Daytrading Dec 12 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

Stocks face a soft open after a rally on Wall Street faded late in the session as a plunge in oil below US$60 a barrel offset upbeat US economic data.

The December SPI 200 futures contract edged down eight points or almost 0.2% to 5224 amid weakness in key commodities and resource shares and after Reserve Bank Governor Glenn Stevens talked down the dollar.

US stocks bounced back from three days of selling as strong retail sales and jobs data suggested lower energy prices were helping the economy gather momentum. The S&P 500 rallied as much as 30 points before paring its gain to nine points or 0.44%, closing at 2,035 as a fall in oil snuffed out a rebound in energy stocks. The Dow put on 63 points or 0.36% and the Nasdaq added 24 points or 0.51%.

Retail stocks led the gains after data showed US sales saw their biggest jump in eight months during November, beating expectations. Spending increased by 0.7% last month and the October sales increase was upwardly revised to 0.5%.  

"It suggests overall spending is going to do well, and today's rally confirms the resumption of a year-end rally which probably will take the S&P to about 2,100," Peter Cardillo, chief market economist at Rockwell Global Capital in the US, told Reuters.

Other positive economic signals overnight included a decline in jobless claims and a sharp drop in import prices. First-time claims for unemployment benefits last week decreased by 3,000 to 294,000, marking the 12th week in 13 that claims have been below 300,000. Import prices fell 1.5% last month, the biggest fall in two and a half years, as the price of oil tumbled.

A rebound in energy stocks was nipped by another tilt lower in oil, the latest downleg in a collapse that has seen it fall 44% in six months. West Texas Intermediate crude oil for January delivery fell 99 cents or 1.6% to settle at US$59.95 a barrel, the lowest settlement price since July 2009. The decline came after Saudi Arabia's Oil Minister said he saw no reason to reduce his nation's production. US energy stocks closed 0.42% in the red.

The dollar was this morning down more than half a cent at 82.64 US cents after RBA Governor Glenn Stevens said he would prefer to see the currency at 75 US cents than at present levels. Read more here.

Australian heavyweights BHP and Rio Tinto continued their losing runs in the US after iron ore ticked lower for a fifth session. BHP fell 1.24% and Rio Tinto 1.97%. Spot ore for import to China yesterday fell 10 cents to US$68.80 a dry tonne.

A mixed session in base metals saw zinc and aluminium hit multi-week lows but copper advanced despite a downbeat outlook from the Chinese government at an economic conference. Zinc touched a six-month low in London trade before rebounding to a gain of 0.7%. Aluminium set an eight-week low en route to a loss of 0.7%. Also in London, copper rallied 0.8% and tin 1%. Lead lost 1.4% and nickel 0.3%. US copper for December delivery was recently up 0.7% or more than two cents at US$2.93 a pound.

The night's positive US economic signals boosted the greenback and dampened demand for havens. Gold for February delivery fell $3.80 or 0.3% to settle at US$1,225.60 an ounce.

A choppy night in Europe saw the benchmark index close unchanged despite further falls in Greek and Russian stocks. The Stoxx Europe 600 closed flat as Germany's DAX gained 0.65%, France's CAC dipped 0.05% and Britain's FTSE lost 0.59%. Greece's Athex index crumbled another 7.35% to extend its fall this week to 21%. Russia's MICEX equity index fell 2.1% after the country's central bank raised its key lending rate to bolster the rouble.

TRADING THEMES TODAY

SEARCHING FOR THE BOTTOM: There have been promising partial rebounds on the ASX during the last two sessions, but we did not quite see the convincing rally in the US overnight that the market needs to move confidently above these levels. Wall Street looked great around lunchtime in the US but fell away sharply during the afternoon. Nonetheless, the charts show a lot of Australian mid-caps opened at their lows yesterday and then improved throughout the day, a hint that the latest retrace might have run its course or at the very least that some shorts thought it was time to cover. Glenn Stevens took another shot at the dollar overnight, so currency movements will  have a say in how this session develops. BHP and Rio Tinto remained friendless in the US.

ECONOMIC NEWS: No significant domestic news scheduled today. China releases its November update on industrial production, retail sales and fixed asset investment at 4.30pm EST. Europe has industrial production data scheduled tonight. A night of meaty US data ahead includes preliminary consumer sentiment and inflation expectations and the producer price index/core PPI.

Good luck to all.