Daytrading April 17 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

The share market looks set to open little changed after Wall Street paused near record levels as traders weighed upbeat earnings, disappointing economic data and mixed signals on rates from the Federal Reserve.

The June SPI 200 futures contract eased six points or 0.1% to 5938 as US stocks closed in the red after a push towards fresh highs ran out of steam late in the session.

The S&P 500 rose within 0.3% of last month's all-time high before fading to a loss of two points or 0.08%. The Dow gave up seven points or 0.04% and the Nasdaq three points or 0.06%.

“We’re right up near the all-time highs in the S&P, and sometimes you take a breather before you break through those levels,” Matt Maley, equity strategist at Miller Tabak in the US, told Bloomberg.

The market opened underwater as a deterioration in the Greek debt crisis dragged on European markets. Greek government bonds slumped after Standard & Poor’s slashed the nation's credit rating to junk status amid mounting fears that the government will default on its debt. Read more here. The Financial Times reported that Greek officials were knocked back after making an informal request to the International Monetary Fund for a delay on debt repayments. The Stoxx Europe 600 lost 0.76% as Germany's DAX sagged 1.9%, France's CAC 0.58% and Britain's FTSE 0.52%.

The mood on Wall Street improved as key quarterly earnings beat expectations, energy stocks rallied and economic reports pointed to a possible delay in raising rates. Among those moving last night on profit reports were Netflix +18.21%, UnitedHealth +3.65%, Citigroup +1.52%, Goldman Sachs -0.44% and SanDisk -4.43%.

House construction picked up last month by less than expected. The increase of 2% to an annual rate of 926,000 was well below the 1.04 million anticipated by economists after harsh winter weather slowed building in February. Permits to build also missed expectations, declining 5.7% during March.  

Claims for unemployment benefits rose to a six-week high last week. Initial claims rose to 294,000 from a revised 282,000 the week before. The Philadelphia Fed manufacturing index provided respite from a week of generally downbeat data, rising to 7.5 this month from a reading of 5 in March.

Traders parsed a range of views from Federal Reserve committee members, who have been out in force this week sharing widely varying notions of economic policy. While Richmond Fed President Jeffrey Lacker and St Louis Fed President James Bullard on Wednesday night made the case for raising rates soon, last night Atlanta Fed President Dennis Lockhard and Boston Fed President Eric Rosengren argued for a delay until economic data improves.

The energy sector rallied 0.22% to lead a mid-session turnaround after oil extended its six-session rebound to 12%. West Texas Intermediate crude oil for May delivery settled 32 cents or 0.6% higher at US$56.71 a barrel.

"Speculators are probably thinking that the worst days are behind us and may therefore expect to see an imminent drop in US oil output after months of falling rig counts,” Fawad Razaqzada, technical analyst at FOREX.com, told MarketWatch.

BHP and Rio Tinto closed mixed in US trade as spot iron ore regained US$50 a tonne. BHP lifted 1.49% and Rio Tinto eased 0.28%. Spot iron ore for import to China yesterday bounced 30 cents to US$50 a dry tonne. An alternative ore benchmark slid 1% to US$49.78 per tonne.

Gold stocks pulled back from a six-week high as gold remained trapped in a narrow range either side of US$1,200 an ounce. The NYSE Arca Gold Bugs index gave up 1.12%. Gold for June delivery settled $3.30 or 0.3% lower at US$1,198 an ounce.

Copper had its best session in four weeks as a boom session in Chinese shares yesterday underlined expectation for further government stimulus action. The Shanghai Composite rallied 2.71% to a new seven-year high. In London, copper rallied 1.9%, aluminium 1.3%, lead 1.9%, nickel 1.1% and zinc 1.3%. Tin slumped 2.7% amid worries about an oversupply. US copper for May delivery was recently up 2.3% at US$2.78 a pound.

"It does seem to be the case that with weakness in China, the markets are saying 'We're going to get more stimulus measures'," Nic Brown, head of commodities research at Natixis in the UK, told Reuters.

The dollar was this morning buying 78.07 US cents.

TRADING THEMES TODAY

WAITING FOR DIRECTION: There was plenty going on last night, but the message was not clear enough to offer Wall Street any real direction. Earnings season is ticking along nicely, with positive surprises outweighing any negatives. Economic data continues to miss expectations but for now that is seen as a positive because it delays the threat of rate rises. The more speeches that Fed officials give, the murkier the outlook for rates becomes. The Greek crisis seems to be in danger of coming to a head after God knows how many years, but we have been here so often that investors have become complacent to the threat. So the seven-year wait for 6000 on the XJO continues.  

ECONOMIC NEWS: No significant domestic news scheduled today. A busy week in the US wraps up with the consumer price index/core CPI, preliminary consumer sentiment and inflation expectations, and a leading index.

Good luck to all.