Markets Overview

  • ASX SPI 200 futures down 0.3% to 9,052.00
  • S&P 500 up 1.2% to 6,876.18
  • Dow Average up 0.7% to 47,544.58
  • Aussie up 0.6% to 0.6555 per US$
  • US 10-year yield fell 1.1bps to 3.9910%
  • Australia 3-year bond yield rose 4 bps to 3.41%
  • Australia 10-year bond yield rose 4.1 bps to 4.18%
  • Gold spot down 3.0% to $3,987.86
  • Brent futures down 0.3% to $65.73/bbl

Economic Events

  • 11:00: (AU) Australia to Sell A$1.2 Billion 3.75% 2037 Bonds

Bond sales in Australia are poised to hit new highs this year as the government’s rare AAA ratings fuel the appeal of the market.

Wall Street’s hopes the US and China are nearing a trade deal lifted riskier assets, with stocks hitting all-time highs amid a rally in crypto. As demand for safety waned, gold fell alongside short-term bonds.

The S&P 500 climbed 1.2% as Chinese and US trade negotiators have lined up an array of diplomatic wins for Donald Trump and Xi Jinping to unveil at a summit this week. With further Federal Reserve interest-rate cuts on the way, the profit outlook is looking increasingly brighter.

“The market is on fire,” said Louis Navellier at Navellier & Associates. “This reflects strong optimism about future earnings potential. Today’s catalyst is the news that negotiations with China over tariffs are expected to go well. Needless to say, the trend is our friend.”

Corporate America appears fairly unscathed by tariffs, with firms protecting margins through price hikes and cost cuts. Sales beats for S&P 500 companies are running at a four-year high.

On Wednesday and Thursday, five firms that account for about a quarter of the US benchmark — Microsoft Corp., Alphabet Inc., Meta Platforms Inc., Amazon.com Inc. and Apple Inc. — will report results. A gauge of the “Magnificent Seven” megacaps jumped 2.6%.

“With the Fed on track to cut rates, extending the run would appear to hinge on this week’s lineup of high-profile earnings releases,” said Chris Larkin at E*Trade from Morgan Stanley. “And it may, barring any surprises in US-China trade negotiations.”

The S&P 500 topped 6,875 – notching its best three-day rally since May. While most major groups gained, breadth was not amazing. “Ultimately advances need breadth to sustain themselves,” said Jonathan Krinsky at BTIG.

Treasury two-year yields rose two basis points to 3.5%. The dollar fell. Gold broke below $4,000.