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Wall Street started the new trading week significantly higher as investors welcomed the temporary progress in trade talks between China and the US. The Dow Jones rose 2.81%, the S&P500 climbed 3.26% and the tech-heavy Nasdaq ended the day up 4.35%. Shares in companies that rely on production and supply chain elements from China like Tesla, Apple and Nvidia had investors buying in on Monday with each rising over 5%.

The latest update from the China and US trade talks is that both nations have agreed to cut their respective tariffs on one another for 90-days, with tariffs on Chinese imported goods into the US to be 30% and tariffs on US good into China to be 10% for the period.

In Europe overnight, markets also closed higher in the region as global investors welcomed progress on the global trade front. The STOXX 600 rose 1.1%, Germany’s DAX climbed 0.2% to another fresh record high, the French CAC added 1.4% and, in the UK, the FTSE100 ended the day up 0.6%.

Across the APAC region on Monday, markets rallied after the US and China temporary trade deal was unveiled. Hong Kong’s Hang Seng rose 2.98%, China’s CSI index climbed 1.16%, India’s Nifty 50 gained 3.5%, and Japan’s Nikkei ended the day up 0.38%.

Locally to start the week, the ASX200 posted a 0.03% rise to start the new trading week as weakness among pharmaceutical stocks weighed on strong gains for the big miners amid progress in talks between China and the US.

Trump’s latest pharmaceutical tariff announcement hit locally listed healthcare providers hard this week with Botanix, Neuren, Telix and Clarity all dropping over 5% on Monday. Trump’s latest move in the healthcare space is that he wants to cut the price of prescription drugs which will in-turn hurt the margins made by any pharmaceutical producer selling their treatments in the US.
As progress talks between the US and China continue to make headway, safe-haven stocks were on the chopping block yesterday as market uncertainty begins to ease. Gold stocks retreated with Evolution Mining, Northern Star Resources and Genesis Minerals each fell over 3%.

What to watch today:

• On the commodities front this morning oil is trading 1.61% higher at US$62/barrel, gold is down 2.65% at US$3236/ounce and iron ore is up 1.22% at US$99.75/tonne.
• The Aussie dollar has weakened against the greenback overnight to buy 63.70 US cents, 94.53 Japanese Yen, 48.57 British Pence and 1 New Zealand dollar and 9 cents.
• Ahead of Tuesday’s trading session here in Australia the SPI futures are anticipating the ASX will open the day up 1.17% tracking global market strength overnight.

Trading Ideas:

• Bell Potter has raised the 12-month price target on REA Group (ASX:REA) from $264 to $267 and maintain a buy rating on the leading online real estate platform following the release of the company’s Q3 update including double-digit revenue growth, and strong yield growth which is set to continue amid the rate cut outlook.
• Trading Central has identified a bearish signal on Technology One (ASX:TNE) following the formation of a pattern over a period of 25-days which is roughly the same amount of time the share price may fall from the close of $31.62 to the range of $23.25 to $24.75 according to standard principles of technical analysis.