Overnight – Investor optimism on …. everything, pushes stocks to fresh highs
Records everywhere overnight as investors optimism on everything from rate cuts to AI to Global trade had investors piling into the equity market
The U.S. and China made substantial progress toward resolving their trade dispute over the weekend by agreeing on the framework of a deal. U.S. Treasury Secretary Scott Bessent confirmed that the outline effectively removed the risk of President Donald Trump imposing 100% tariffs on Chinese imports starting November 1. The framework, expected to be finalized when President Trump meets Chinese President Xi Jinping later this week, has lifted market confidence by reducing fears of a fresh escalation. The breakthrough came on the sidelines of ASEAN meetings in Malaysia, with the finalized agreement potentially marking a significant step toward normalizing global trade relations.
Investor sentiment improved further ahead of the Federal Reserve’s policy meeting on October 29, after September’s U.S. inflation data came in softer than expected. Markets have now priced in a 25-basis-point rate cut, with expectations of more easing into early 2026. Analysts from ING forecast additional rate reductions in December and early next year. Despite the improving trade outlook, easing inflation reinforced the view that the Fed will continue to support economic growth through monetary stimulus. Meanwhile, gold prices fell sharply as easing trade tensions reduced demand for safe-haven assets, though expectations of looser policy helped limit the downside.
In the corporate sector, Qualcomm surged over 11% after launching a new AI chip designed to challenge Nvidia and AMD, ahead of the Nvidia GTC event in Washington this week. Investor attention now turns to key tech earnings, with Microsoft, Meta, and Alphabet reporting midweek, followed by Apple and Amazon later. Reports indicate Amazon is preparing to cut around 30,000 corporate jobs as it refocuses spending. Broader commodity markets reflected improving trade optimism: silver and platinum eased, while copper prices rose to record highs amid tight global supply and the ongoing shutdown of Freeport’s Grasberg mine in Indonesia.
ASX Overnight: SPI 9041 (-0.40%)
The Day Ahead:
The rally currently like a train without a station and there is no reason to get in the way until later this week. Most of the positivity was already in US futures when we shut
Yesterdays Session:
The Australian sharemarket rose on Monday, lifted by hopes of a U.S. Federal Reserve rate cut and progress in U.S.-China trade talks. The S&P/ASX 200 gained 0.4% to 9058.4, with most sectors advancing, led by industrials, financials, and technology. Major banks climbed around 1%, tech stocks rallied, and industrials outperformed with Qantas up 3.5%. In contrast, rare earths producers slumped after recent gains, while Nuix and Ramelius Resources fell sharply and PolyNovo rose despite leadership changes.
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