Oil prices extended their recent gains in early trading on Monday, buoyed by positive pronouncements from both the United States and China following their weekend trade negotiations.

The apparent progress in talks between the world’s two largest crude oil consumers significantly lifted market sentiment, fostering hopes for an easing of the trade dispute that has threatened global economic growth and energy demand.

Brent crude futures, the international benchmark, climbed 27 cents, or 0.4%, to $64.18 a barrel by 0001 GMT.

Similarly, US West Texas Intermediate (WTI) crude futures advanced 28 cents, or 0.5%, to trade at $61.30 a barrel from Friday’s close.

This upward momentum builds on a strong performance last week, where both benchmarks surged over 4%, marking their first weekly gains since mid-April.

That earlier optimism was partly sparked by a separate US trade agreement with the United Kingdom, which raised hopes that broader economic dislocations from US tariffs on its trading partners might be averted.

The latest boost came as high-level trade talks between the US and China concluded on a positive note Sunday.

US officials highlighted a “deal” aimed at reducing the US trade deficit, while their Chinese counterparts stated that an “important consensus” had been reached.

However, concrete details of the discussions remained scarce, with Chinese Vice Premier He Lifeng indicating a joint statement would be forthcoming on Monday.

Demand hopes tempered by supply outlook

Constructive dialogue and a potential resolution to the trade war are seen as highly beneficial for crude oil demand.

A restoration of more normalized trade flows, currently hampered by significant tariffs imposed by both nations, would likely spur economic activity and, consequently, energy consumption.

Despite the positive sentiment surrounding the talks, analysts cautioned that gains might be capped by other market factors.

“Optimism over constructive US-China talks supported sentiment, but limited details and OPEC’s plan to raise output capped gains,” Toshitaka Tazawa, an analyst at Fujitomi Securities, told Reuters.

Tazawa referred to the plans by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to accelerate production increases in May and June, which will introduce more crude supply into the market. Interestingly, a separate Reuters survey found that actual OPEC oil output edged slightly lower in April, adding a layer of complexity to the supply picture.

Geopolitical and industry factors also in play

Beyond the immediate US-China dynamic, other geopolitical and industry developments are influencing the oil market.

Talks between Iranian and US negotiators regarding Tehran’s nuclear program concluded in Oman on Sunday with plans for further negotiations, according to officials.

While Tehran publicly reiterated its stance on continuing uranium enrichment, any eventual US-Iran nuclear deal could potentially ease concerns about global oil supply constraints, thereby exerting downward pressure on prices.

Meanwhile, on the supply side within the US, energy firms last week reduced the number of active oil and natural gas rigs to their lowest levels since January, according to data from energy services firm Baker Hughes.

This decline in drilling activity could signal a potential slowdown in future US production growth.

As the market digests the positive, albeit vague, signals from the US-China trade front, the interplay between demand expectations, OPEC+ supply decisions, and ongoing geopolitical negotiations will continue to shape oil price trajectory.

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Chinese electric-vehicle battery behemoth Contemporary Amperex Technology Co. Ltd. (CATL) has officially commenced taking investor orders for its highly anticipated Hong Kong stock offering, a deal poised to become the world’s largest listing so far this year.

The move signals strong momentum for Hong Kong’s IPO market, despite the ongoing global economic uncertainties fueled by US-China trade tensions.

Aiming for a multi-billion dollar haul

CATL is seeking to raise as much as HK$41 billion (approximately 5.3 billion), according to its listing document released Monday.

This top−end figure includes the potential for an upsized deal and the exercise of a green shoe option, building on a base offering of up to HK31 billion.

The Fujian-based company is marketing its shares at a maximum price of HK$263 each.

This price is slightly lower (1.4%) than its Friday closing price in Shenzhen but roughly aligns with Thursday’s levels.

Pricing for the Hong Kong shares could be finalized as early as Tuesday, with the stock expected to begin trading on May 20.

Hong Kong IPO market gets major boost

Successfully executed, CATL’s offering would more than double the total proceeds raised in Hong Kong’s new listings market this year.

Bloomberg Intelligence forecasts that the city’s IPO market could see a surge to over $22 billion in 2025, largely driven by Chinese companies proceeding with their listing plans in the Asian financial hub.

This trend persists despite the significant market turmoil caused by US President Donald Trump’s tariff policies, which have led to postponements of many listings in American and European markets.

In a sign of investor confidence, CATL’s existing shares rose as much as 3.4% in Shenzhen trading on Monday, outperforming the benchmark index.

The offering structure involves a base offering of about 118 million shares, potentially increasing to around 136 million if the deal is upsized by 15%.

With the full exercise of the greenshoe option, nearly 156 million shares would be sold.

CATL has already secured significant backing from cornerstone investors, who have committed to purchasing approximately $2.6 billion worth of stock and holding it for at least six months, according to the prospectus.

This influential group includes Chinese state-owned oil giant Sinopec, the Kuwait Investment Authority, and prominent alternative-asset manager Hillhouse Investment.

Notably, CATL is conducting the deal as a “Regulation S” offering, which restricts sales to US onshore investors and exempts the issuer from certain US regulatory filing requirements.

This confirms earlier reports by Bloomberg News and suggests that ongoing US-China tensions may be influencing the structuring of major capital market transactions.

Additionally, the company received a waiver from the Hong Kong exchange regarding the standard clawback mechanism, allowing institutional investors to retain a larger proportion of the shares allocated in the Hong Kong listing, even with high retail demand.

Navigating geopolitical headwinds

The path to this mega-listing has not been without its challenges.

In January, CATL was placed on a Pentagon blacklist due to allegations of links to the Chinese military – accusations the company has consistently and repeatedly denied.

This scrutiny extended to some of the banks involved in arranging the deal.

In April, a US congressional committee publicly urged JPMorgan Chase & Co. and Bank of America Corp. to cease their involvement with the listing due to these alleged military ties, which CATL again refuted.

Both American banks, however, have remained part of the underwriting syndicate.

Fueling global expansion

CATL intends to use a significant portion of the IPO proceeds to fund its ongoing international expansion, particularly in Europe.

A key project includes a large-scale factory in Hungary designed to supply major automotive clients like Mercedes-Benz.

This expansion is crucial for CATL to widen its already substantial lead in the global EV battery market, where it commands a market share of roughly 38%, comfortably ahead of its nearest competitor, BYD Co., which holds around 17%, according to SNE Research.

The CATL deal underscores Hong Kong’s continued appeal as a listing venue for major Chinese corporations.

The momentum appears set to continue, with reports suggesting Chinese cancer drugmaker Jiangsu Hengrui Pharmaceuticals Co. is also preparing for a significant Hong Kong listing this month.

Joint sponsors for CATL’s offering include China International Capital Corp. and China Securities International, alongside JPMorgan and Bank of America.

Goldman Sachs Group Inc., Morgan Stanley, and UBS Group AG are also involved in arranging the deal.

Underwriters are set to receive a fixed fee of 0.2% of the deal, with a potential additional 0.6% incentive fee.

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Alibaba stock has surged from a low of $55.7 in 2022 to $123 as the company has benefited from several tailwinds like the artificial intelligence theme, the end of a regulatory crackdown by Beijing authorities, and its stock buybacks. This article explains why the BABA share price is about to surge ahead or after this week’s earnings.

Alibaba stock price has formed a golden cross

The weekly chart identifies a few unique patterns that may push the BABA stock price much higher in the long term. It has remained above the ascending trendline that connects the lowest swings since January last year. That is a sign that bulls remain in control for now.

The other main thing is that the Alibaba stock price has formed a golden cross pattern, which happens when the 50-week and 200-week Exponential Moving Averages (EMA) cross each other. A golden cross often leads to more gains. 

A good example of this is to consider its opposite, which is known as the death cross pattern. BABA stock formed a death cross in September 2021 when it was trading at $170. It then plunged to a low of $55.7 in 2022. 

Alibaba stock has also moved above the important resistance level at $117.60, the highest swing in October 2024. Moving above this price was notable as it invalidated the double-top pattern that was forming. It has also jumped above the 23.6% Fibonacci Retracement level at $116.18.

Therefore, the shares will likely continue rising as bulls target the next key resistance level at $148, the highest level in 2025. A move above that resistance will signal more gains to the 50% retracement at $183, up by 46% above the current level. 

The bullish Alibaba stock price forecast will become invalid if it crashes below the key support at $96, the lowest point in April. 

More catalysts for BABA share price

Alibaba stock price faces more catalysts ahead. First, the company will be a top beneficiary if the United States reaches a deal with China. In separate statements, Scott Bessent and Donald Trump hailed the two-day talks even as they provided no details on what was discussed. 

A deal between the two countries would help Alibaba because of the volume of goods it sells in the US. Many US businesses use Alibaba’s website to source goods from the US, meaning that they would benefit from an agreement. 

Further, Chinese officials may pitch purchases for American technology items like semiconductors as a way of narrowing US trade deficit. Such a move would include giving Alibaba access to chips from companies like NVIDIA and AMD. 

The other bullish catalyst for the BABA stock price is the ongoing share repurchases. Data shows that the number of outstanding shares has dropped to 2.31 billion, down from 2.71 billion in 2020. Share repurchases help to boost a company’s stock by increasing its earnings per share (EPS). 

Analysts are upbeat about the upcoming earnings even as recession risks have remained. The average revenue estimate is 240 billion yuan, up 8.17% from what it made in the same period last year. 

The earnings per share is expected to come in at 12.8 yuan, up from 10.14 a year earlier. Alibaba has a long history of beating analysts estimates, meaning that it will likely do the same this quarter. 

Alibaba stock is also fairly priced as it has a forward P/E ratio of 12.2, much lower than the S&P 500 average of 21. This valuation is also cheaper than other companies like Amazon and Chinese tech firms like Tencent and PDD Holdings.

Read more: 4 reasons Alibaba stock price is surging this year and what next

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European stock markets kicked off the new trading week with a powerful surge on Monday, as investors enthusiastically welcomed news that the United States and China had reached an agreement to significantly reduce trade tariffs.

This apparent breakthrough in the protracted trade dispute between the world’s two largest economies immediately lifted global market sentiment.

The positive momentum was evident across major European bourses from the opening bell.

The pan-European Stoxx Europe 600 index jumped 1.1% in early trading.

Leading national indices followed suit: Germany’s DAX surged 1.6%, France’s CAC 40 climbed 1.3%, and the UK’s FTSE 100 opened around 0.6% higher.

Earlier IG data had indicated pre-open expectations for the FTSE 100 to be up 35 points, DAX +192, CAC +70, and Italy’s FTSE MIB +366 points.

The primary catalyst for this strong risk-on sentiment was the White House’s announcement over the weekend of a “trade deal” with China, which included an agreement to suspend most tariffs for a 90-day period.

US Treasury Secretary Scott Bessent further bolstered optimism on Monday, stating that talks with China had been “very productive.”

This signaled a significant thawing in trade tensions that have weighed heavily on global economic prospects.

The positive news reverberated across global markets even before European trading commenced.

US stock futures had jumped sharply on Sunday night following the White House comments, with Nasdaq futures pointing to gains around 3.6%, S&P 500 futures up by 2.8%, and Dow futures indicating a rise of nearly 1,000 points (or 2.3%).

Asia-Pacific markets also broadly rallied on Monday in response to the perceived progress.

Safe havens retreat as risk appetite returns

The improved outlook for global trade prompted a noticeable shift away from traditional safe-haven assets.

Spot gold, which often gains during periods of economic and political instability, plunged on Monday as investors unwound protective positions. By 9:20 a.m. Singapore time, bullion was trading 1.85% lower at $3,262.29 per ounce.

This marked a sharp reversal from the previous week when gold had notched a 2.6% gain as investors sought refuge from trade uncertainties.

Bitcoin, another asset sometimes viewed as a hedge, also saw a slight pullback on Monday after strong recent gains.

The leading cryptocurrency was down 0.42% to $103,859.94 as of 11:39 a.m. Singapore time, though it continued to hold comfortably above the significant $100,000 threshold.

Its recent surge had prompted forecasts of it soon retesting its all-time high reached at the end of January.

Focus on earnings amid quieter data day

While the trade news dominated headlines, investors also turned their attention to corporate earnings.

Monday’s European earnings calendar was relatively light, though Italian banking giant UniCredit was among those releasing its latest quarterly results.

The broader earnings season continues to unfold, providing crucial insights into how companies are navigating the evolving economic landscape.

Data releases for the day were also sparse, allowing market participants to fully digest the implications of the US-China trade developments.

As the trading week begins, the significant step towards de-escalating the US-China trade war has provided a powerful boost to investor confidence, setting a positive tone across global financial markets.

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President Donald Trump announced on Sunday evening that he would sign an executive order aimed at reducing prescription drug prices in the United States by linking them to prices paid in other wealthy nations.

The move, posted on Truth Social, revived a controversial pricing model known as the “most favored nation” (MFN) approach.

The plan would effectively cap US prices for certain drugs at the lowest rate paid by peer countries.

Trump offered few details on which drugs or insurance programs would be affected, leaving critical questions about implementation unanswered.

“Our Country will finally be treated fairly, and our citizens Healthcare Costs will be reduced by numbers never even thought of before,” he wrote.

While the order does not immediately change federal policy, it signals a renewed effort to address soaring drug costs ahead of the election season, with potential implications for pharmaceutical firms worldwide.

From Chugai to Sun Pharma: Asian pharma stocks fall sharply in response

Markets in Asia were among the first to react, with pharmaceutical shares plunging on Monday amid fears that reduced prices in the US—the world’s largest market for medicines—could significantly dent profits.

In Japan, the drug sector was the weakest performer on the Topix index.

Chugai Pharmaceutical fell as much as 10%, marking its sharpest drop in over a year. Daiichi Sankyo lost 7.8%, and Takeda Pharmaceutical fell over 5%.

In Hong Kong, BeiGene Ltd. dropped 8.8%, while Innovent Biologics shed 6.4%.

South Korean firms SK Biopharmaceuticals, Celltrion, and Samsung Biologics each fell more than 3%.

Indian drugmakers Sun Pharmaceutical, Lupin, and Aurobindo Pharma posted declines between 3% and 7%.

The market rout reflected concern that a pricing overhaul in the US could erode revenue for companies that rely heavily on American sales.

Rule likely to apply to Medicare drugs; analysts flag challenges to implementation

The White House has yet to provide full details of the executive order. According to a report by Politico, the MFN pricing principle would initially apply only to a selection of Medicare-covered drugs.

Stephen Barker of Jefferies Japan pointed out that Trump’s latest initiative mirrors an earlier proposal to cap Medicare drug prices—a move struck down in federal court after pushback from pharmaceutical companies.

Nonetheless, Barker warned that a renewed push targeting Medicare and Medicaid, which together account for roughly 40% of US drug sales, could result in serious revenue reductions across the sector.

Shares of Japan’s Astellas Pharma and Otsuka Holdings, both of which derive significant revenue from US operations, lost more than 4% following the news.

Hidemaru Yamaguchi of Citigroup Global Markets Japan described the plan’s feasibility as “questionable,” but noted that its mere announcement had already shaken investor sentiment.

“The devil still may be in the details,” said Michael Risinger, a healthcare strategist. “We’ll have to see whatever that detailed plan is… and then watch future developments.”

Evan Seigerman of BMO Capital Markets emphasized that the executive order would likely be confined to the Inflation Reduction Act framework introduced under President Biden, which already mandates price negotiations for a small number of high-cost drugs.

Seigerman added that the federal government currently lacks authority to set prices in the commercial market, and any attempt to broaden the order’s reach could face strong opposition in the Republican-controlled House.

Still, the uncertainty surrounding the order is adding volatility to global pharma stocks.

S&P 500 Pharma industry index down by 10% over 3 months

The extent of pricing pressure and potential tariffs remains unclear, but the prevailing uncertainty is already dragging down pharmaceutical stocks in the US as well.

The S&P 500 Pharmaceuticals industry index has declined nearly 10% over the past three months, and analysts caution that it may be too early to declare a bottom for the sector.

The US pharmaceutical market is a cornerstone of global drug revenues.

Seven of the ten largest pharmaceutical firms by market value are American, and even foreign giants like Novartis, Sanofi, and Novo Nordisk derive more than half their income from US sales.

Eli Lilly, the world’s most valuable drugmaker, earned 67% of its 2024 revenue from the US Johnson & Johnson, the largest by revenue, earned 57%.

Industry executives have warned that pricing cuts could jeopardize research and development, already an expensive and risky process.

Around 90% of drugs entering Phase 1 clinical trials never reach the market, and development timelines can stretch up to 15 years.

In a Barron’s report, an Eli Lilly spokesperson called the MFN model “a misguided attempt at addressing drug prices that would do nothing for patients while jeopardizing the nearly $200 billion in new US investments recently announced by biopharmaceutical companies.”

Calls for global responsibility and balanced policy

Chris Boerner, CEO of Bristol Myers Squibb, expressed concern that unilateral US pricing reforms could undermine global R&D investment.

In an op-ed for STAT, he urged other wealthy nations to increase their contributions to healthcare innovation rather than depend disproportionately on US spending.

“Slashing US investment in medicines or importing lackluster policies of less innovative health care systems is not the answer,” Boerner wrote.

For now, the global pharmaceutical industry faces a renewed test of its pricing power in its most profitable market, with investors bracing for continued volatility in the months ahead.

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