The Big Picture
Australian equities finished last week on a strong note, with the S&P/ASX 200 rallying 2.0% on Friday as sentiment improved on expectations of a resolution to the US-Iran conflict. Gains were broad-based, led by materials and financials, lifting the index to close out what had been a volatile week.
As of Monday morning, 15 June, those expectations appear to have materialised. The US and Iran have agreed to a peace deal, committing to an immediate ceasefire, the removal of the US naval blockade and the reopening of the Strait of Hormuz.
Global markets had already started to reflect this shift, with US equities rallying late in the week. Small caps led the advance, supported by easing oil prices.
The highly anticipated initial public offering (IPO) of SpaceX (NASDAQ: SPCX), Elon Musk’s rocket and satellite company, was also a focus in the week, culminating in a record-sized IPO on Friday.
US consumer prices rose at the fastest annual rate of 4.2% in over three years in May, according to data from the Bureau of Labor Statistics.
Looking ahead, focus will return to macroeconomic data and central bank policy, with several rate decisions due including the US Federal Reserve, Bank of England and Reserve Bank of Australia (RBA). Market expectation suggests the RBA will hold the cash rate steady at 4.35% tomorrow following its May increase, as markets assess the outlook for growth and inflation.
Read our submission concerning the Government’s changes to capital gains tax
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We recently lodged a submission to The Senate Economics Legislation Committee on Treasury Laws Amendment (Tax Reform No.1) Bill 2026 and Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026. In our submission, we state that Wilson Asset Management has no objection to the tax reform of unproductive assets such as housing. We object to the punishment of productive capital in a manner that discourages investment, entrepreneurship and economic growth. Reforms should not penalise Australians who invest in businesses, support innovation and help grow the economy by increasing productivity. You can read our submission here. |
Macro in a minute: Unstable pricing dynamics in emerging markets
Volatility is a key measure of market risk, showing how sharply share prices are expected to move and how unsettled investors are feeling. Typically, higher expected volatility reflects greater caution and a more fragile backdrop for returns.
That is what makes current conditions in parts of emerging markets unusual. Markets such as Korea and Taiwan have continued to perform strongly, supported by investor enthusiasm around artificial intelligence (AI) and the companies exposed to that theme. At the same time, however, measures of expected volatility in emerging markets have risen sharply.
The VXEEM, a widely watched measure of expected volatility in emerging market equities, has recently moved well above the VIX, which tracks expected volatility in the US sharemarket. In simple terms, investors appear far more nervous about emerging markets than the US, even as some emerging market indices continue to rise.
That divergence matters because it suggests the rally in parts of emerging markets may be more fragile than headline performance implies. Korea and Taiwan have benefited from strong investor demand for AI exposure, but when markets are rising at the same time as expected volatility is climbing, it can be a sign that confidence is becoming less secure. If sentiment toward the AI theme weakens, these markets could be vulnerable to a sharper pullback, with potential flow-on effects for commodities such as copper that are tied to the AI buildout. However, if the underlying AI investment cycle remains intact, any near-term volatility may prove temporary rather than structural.
In the media
Stock Watch
Nick Scali (ASX: NCK) is a leading Australian and emerging UK furniture retailer. The WAM Capital (ASX: WAM), WAM Microcap (ASX: WMI), WAM Research (ASX: WAX) and WAM Active (ASX: WAA) investment team recently visited its new stores in the UK and met with local management. This reaffirmed our confidence in the UK growth opportunity, supported by a healthy new store pipeline. Whilst Australia and New Zealand trading conditions are currently subdued, we expect Nick Scali will outperform peers through the cycle. Its property backing and strong balance sheet positions it well relative to competitors.
Electric vehicle (EV) adoption in Australia continues to accelerate, with EVs representing a record 14.6% of new vehicle sales in March 2026. Home charging also remains central to that shift, with 93% of Australian EV owners able to charge at home and 85% having charged at home in the previous week, according to the 2025 EV Ownership Survey released by the Electric Vehicle Council and the University of Sydney’s Institute of Transport and Logistics Studies. Against that backdrop, demand for at-home charging solutions should remain well supported as EV adoption becomes more mainstream. Evnex, held through investment partner Adamantem Capital, is a leading New Zealand-based manufacturer and distributor of smart, fast electric vehicle chargers, and has continued to build its presence in the Australian market as growth in the sector continues. Evnex is a private equity holding in the WAM Alternative Assets (ASX: WMA) investment portfolio.
Register for the WAM Income Maximiser Investment Portfolio Update and Q&A Webinar |
Please register for the WAM Income Maximiser (ASX: WMX) Investment Portfolio Update and Q&A Webinar on Thursday, 18 June 2026 at 2:30pm (Sydney time). Lead Portfolio Manager Matthew Haupt and Portfolio Strategist Damien Boey will discuss the investment portfolio positioning, broader market conditions and the latest RBA announcement, before answering shareholder questions.
Register for Future Generation’s upcoming webinar – ‘What’s next for the Australian economy?”
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On Thursday, 25 June 2026 at 2:30pm (Sydney time), Future Generation are hosting an exclusive Q&A forum with Dr Philip Lowe, Chair of Future Generation Australia (ASX: FGX) and Jennifer Westacott AC, Chair of Future Generation Global (ASX: FGG). Lee Hopperton, Future Generation Chief Investment Officer will share an update on the investment portfolios and moderate the session. From AI advancements to economic policy and productivity, we’ll be discussing what’s next for the Australian economy. Please submit your questions for the webinar and register here. |
You asked, we answeredWhat is the process for an investor to update the contact details associated with their holdings on your share registry? If you have a broker-sponsored shareholding (CHESS Sponsored), updating investor details through your sponsoring broker will ensure that changes are reflected across each registry, and against all investments connected to your Holder Identification Number. If your shares are Issuer Sponsored, or if you wish to manage your registered details directly, please visit the investor center of our share registry, Boardroom Pty Limited, InvestorServe |
Index returns performance table
