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Wall St started the new trading week with a mixed session ahead of the commencement of the Fed’s FOMC meeting where it is expected a rate cut of 0.25% will be announced as the US inflation rate continues to ease to the target 2% while the economy remains robust enough to avoid a recession. The S&P500 reversed morning losses to close Monday’s session up 0.13% while the Dow Jones rose 0.55% to a fresh record 41,622.08 points. The tech-heavy Nasdaq ended Monday’s session down 0.52% though as Apple shares weighed on the tech index.

Over in Europe, markets closed mostly lower on Monday ahead of key interest rate decisions out around the world this week. The STOXX 600 fell 0.2% on Monday, Germany’s DAX lost 0.35%, the French CAC fell 0.21%, and, in the UK, the FTSE100 ended the day up 0.06%. The Bank of England rate decision is announced on Thursday where it is widely expected the BoE will maintain the current cash rate of 5% for another period following the first 25 basis points rate cut announced in August.

Across the Asia region on Monday markets rose as investors assessed key economic data out of China including August factory, retail sales and fixed asset investment all rising by less than economists’ were expecting in data out over the weekend. China and South Korea’s markets were closed on Monday for the mid-Autumn festival, while Hong Kong’s Hang Seng rose 0.13% on Monday.

Locally on Monday, the ASX200 rose 0.27% taking lead from Wall Street’s rally on Friday ahead of the Fed’s next FOMC meeting where it is widely expected the Fed will announce the first interest rate cut of this cycle as inflation eases in the US.

Gold stocks rose on Monday as the price of the precious commodity rose 0.41% to US$2589/ounce. Evolution Mining, Regis Resources and Northern Star Resources each ended Monday’s session in the green.

Qantas shares rallied yesterday after the national carrier announced it is raising the cost of changing airfares booked with the airline by 20% which increases income for the flying kangaroo.

Australian-based global ship maker, Austal jumped over 17% on Monday after announcing it had won a US$450m contract with General Dynamics Electric Boat to expand production capacity at its US shipyard in support of the US Navy Submarine Industrial Base (SIB).

What to watch today:

• Ahead of Tuesday’s trading session the SPI futures are anticipating the ASX to open the day up 0.65%.
• On the commodities front this morning, oil is trading 2.73% higher at US$70.53/barrel, gold is up 0.16% at US$2582/ounce, and iron ore is down 0.86% at US$92.26/tonne.
• The Aussie dollar has strengthened to buy US$0.67, 94.98 Japanese Yen, 51.04 British Pence and NZ$1.09.

Trading Ideas:

• Bell Potter has initiated coverage of Champion Iron (ASX:CIA) with a buy rating and a 12-month price target of $7.15/share. Bell Potter’s analyst sees the company’s shift into higher grade production will likely support average realised prices and earnings amid an iron ore price environment generally expected to weaken. CIA will benefit from maturing high-grade iron concentrate markets that recognise emission reduction benefits. CIA is a dividend payer and the analyst expects earnings to continue to support dividends.
• And Trading Central has identified a bearish signal on Kelsian Group (ASX:KLS) following the formation of a pattern over a period of 12-days which is roughly the same amount of time the share price may fall from the close of $3.99 to the range of $3.25 to $3.40 according to standard principles of technical analysis.