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Wall St closed mixed to start the new trading as investors shift out of tech stocks and into the industrials sector of the market. The Dow Jones rose 0.86%, the S&P500 gained 0.16% and the tech-heavy Nasdaq ended the day down 0.38%. Rising bond yields also pressured equities at the start of the week as investors shift to the relatively safer returns of bonds over equities when bond yields rise.

In Europe overnight, markets in the region closed lower amid rising bond yields and a soaring USD. The STOXX 600 fell 0.55% on Monday, Germany’s DAX lost 0.41%, the French CAC fell 0.3% and, in the UK, the FTSE100 ended the day down 0.3%.

Across the Asia region on Monday, markets closed lower taking lead from Wall St on Friday and on the back of key economic data being released out of China. China’s imports rose 1% in December, which significantly topped economists’ expectations of a 1.5% decline while exports jumped 10.7% YoY which was also above the 7.3% rise markets were expecting. China’s CSI index fell 0.3% on Monday, Hong Kong’s Hang Seng lost 0.73% and South Korea’s Kospi Index ended the day down 1.04%.

The local market started the new trading week lower, ending the day down 1.2% as negative sentiment on the rate front in the US filtered into our local market on Monday. A stronger-than-expected jobs report out in the US on Friday dampened hopes of rate cuts out of the Fed anytime soon, which sparked the broad sell-off in Australia yesterday.

Department store giant Myer tumbled over 23% yesterday after the retailer released an ‘in-line’ trading update with flat growth amid challenging trading conditions during the high interest rate environment. The update dragged down shares in Premier Investments too by 16% as Premier is the largest shareholder in Myer.

Meanwhile Insignia Financial rallied 2.43% after Bain Capital moved to match its takeover bid to that of CC Capital’s $4.30/share as the race to take over one of Australia’s leading wealth providers heats up.
And Novonix tumbled almost 10% on Monday after the US Department of Energy didn’t permit the battery materials producer access to specific tax credits to make it eligible for an additional loan to fund its Tennessee facility.

What to watch today:

• Ahead of Tuesday’s session on the ASX the SPI futures are anticipating the local market will open the day up 0.45%.
• On the commodities front this morning oil is trading 3% higher at US$78.89/barrel, gold is down almost 1% at US$2660/ounce and iron ore is flat at US$98.09/tonne.
• The Aussie dollar has slightly strengthened overnight against the greenback to buy US$0.61, 96.90 Japanese Yen, 50.64 British Pence and NZ$1.11.

Trading Ideas:

• Bell Potter has increased the 12-month price target on Lynas Rare Earths (ASX:LYC) from $7.50 to $7.70 and maintain a hold rating on the rare earths producer ahead of the release of the company’s 2QFY25 report on 17th January. The analyst is looking for commentary on ramp up and production guidance across the business given weaker than anticipated Rare Earth prices but increases the price target due to their blended forward EV/EBITDA picking up a greater portion of FY26.
• And Trading Central has identified a bullish signal on Ramelius Resources (ASX:RMS) following the formation of a pattern over a period of 22-days which is roughly the same amount of time the share price may rise from the close of $2.18 to the range of $2.46 to $2.52 according to standard principles of technical analysis.