Morning Bell 4 June

Wall St tor on Tuesday as investors anticipate details on potential US trade deals will come to light very soon. AI stocks lead the gains with Nvidia up more than 3% at the sessions’ end. The S&P500 rose 0.58% on Tuesday, while the Nasdaq added 0.81% and the Dow Jones ended the day up 0.51%.

In Europe overnight, markets closed slightly higher after the eurozone inflation reading eased to a cooler-than-expected forecast 1.9% in May. The STOXX 600 rose 0.01%, Germany’s DAX added 0.64%, the French CAC climbed 0.33% and, in the UK, the FTSE100 ended the day up 0.13%.

Across the Asia region on Tuesday, the US Customs and Border Protection agency's move to extend a tariff pause on some Chinese goods boosted risk-on sentiment during Asian trading. This also helped the US dollar strengthen, recovering some of Monday’s sharp losses against major currencies. China’s CSI index rose 0.31% on Tuesday, Hong Kong’s Hang Seng climbed 1.4%, Japan’s Nikkei ended the day flat and South Korean markets were closed for polling day.

The Australian share market had its best day in a month, rising 0.6% as optimism about revived US-China trade talks boosted investor sentiment. The S&P/ASX 200 gained 52.6 points to close at 8466.7, with financials leading nine of 11 sectors higher. The rally followed gains on Wall Street after news that Presidents Trump and Xi will discuss tariffs this week.

Investors bought into the banks on Tuesday due to the safe-haven nature of such investments over the last year, while Iron ore miners declined in line with a drop in iron ore futures, triggered by China's manufacturing activity hitting its lowest point in over two years. BHP (ASX:BHP) fell 0.6%, while Rio Tinto (ASX:RIO) slipped 0.7%.

IDP Education (ASX:IEL) recorded the biggest loss on the market, tumbling 44.8% after warning investors that global policy uncertainty has impacted its student enrolment pipeline. The company also revealed it is conducting a review of its profitability and cost structure.

Meanwhile on a macro level, from 1st July, 2.6 million workers will benefit from a historic 3.5% minimum wage increase; the $32 weekly rise brings the national minimum wage to $24.95 per hour or approximately $948 per week. While this wage rise is one of the largest above-inflation increases ever, it is expected to have only a modest impact on inflation.

What to watch today:

• On the commodities front this morning, oil is trading 1.38% higher at US$63.38/barrel, gold is down 0.9% at US$3352/ounce and iron ore is down 0.7% at US$95.30/tonne.
• The Aussie dollar has weakened against the greenback overnight to buy 64.67 US cents, 93.03 Japanese Yen, 47.93 British Pence and 1 New Zealand dollar and 8 cents.
• Ahead of the midweek trading session in Australia, the SPI futures are anticipating the ASX will open the day up 0.27%.

Trading ideas:

• Bell Potter has increased the 12-month price target on Aspen Group (ASX:APZ) from $3.05 to $3.90 and maintain a buy rating on the real estate company following the company’s successful raising of $70m via an institutional placement with a further $4m to be raised via SPP at $2.90/unit.
• Trading Central has identified a bullish signal on Rural Funds Group (ASX:RFF) following the formation of a pattern over a period of 30-days which is roughly the same amount of time the share price may rise from the close of $1.79 to the range of $1.91 to $1.93 according to standard principles of technical analysis.