The Monday Report – 15 June 2026

Array
(
    [0] => Array
        (
            [0] => ((ASX))
            [1] => ((DXS))
            [2] => ((SIG))
            [3] => ((OML))
            [4] => ((VEA))
        )

    [1] => Array
        (
            [0] => ASX
            [1] => DXS
            [2] => SIG
            [3] => OML
            [4] => VEA
        )

)

This story features DEXUS, and other companies.
For more info SHARE ANALYSIS: DXS
The company is included in ASX100, ASX200, ASX300 and ALL-ORDS

US indices finished higher last week, supported by the successful SpaceX IPO and growing optimism around a ceasefire between the US and Iran.

Reports on Monday morning (AEST) indicate a peace deal has now been confirmed, sending US crude futures down -4.8% to US$80.80/bbl.

US equity futures are trading higher on the news.

The ASX200 surged 2% on Friday, while futures were already pointing to a positive start before the ceasefire announcement.

Good Morning,

The ASX200 rose 171 points or 2% higher on Friday, with Miners rising 4%. Energy lagged.

Sentiment was boosted by ongoing softer domestic data last week, which has resulted in some major bank economists calling an end to the RBA’s tightening cycle — supporting the interest rate sensitive ASX200. 

ANZ Bank is the latest after National Australia Bank stated on Friday “We expect the RBA to leave the cash rate at 4.35% following its Monetary Policy Board meeting next week. But, in a change in call, we now forecast two 25bp rate cuts in the second half of 2027.”

In further positive news, just announced and which was touted at the end of the last week, Pakistan Shehbaz Sharif has announced on X:

“Following intensive talks, we are pleased to announce that the Peace Deal between the United States of America and Islamic Republic of Iran has been REACHED…the official signing ceremony will be on Friday 19 June in Switzerland” 

Today’s Big Picture, J.L.Bernstein

The Pop Happened, The Rotation Didn’t

SpaceX opened above its IPO price and kept climbing past US$2 trillion, making it worth more than Musk’s other company, Tesla, on its first day.

The morning worry was that investors would sell Nvidia and the other AI names to free up cash for SpaceX.

That selling mostly didn’t show.

The Iran Deal Is Down To The Signing

Pakistan, the country mediating this, says both sides now have a final agreed text.

Oil has been carrying an extra cost for months on the risk this conflict spreads, and that cost kept bleeding out today, leaving crude near the low eighties.

Consumer Sentiment Came Off The Floor

The University of Michigan’s confidence survey climbed in early June after two straight record lows.

Cheaper gas did most of the work, and lower income households felt it most since fuel eats more of their budget.

When people feel better, they spend, and spending is what drives the economy.

ANZ Bank, Australian Morning Focus extract

Equity markets gained and oil fell on reports that a memorandum of understanding between the US and Iran will be signed imminently.

The S&P500 closed 0.5% higher; the EuroStoxx50 was up 2.2% and the FTSE100 was up 1.6%.

The yield on the US 10y Treasury note rose 1.8bp to 4.48%. The active WTI future fell -3.2% to US$84.9/bbl. Gold rose 3.2% to US$4,219.3/oz. 

University of Michigan consumer sentiment recovered in June, while inflation expectations moderated, aligning with the fall in gasoline prices seen in recent weeks.

Headline sentiment rose 4.1pts to 48.9, as both the current conditions and expectations indexes improved, but the index remains exceptionally weak relative to history.

One-year-ahead inflation expectations eased -0.2ppt to 4.6%, while 5–10- year-ahead ahead expectations fell -0.5ppt to 3.4%, only just above the 3.3% read in February, prior to the Middle East conflict’s escalation.

June RBA Meeting Preview, MFS Investment Management, Carl Ang

We expect a hawkish hold from the RBA at the June meeting (Tuesday June 16) with the possibility of dissenting votes for a rate hike.

The RBA baseline is for prolonged stability at the current 4.35% policy rate with risks to the outlook still tilted to the upside.

Potential triggers for further tightening include underlying inflation persistence above the RBA’s target as well as growth resilience like labour market stability or a consumer spending rebound.

However, these kinds of developments seem unlikely at this stage with the Australian economy softening prior to the US-Iran conflict after three consecutive RBA rate hikes in 2026.

This may be compounded by the Federal budget’s tax policy changes targeting wealth which went beyond initial expectations.

In Q1 26 GDP was supported heavily by data centre spending and we have seen softening in housing prices and some Q2 26 business survey indicators more recently.

Looking further ahead, 2H 2027 seems like the earliest for RBA rate cuts but given recent inflation overshooting any rate reductions are likely to be measured and towards neutral levels likely more than 3.5%.

Is any area of the market “affordable”? Francis Gannon, Royce Investment Partners

The word seems to be spreading that small- and micro-cap stocks have so far been enjoying a stellar 2026.

What seems less well known is that the current cycle of market leadership for the two asset classes stretches back to 2025 and has been in place for 14 months.

After more than a decade that saw mostly positive performance that nonetheless consistently lagged large- and mega-cap stocks, small- and micro-cap stocks have been on a tear since last April.

For example, for the one-year period ended May 31, 2026, the small-cap Russell 2000 Index was up 43.1%, and the Russell Microcap Index advanced 62.5% versus respective gains of 28.8% and 29.3% for the large-cap Russell 1000 Index and the mega-cap Russell Top 50 Index.

Results off the US market low in early April of last year have been even more impressive. From April 8, 2025 to June 8, 2026, the Russell2000 gained 64.6%. The Russell Microcap did even better, notching a 91.1% increase, compared to a 50.3% return for the Russell1000 and 51.1% for the Russell Top 50.

One question is whether or not these robust performances over the last several months have made small- and micro-cap stocks a little too expensive, especially for investors who may just now be trying to make decisions about their equity investments.

It’s certainly an understandable concern, particularly when barely a day goes by without a warning about a bubble in equity prices. We saw the last round of worrying at the end of last week’s deep and sudden sell off.

In addition, a number of market observers have been drawing parallels between the current AI-driven rally and the Internet bubble of 2000-2001. We would understand, then, why some investors might hesitate before deploying any more capital in US stocks.

Perhaps unsurprisingly given our position as experienced small-cap specialists (along with our often contrarian nature), we have a decidedly different point of view.

Importantly, our view is grounded in data—specifically our preferred index valuation measure (which we use when evaluating individual companies as well): EV/EBIT, or enterprise value over earnings before interest and taxes.

Valuations for small-cap versus large-cap, even after more than a year of robust returns, were still close to their lowest levels versus the Russell1000 in 25 years at the end of May.

In light of how well micro-caps have done, we ran the same data for the Russell Microcap versus the Russell1000 to see if the picture was appreciably different. What we found, however, shows that micro-caps finished May still below their long-term average versus the large-cap index.

We then looked at valuations for the three indexes at the level of style to see if value or growth were significantly cheaper or more expensive than their long-term EV/EBIT averages.

What we found was that small- and micro-cap value and micro-cap core are the cheapest segments of the US equity market and that these segments are either just below or slightly above their 25-year average valuation; while all three value segments have somewhat similar 25-year average valuations, their current valuations are vastly different; and overall large-cap valuations still have a long way to fall to reach their 25-year average valuations.

Of course, relatively attractive valuations are seldom enough to keep an asset class in a leadership position. Earnings growth is what ultimately drives long-term returns—and the news remains positive on this front as well, with earnings fundamentals continuing to improve for many small- and micro-cap companies.

More and more smaller businesses are emerging from a multi-year earnings recession, and consensus estimates are pointing to faster earnings growth ahead (as they have for several months).

Equally important, most of our investment teams are enjoying a sweet spot between seeing many holdings perform well while also finding what they think are excellent long-term opportunities in the wide and diverse selection universe that encompasses small- and micro-cap stocks.

To this point, we think it’s important to note that, while much is made of the fact that more than 40% of the companies in the Russell2000 have no earnings, the small- and micro-cap universe still has more profitable companies than the Russell1000 or S&P500 Indexes.

This combination of more attractive valuations and ongoing earnings strength informs our conviction that the current environment continues to offer many compelling opportunities for active, fundamentals-driven investors with a long-term horizon.

Stay tuned..

Corporate news in Australia:

• ASX ((ASX)) is to pay -$20m to ASIC and -$3m in corporate costs for misleading the regulator on its Chess development
• Foxtel has emerged as a bidder for NRL broadcast rights in a multibillion-dollar media rights battle that could reshape the sport’s future broadcasting arrangements
• A court has cleared the way for Dexus ((DXS)) to proceed with the forced sale of its $4.5bn airport stake as part of an ongoing dispute involving APAC investors
• Saint-Gobain is seeking to exit its shareholding in the Tomago aluminium smelter as it reviews its portfolio and capital allocation priorities
• Sigma Healthcare ((SIG)) has abandoned plans to pursue a GBP10bn takeover of Boots
• The deadline for a potential takeover of oOh!media ((OML)) has passed without a decision, leaving the future of any transaction uncertain
• Sharon AI is seeking $1bn in funding to support a planned deal involving Nvidia technology and AI infrastructure expansion
• Viva Energy ((VEA)) is considering a sale-and-leaseback of its petrol station network to unlock capital while retaining operational control of the sites
• Renewable energy developer Someva is seeking an investor for a diversified renewables portfolio anchored by the Pottinger wind project
• Fresh produce supplier Comfresh has launched plans for an approximately $150m IPO to fund growth and expansion in the Australian produce market

On the calendar today:

-EZ April Ind Prod’c

-US May Ind Prod’n

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

The Australian share market over the past thirty days…

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.)

(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author’s and not by association FNArena’s – see disclaimer on the website)

All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts on the website and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.

Find out why FNArena subscribers like the service so much: “Your Feedback (Thank You)” – Warning this story contains unashamedly positive feedback on the service provided. www.fnarena.com

FNArena is proud about its track record and past achievements: Ten Years On

Click to view our Glossary of Financial Terms