ANALYSIS: WBC - WESTPAC BANKING CORPORATION