SmallCaps Weekly Wrap & New Fundie Picks

Week ending Friday, 12 June 2026

The Week That Was

A week that began under the shadow of Middle East escalation ended with the market’s strongest session in more than a month. The S&P/ASX 200 closed Friday at 8,804.0 after adding nearly 200 points across the final three sessions, as falling bond yields, fading rate-hike expectations and hopes of a US/Iran peace agreement saw investors rotate decisively back into risk.

Five New Stock Picks: Positioning for the Rebalance

With the June index rebalance locked in and the backdrop shifting in favour of quality growth stocks, bond yields at three month lows, the RBA expected to hold next week, and the market rewarding profitable, capital light business models over speculative capex stories, we are adding five names to our focus list as the Market rotates away from financials and materials and into Health Care and Tech.

Why Health Care? The first is valuation. After years of underperformance, many healthcare companies are trading well below previous highs despite retaining strong competitive positions and global revenue streams.

The second is earnings visibility. Investors increasingly value businesses capable of delivering predictable financial performance regardless of macroeconomic conditions. Healthcare fits that description remarkably well.

The third is relative insulation from energy shocks. While no industry is completely immune to rising energy costs, healthcare businesses generally face far less exposure than transport operators, manufacturers, construction firms or airlines.

Most importantly, healthcare appears well suited to the type of environment the bond market is currently signalling.

Pro Medicus (ASX:PME) A world-class healthcare technology champion. Its Visage imaging platform is the trusted choice of North America's largest health providers, and the latest half delivered revenue up 28.4%, profit up 31.9%, a debt-free balance sheet with over $180 million in cash, and a string of major US contract wins providing rare visibility over future earnings.

Telix Pharmaceuticals (ASX:TLX) A healthcare growth story entering a new phase. The radiopharmaceuticals leader has already crossed into commercial scale through Illuccix and Gozellix, with FY25 revenue up 56% to US$803.8 million, positive adjusted EBITDA, and FY26 guidance of US$950 to 970 million defensive healthcare exposure paired with genuine earnings momentum.

TechnologyOne (ASX:TNE) The compounder that keeps delivering. Mission-critical enterprise software for government, universities and healthcare makes switching costly and retention exceptional. Annual recurring revenue rose 17% to $598 million, the UK expansion is gaining traction, and management is targeting $1 billion in recurring revenue by FY30.

Life360 (ASX:360) Building the digital operating system for modern families. Quarterly revenue jumped 38% to US$143.1 million across subscriptions and advertising, monthly active users reached roughly 97.8 million, paying circles climbed 27% to 3 million, and full-year guidance was upgraded growth that runs independent of rates, inflation and commodity prices.

SiteMinder (ASX:SDR) The quiet global leader powering hotel commerce. Its platform runs bookings, pricing, distribution and payments for tens of thousands of properties across more than 150 countries, with annual recurring revenue growing around 24%, operating leverage improving, and penetration of the global hotel market still low a long runway largely untouched by the macro noise.

Follow me on LinkedIn for More Insights and Updates: www.linkedin.com/in/markelzayed

Australian Markets

The local market told a story in three acts. Wednesday’s 0.57% gain to 8,653.3 was driven by a handful of spectacular movers. Steadfast Group (ASX:SDF) surged 35.32% to $5.35 on insurance consolidation enthusiasm, one of the largest single-day advances on the ASX this year, dragging AUB Group (ASX:AUB) up 9.95% and with Reece (ASX:REH) adding 9.90% as a housing proxy. Beneath the surface, however, breadth was decisively negative, with 803 fallers against just 386 risers, and resources were sold hard: Liontown (ASX:LTR) fell 8.21%, Yancoal (ASX:YAL) 7.03% and Paladin (ASX:PDN) 6.65%.

Thursday brought a modest 0.23% dip to 8,633.2 as fresh US strikes on Iran kept risk appetite subdued. Technology led the declines (-2.24% as a sector, with NEXTDC (ASX:NXT) down 4.36% amid the global AI capex rethink), while investors paid up for defensive earnings, CSL (ASX:CSL) climbed 4.73% to $107.82, Tuas (ASX:TUA) topped the index with a 6.27% gain, and Liontown began its recovery, up 4.46%.

Friday changed the complexion of the week entirely. The index surged 1.98% to 8,804.0, its highest level in more than a month, with nine of eleven sectors higher, Materials leading at +4.06%, and breadth flipping firmly positive (768 advancers to 398 decliners). Genesis Minerals (ASX:GMD) jumped 11.04%, Liontown completed a remarkable round trip from $1.90 on Wednesday to $2.19 by Friday’s close, up 10.33% on the day and A2 Milk (ASX:A2M) rose 9.82% on China consumer optimism. Not everything joined in: REA Group (ASX:REA) slid 3.07% to a fresh 52 week low and News Corp (ASX:NWS) gave back 4.71%.

The bigger story sat in the bond market. Australia’s 10-year yield ended the week near 4.8%, around three month lows, as the odds of an August rate hike collapsed to roughly 35% from above 80% only a month ago and a move at next week’s RBA meeting was effectively priced out. Consumer inflation expectations eased to 5.5%, the lowest since March, and April’s CPI slowed to 4.2%, though trimmed mean inflation at 3.4% remains the sticking point ahead of the pivotal May CPI on 24 June. The Australian dollar touched nine-week lows below US70.5c midweek before steadying around US$0.70, and the local VIX finished at 12.99 volatility easing even as headlines stayed noisy.

International Markets

Wall Street whipsawed. Midweek brought heavy selling (Dow -1.87%, S&P 500 -1.62%, Nasdaq -1.98%) as Oracle’s plan to raise an additional US$20 billion for AI expansion which sent its shares down more than 10% after hours reignited the debate over the enormous capital requirements behind the AI build-out. Semiconductors stayed violent, with the iShares Semiconductor ETF dropping more than 3% after a 6% surge earlier in the week. By Thursday the mood had reversed: the Dow climbed 1.86%, the S&P 500 1.75% and the Nasdaq 2.54% as geopolitical fears eased, while the marquee event SpaceX’s IPO priced at US$135 per share, raising roughly US$75 billion at a valuation approaching US$1.78 trillion. One complication: US May CPI ran at its fastest annual pace in more than three years on surging energy costs, and traders have a December Fed hike fully priced.

China sent mixed signals. Producer price inflation accelerated to 3.9%, the strongest since July 2022, while consumer inflation held at just 1.2% a margin-squeeze combination that weighed on mainland equities early in the week before Friday’s rebound (Shanghai +0.8%, Shenzhen +1.3%) led by semiconductor and precious metals names. The next catalyst is China’s lending data, following last month’s unexpectedly weak credit figures.

The geopolitical arc defined everything. The week opened with the US accusing Tehran of downing an American helicopter and the Strait of Hormuz near-fully closed; it ended with President Trump flagging a possible peace agreement as early as this weekend and Iranian sources reportedly open to a proposed framework.

Commodities Markets

Oil completed a round trip. Crude traded near US$88 on Wednesday, firmed towards US$91 on Thursday as inventories tightened further API data showed a 9.1 million barrel draw and the EIA confirmed a 7.2 million barrel decline, the seventh consecutive weekly fall before retreating sharply to around US$86 on Friday, a near two-month low, as peace prospects deflated the geopolitical premium. Brent finished the week near US$88.40.

Gold spent the week consolidating in the US$4,100 4,200 range, with rate expectations dominating safe-haven flows early before the metal steadied to close near US$4,179 still historically elevated and retaining the bulk of its advance. That backdrop continues to underwrite exceptional margins for domestic gold producers, which is precisely why names like Genesis Minerals led Friday’s rally. Elsewhere, iron ore held steady around US$101.60, copper firmed into the close, and spot lithium extended its recovery supporting the renewed bid in lithium equities.

Outlook For Next Week

The RBA’s policy decision headlines the domestic calendar. A hold is widely expected, with the market now seeing the cash rate peaking at 4.35%, the focus will be on how the Board weighs energy driven inflation risk against clear signs of cooling activity. Offshore, China’s industrial output and retail sales land Tuesday, UK CPI and US retail sales follow Wednesday, and the Federal Reserve’s decision arrives early Thursday morning AEST, with December hike pricing in focus after the hot May CPI print.

The decisive domestic input, however, remains the May CPI on 24 June. The Middle East is the wildcard in both directions: any formalisation of a US-Iran agreement over the weekend could extend the risk rally and push oil and yields lower still, while a breakdown would likely see Friday’s optimism unwind quickly given the Strait of Hormuz remains constrained.

Technically, support lifts to 8,600 with resistance at 8,900. A clean break above 8,900 opens the path back towards the highs; 8,600 is the level to watch on any geopolitical disappointment.