Wall Street fell on Monday amid rising oil prices and escalating tensions in the Middle East. The Dow Jones fell 0.94%, the S&P500 fell 0.96% and the Nasdaq ended the day down 1.18%. The benchmark 10-year treasury yield rose 3 basis points to 4.01%, marking the first time that the yield has topped 4% since August.

US stocks failed to extend their rally from Friday following the release of a stronger-than-expected jobs report out in the region boosting confidence of a soft landing through economic stability while inflation eases and the Fed continues its rate cut plans.

Across European markets overnight, markets closed mostly higher in the region ahead of key economic data out throughout this week. The STOXX 600 rose 0.17%, Germany’s DAX fell 0.09%, the French CAC added almost half a percent and, in the UK, the FTSE100 ended the day up 0.28%.

Across the Asia region on Monday, markets closed higher ahead of three key rate decisions out of central banks in the region this week. Japan’s Nikkei led the gains with a near 2% rise while Hong Kong’s Hang Seng rose 1.6%, South Korea’s Kospi Index rose 1.58% and China’s CSI index remained closed for the Golden Week holiday.
 
The local market started the new trading week with a light trading session amid the Labour Day holiday in NSW, but shares still managed to end the day 0.7% higher, just 7 points shy of the latest record close set in September.

Investors fought to buy Arcadium Lithium shares yesterday sending the lithium miner’s share price soaring 46% after Rio Tinto confirmed it was in takeover talks with Arcadium. Rio Tinto shares fell 2.5% on Monday.

The Arcadium rally boosted fellow lithium miners like Liontown Resources which rose 18%, Sayona Mining which climbed 13% and Core Lithium which added 8.7% as investors see the big mining giant’s interest in lithium as a recovery outlook for the leading green commodity.

The recent rebound in the price of iron ore spilled into this week which boosted the big iron ore giants again on Monday with BHP and Fortescue adding 0.6% and 3% respectively at the end of Monday’s session. Speculations are circulating that further economic stimulus will be revealed out of China this week as the region puts in place material efforts and stimulus to reignite economic growth and expansion.

What to watch today:

• Ahead of Tuesday’s trading session locally, the SPI futures are anticipating the ASX to open the day down 0.05% tracking Wall Street’s losses overnight.
• On the commodities front this morning, oil has jumped 3.42% overnight to trade at US$76.92/barrel on escalating tensions and supply concerns out of the Middle East, gold is down 0.2% at US$2648/ounce, and iron ore is up 0.5% at US$108.84/tonne.
• The Aussie dollar has weakened against the greenback overnight to buy US$0.67 cents, 100.10 Japanese Yen, 51.86 British Pence and NZ$1.10.

Trading Ideas:

• Bell Potter has increased the 12-month price target on Light & Wonder (ASX:LNW) and maintain a buy rating on the leading global cross-platform games company after the analyst assessed the situation around the Dragon Train (DT) preliminary injunction whereby the US District Court for Nevada granted Aristocrat Leisure a preliminary injunction to Light & Wonder’s successful Dragon Train game preventing further installs of DT and sales globally. The upgrade in the price target by Bell Potter’s analyst is due to the company’s overall leading scale and cross-platform strategy producing a portfolio of high-performing games in both land and digital markets.
• And Trading Central has identified a bullish signal on Pepper Money (ASX:PPM) following the formation of a pattern over a period of 31-days which is roughly the same amount of time the share price may rise from the close of $1.40 to the range of $1.49 - $1.51 according to standard principles of technical analysis.