Daytrading May 29 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

A flat open looks likely after US shares ticked lower as traders wrestled with a familiar combination of Greek debt gloom, fears of a rate rise and volatility in Chinese equities.

The June SPI 200 futures contract ended the night session unchanged at 5729 as Wall Street staged a partial recovery from initial falls.

The S&P 500 ended the session three points or 0.13% in the red after earlier falling as much as nine points as Chinese shares suffered their second-heaviest loss of the year, a Federal Reserve official supported a rate rise later this year and Greece's creditors denied they were close to a deal. The Dow gave up 37 points or 0.2% and the Nasdaq nine points or 0.17%.

“It’s kind of the same movie we’ve seen over and over,” Karyn Cavanaugh, senior market strategist at Voya Investment Management in the US, told Bloomberg. “We’re worried about what’s going on with the Fed, we’re worried about what’s going on with Greece. Then there’s always the strong dollar, throw a little of that in the mix and low oil prices, so the market is a little bit hard to predict on a day-to-day basis.”

The session got off to a nervous start after China's Shanghai Composite plunged 6.5% yesterday, the index's second-largest fall of the year, following news that the nation's sovereign fund sold shares in state-owned banks for the first time. Chinese traders dumped financial stocks after filings showed that China Central Huijin Investment sold 300 million shares of the Industrial and Commercial Bank of China and 280 million shares of the China Construction Bank in a possible signal that the central government believes equities are over-valued. Brokers have recently been tightening margin lending rules for retail traders to reduce their exposure to any downturn in a market that has risen 40% this year. Read more here.

Optimism that a Greek debt deal is close continued to dim after IMF Managing Director Christine Lagarde downplayed the likelihood of any near-term resolution to the long-running crisis. "I would not say that we have achieved results, that we are close to the end of the process,” Ms Lagarde said overnight. Read more here.

Fed-watchers had further cause to fret after Federal Bank of San Francisco President John Williams told the Monetary Authority of Singapore the central bank is likely to rise its key rate this year. Williams' remarks supported comments from Fed Chair Janet Yellen on Friday.

The night's economic reports continued the recent trend towards improvement after a soft patch over the northern hemisphere winter. Pending home sales increased for a fourth straight month to a nine-year high. The National Association of Realtors' index rose 3.4% in April from the previous month and was 14% higher than a year earlier. Initial jobless claims rose by 7,000 to a seasonally-adjusted 282,000 last week but remained close to 15-year lows.

The Dow Jones Transportation Average fell 0.91% to a new seven-month low. Airline stocks were the biggest drags amid concerns about over-capacity in the US, an analyst told CNBC.  

Australia's largest miners slid to their lowest levels in a month in US trade. BHP lost 1.43% and Rio Tinto 0.59%. Spot iron ore for import to China yesterday fell 30 cents to US$62.30 a dry ton.

US gold stocks rallied 1.65% after the precious metal broke a four-session losing run. Gold for June delivery settled $2.50 or 0.2% ahead at US$1,188.10 an ounce as the US dollar eased and Greek developments kept the 'fear trade' alive.

A fourth straight weekly decline in US crude inventories helped oil eke out a small gain. West Texas Intermediate crude oil for July delivery settled 17 cents or 0.3% higher at US$57.68 a barrel.
  
A decline in the greenback helped most base metals pare recent losses. In London, copper bounced 0.3% from a four-week low, aluminium 2.2%, lead 2.1% and zinc 1.9%. Nickel eased 0.1% and tin 0.2%. US copper for July delivery was recently flat at US$2.77 a pound.

European stocks trimmed Wednesday's rallies as hopes for a Greek deal faded. The Stoxx Europe 600 slipped 0.5%, Germany's DAX 0.79% and France's CAC 0.86%. Britain's FTSE bucked the trend with a rise of 0.11%.

The dollar was this morning buying 76.53 US cents.

TRADING THEMES TODAY

SAME OLD: There was no real news overnight, just a rehash of some pretty familiar themes. Greece continued to talk up its prospects of squeezing more cash from its lenders, while the lenders continued to talk it down. Improved US data suggested the economy will likely have enough momentum for a rate rise towards the end of the year. If there was any excitement in the last 24 hours, it was in China, where some of the air came out of the bubble. As a trader, you have to be impressed when an index falls 6.5% and it's not even the largest fall of the year (that was 7.7% in January). There is a slight danger that volatility there will spill over onto the ASX, which would be cruel since we've since little benefit from the surge on the Shanghai Composite over the last year. Trading opportunities among the specs have been fewer this week, but they were there.

ECONOMIC NEWS: April data on new home sales is due at 11am EST. May private-sector credit data follows at 11.30am. Preliminary first-quarter GDP figures are tonight's big-ticket item in the US. Also due: preliminary GDP price index, revised consumer sentiment and inflation expectations, and the Chicago PMI.

Good luck to all.