Morning traders. Thanks Trees and after-market regulars. Market...

Morning traders. Thanks Trees and after-market regulars.

Market wrap:
Share futures point towards towards a mildly negative open after civil unrest in Hong Kong and soft Chinese economic data helped drag US stocks and iron ore lower overnight.

The December SPI 200 futures contract eased 12 points or 0.2% to 5252 but ended the night session well off its low as Wall Street pared sharp initial falls.

The S&P 500 opened 17 points or around 1% in the red before improving steadily to close five points or 0.24% lower at 1,977.86. The Dow trimmed a triple-digit fall to a final loss of 42 points or 0.25%. The Nasdaq gave up six points or 0.14%.

“There’s this sense of foreboding in the stock markets that we’re almost deserving of at least a correction,” Drew Wilson, investment analyst with Fenimore Asset Management in the US, told Bloomberg. “Nobody wants to be in the way of that. We’ve had one tiger awaken in Russia and now we have a tiger awakening in China and that’s a little too much risk and uncertainty for US stock market investors to have on their plates.”

All ten S&P 500 industry groups opened underwater following a weekend of riots in Hong Kong, where pro-democracy protesters took to the streets to demand free and open elections. Analysts said the civil unrest represents the greatest challenge to Beijing's authority since the bloody Tiananmen Square stand-off in 1989 and fuelled a 'flight to safety' on investment markets that initially drove US government bonds, gold and the US dollar higher. Both gold and the greenback later reversed gains as the defensive utilities sector led a recovery in US equities.

The unrest combined with soft weekend Chinese economic numbers and weak European business and consumer confidence data to push European markets lower. The Stoxx Europe 600 index fell 0.38% as Germany's DAX gave up 0.71%, France's CAC 0.8% and Britain's FTSE 0.04%. A European Commission gauge of business and consumer confidence this month declined to its lowest level since last year.

A big week of US economic data opened with evidence of a rebound in consumer spending, low inflation and a mild deterioration in buyer interest in housing. Consumer spending increased by a seasonally-adjusted 0.5% last month after stalling in July. Inflation as measured by the PCE price index was flat, relieving pressure on the Federal Reserve to raise interest rates. A measure of pending home sales dropped 1% from an 11-month high in July.

The US dollar index turned mildly negative after 11 weeks of steady rises pushed it to a four-year high, allowing the Australian dollar to recover some of yesterday's dive below 87 US cents. The index was lately off 0.08%. The Aussie was this morning buying 87.24 US cents.

“The [US] dollar is currently the most overbought it has been in decades," Jeffrey D. Saut, chief investment strategist at Raymond James in the US, told MarketWatch. "Watch the Dollar Index, if it makes a trading top and begins a pullback, look for a rally in stocks, as well as commodities.”

Weak Chinese industrial profits announced over the weekend and a resumption of the decline in iron ore kept the pressure on BHP and Rio Tinto in US trade. BHP lost 1.4% and Rio 2.2% overnight. Spot iron ore for import to China yesterday declined 90 cents or 1.2% to US$77.70 a dry tonne.

Gold caught some haven-buying due to the Hong Kong unrest, but struggled to hold its gains ahead a heavy menu of US economic data this week, which is expected to confirm that the economy is gathering steam. Gold for December delivery rallied $3.40 to settle at US$1,218.80 an ounce and was lately at US$1,215.90.

Oil hit a two-week high as last night's economic data added to expectations that US growth is on the improve. West Texas Intermediate crude oil for November delivery rallied $1.03 to settle at US$94.57 a barrel.

Copper saw some relief from a pause in the rally in the greenback, which has been raising prices for holders of other currencies. In London, copper rose 0.4%, aluminium 0.8%, lead 1.3% and zinc 1.1%. Nickel fell 1.8% and tin 0.5%. US copper for December delivery was recently up more than a cent or 0.35% at US$3.05 a pound.

TRADING THEMES TODAY

SEARCHING FOR THE BOTTOM: The ASX yesterday pre-empted a weak overnight session on Wall Street and may therefore have room for a mild recovery today if Chinese factory data due at 11.45am EST show no further deterioration. There was a welcome pause in some of the recent pressures on the market overnight - currency factors, most commodities - but no relief from iron ore, which has yet to find a base. Economists expect the final version of HSBC's Chinese manufacturing PMI to match the preliminary reading of 50.5. Anything significantly better/worse will have an impact on how this session ends.

ECONOMIC NEWS: A big day for economic data around the planet starts in Asia with a steady stream of Japanese figures from 9.30am EST, Australian private sector credit at 11.30am and the final HSBC Final Manufacturing PMI for September at 11.45am. Europe releases employment and inflation data tonight. US highlights include consumer confidence, the Chicago PMI and composite house price index.

Good luck to all.