Daytrading March 4 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

Stocks look set for a soft open after US investors sold the bull rally's biggest winners ahead of Friday's monthly employment report.

The March SPI 200 futures contract eased 13 points or 0.2% to 5910 as BHP and Rio Tinto declined in overseas trade.

US stocks retreated from record levels as weak car sales dampened expectations for the February jobs update. The S&P 500 fell 9.6 points or 0.45%, the Dow 86 points or 0.47% and the Nasdaq 28 points or 0.56%.

“The biggest thing is we’re at the record highs and a lot of people, at the margin, are taking profits,” Jim Paulsen, chief investment strategist at Wells Capital Management in the US, told Bloomberg. “The sectors getting hit today are the big momentum sectors: consumer cyclicals, health care and technology.”

Vehicle sales unexpectedly declined for a third straight month last month to a 10-month low, according to Autodata. Sales slowed to a seasonally-adjusted annual rate of 16.23 million from 16.66 million in January. Economists had expected sales to hold steady.

“Investors are reassessing risks and buying protection ahead of the jobs report. After disappointing car sales numbers, there are some concerns that the jobs report may not be as stellar as hoped for,” JJ Kinahan, chief strategist at TD Ameritrade in the US, told MarketWatch. “It is also normal for markets to pull back after reaching record highs, with people booking in some profits and selling ahead of Friday employment numbers.”

Eight of the S&P 500's ten industry groups declined, with health-care hit hardest a day after reaching an all-time high. BHP lost 0.6% and Rio Tinto 0.5% in US trade. Spot iron ore for import to China yesterday declined for the fourth time in five sessions, falling 50 cents to US$62.30 a dry tonne.

Oil stocks bucked the downtrend in the US, rising 0.37% as crude settled back above US$50 a barrel. West Texas Intermediate crude oil for April delivery bounced 93 cents or 1.9% to US$50.52 a barrel.

Gold stocks continued to retreat as the metal fell for a second session. The NYSE Arca Gold Bugs index lost 2.01%. Gold for April delivery settled $3.80 or 0.3% lower at US$1,204.40 an ounce.

Nickel touched a 13-month low and copper retreated as traders interpreted Saturday's Chinese rate cut as a bearish indicator for this week's GDP report. In London, copper shed 1.4%, aluminium 0.5%, nickel 1.3% and zinc 0.1%. Lead closed flat and tin added 0.1%. US copper for March delivery was recently off 1.5 % or more than four cents at US$2.67 a pound.

European stocks fell even as data suggested the European Central Bank's stimulus program is starting to boost spending and hiring. German retail sales surged 2.9% in January from December levels, exceeding the most optimistic estimate, and Spanish unemployment fell sharply.  The Stoxx Europe 600 gave up 0.92% as Germany's DAX sagged 1.14%, France's CAC 0.98% and Britain's FTSE 0.74%.

The dollar was this morning buying 78.21 US cents.

TRADING THEMES TODAY

GDP: Overseas traders took some money off the table overnight ahead of Friday's US jobs update and tomorrow night's ECB policy meeting. Just standard profit taking and risk adjustment, so far as I can see. The ASX took a hit yesterday after the RBA sat on its hands, although anyone who paid attention to the wording of the minutes from the previous policy meeting would not have been surprised since they indicated a debate whether to cut the cash rate in February or wait until March - in other words, an either-or decision. Yesterday's policy statement maintained a bias towards further easing, just not yet. Today's potential market-mover is the 11.30am EST Q2 GDP update, which is expected to show an acceleration in growth from 0.3% to 0.7%, according to Forex Factory. Volatility in the specs was extreme yesterday, which makes for great intraday trading but raises the stakes for overnight holds.

ECONOMIC NEWS: The AIG Services Index is due at 9.30am EST, but today's big ticket item is the 11.30am EST release of second-quarter GDP data. US Federal Reserve Chair Janet Yellen is due to deliver a speech in the US at 12.15pm AEST, which could also have an impact on sentiment in the unlikely event that it contains any surprises. HSBC releases its services PMI for China at 12.45pm. A solid menu tonight in the US includes ADP private payrolls, the Fed's 'Beige Book', rival services PMIs and crude oil inventories.

Good luck to all.