daytrading aug 2 pre-market

Morning traders.

Market wrap:

A volatile finish to US trade after the Federal Reserve held off on new stimulus measures pushed Wall Street lower and left Australian stocks facing a soft start.

The September SPI 200 futures contract ended the night session 10 points or 0.2% weaker at 4216 as a rebound in the US dollar pressured metal prices and resource stocks.

US stocks swung violently in the final hours of trade after the Fed disappointed investors expecting a fresh round of quantitative easing. The S&P 500 plunged after the Fed announcement, rebounded and then faded to a final loss of 0.29%. The Dow lost 33 points or 0.25% and the Nasdaq dropped 0.66%.

"The economic data is ambiguous enough to justify doing something or doing nothing," the chief market strategist at Ameriprise Financial in the US told Bloomberg. "They chose to wait and see. That comes as a disappointment to some people."

The Fed acknowledged the US economy had weakened and said it stood ready to act if required: "The committee will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability."

The ambiguous nature of recent economic data was highlighted during a night where manufacturing data disappointed but US jobs figures were stronger than expected. A US manufacturing gauge stalled under the 50-point level for a second month, improving fractionally to 49.8 from 49.7 in June. The figures added to an impression of declining manufacturing activity around the globe after yesterday's mild deterioration in China and overnight disappointments from Britain and Europe, where activity in the euro-zone hit a three-year low.

Private-sector payrolls data once again raised hopes for Friday's monthly government jobs report. ADP Employer Services said private-company hiring increased by a better-than-expected 163,000 last month from a revised 172,000 in June.

Trading in several US stocks was disrupted by technical glitches in the opening hours of trade, generating swings of more than 10%. Market-maker Knight Capital Group later blamed a malfunctioning trading algorithm. Read more here.

European markets closed before the afternoon ructions in the US, with most advancing on hopes for tonight's European Central Bank policy announcement. France's CAC put on 0.91%, Britain's FTSE 1.38% and Italy's FTSE MIB 0.27%. Germany's DAX eased 0.26%.

Metal prices were pushed lower by a sharp rebound in the US dollar after the Fed announcement, but oil was supported by a big drop in weekly inventories in the US. West Texas crude for September delivery was lately up 77 cents or 0.9% at US$88.83 a barrel after the Energy Information Administration reported a decline of 6.5 million barrels in crude supplies last week. Analysts had expected a figure nearer 1.6 million barrels.

Industrial metals retreated ahead of the Fed statement after manufacturing data from China, Britain and the euro-zone pointed to falling demand for raw materials. In London, copper dropped 1.8% to its lowest level this week, aluminium 1.6%, lead 1.9%, nickel 2%, tin 1.7% and zinc 1.1%. US copper for September delivery was recently down six cents or 1.7% at US$3.36 a pound.

Gold pared its recent advance but clung near the US$1,600 an ounce level as investors held out for tonight's ECB meeting, which may produce an inflationary stimulus announcement. Gold for August delivery was lately down $11 or 0.7% at US$1,599.50 an ounce.

TRADING THEMES TODAY

WAITING FOR THE ECB: In the end it turns out few really expected the Fed to pull the trigger on QE3 last night, so US markets registered only mild disappointment. However, after negatives from the Fed and China's manufacturing data yesterday, the stakes are now very high going into tonight's ECB meeting. President Mario Draghi raised expectations last week with his "whatever it takes" pledge and the market rally over the last week could come crashing down if he under-delivers. Personally, I'll minimise my overnight exposure. Small caps copped the worst of the selling in the US, driving the Russell 2000 index down 2%. Stocks exposed to the rising price of oil also fell sharply. Trade balance and retail sales figures due at 11.30am EST may have a sway in the market's direction this morning.

ECONOMIC NEWS: Monthly trade balance and retail sales figures are due at 11.30am EST. Tonight's main event is the European Central Bank policy announcement. Also tonight in Europe: Bank of England rate statement and a Spanish 10-year bond auction. Highlights in the US include weekly unemployment claims, Challenger job cuts, factory orders and natural gas storage.

Good luck to all.