Wall Street started the new trading week with a strong rebound after President Trump said trade relations with China will be fine, a few days after threatening massive tariff increases on the region. Investor sentiment eased and stocks surged as a result of Trump’s message to start the new trading week higher. The S&P 500 added 1.56% on Monday while the Nasdaq climbed 2.21% and the Dow Jones ended the day up 1.29%.

In Europe on Monday markets closed higher led by a mining rally as investors keep an eye on trade negotiations between the US and China. The STOXX 600 rose 0.44%, Germany’s DAX added 0.6%, the French CAC climbed 0.21% and, in the UK, the FTSE100 ended the day up 0.16%.

Across the Asia region on Monday markets closed lower as investors pulled back amid trade tension uncertainty between the world’s largest two regions. China’s CSI index fell 0.5%, Hong Kong’s Hang Seng fell 2.04%, Japan’s Nikkei lost 1.01% and South Korea’s Kospi index ended the day down 0.72%.

Locally to start the new trading week, investor sentiment was dented by Wall Street’s Friday tumble and Trump’s renewed tariff threats, which led to a broad sell-off on the ASX to start the new week with the key index ending the day down 0.94% in the worst session since mid-September.

Gold scaled to a fresh record high again on Monday amid renewed macro and trade uncertainty which fuelled a buying frenzy among the gold miners on Monday with Northern Star (ASX:NST) and Ramelius Resources (ASX:RMS) rising over 1% each while Regis Resources (ASX:RRL) soared over 7%.

Treasury Wine Estates (ASX:TWE) tumbled over 11% on Monday after the wine maker scrapped earnings guidance due to weaker-than-expected trading in China, with the company also halting its $200m share buyback which signals elevated trading uncertainty.

Margin contraction hurt Fletcher Building (ASX:FBU) on Monday with shares in the company falling almost 2% after a trading update unveiled margin contraction in its heavy building materials volumes.

What to watch today:

• On the commodities front this morning oil is trading 2.41% higher at US$59.64/barrel gold is up 2.3% at US$4105/ounce and iron ore is up 0.84% at US$105.74/tonne.
• The Aussie dollar has strengthened against the greenback to buy 65.21 US cents, 99.27 Japanese yen, 48.96 British pence and 1 New Zealand dollar and 14 cents.
• Ahead of Tuesday’s trading session the SPI futures are anticipating the ASX will open the day up 0.3% tracking Wall Street’s gains overnight.

 Trading Ideas:

• Bell Potter has raised the 12-month price target on COG Financial (ASX:COG) from $2.25 to $2.70 and maintain a buy rating on the diversified conglomerate of Australian distribution businesses following the announcement that the company will acquire a non-controlling interest in its subsidiary Fleet Network for a consideration of $23.9m.
• And Trading Central has identified a bearish signal on SGH (ASX:SGH) following the formation of a pattern over a period of 16-days which is roughly the same amount of time the share price may fall from the close of $47.80 to the range of $46.60 to $46.90 according to standard principles of technical analysis.