daytrading oct 16 pre-market

Morning traders.

Market wrap:

Shares have a positive platform for the day after strength in US and European stocks offset a soft session for metals.

The December SPI 200 futures contract firmed 28 points or 0.7% to 4509 at the end of the night session as US retail sales exceeded expectations and Citigroup led a recovery in financial shares.

Cyclical stocks steered the S&P 500 up 0.8% following its worst week in four months. The Dow put on 95 points or 0.71% and the Nasdaq added 0.65%.

"The retail sales report looked a little bit better than expected," the chief investment officer at Palisade Capital Management in the US told Bloomberg. "The direction of the economic data is positive, but we're moving at a very slow pace and the market is very fragile to external shock. The big question regarding earnings is whether expectations have come down enough so that companies can beat guidance."

Retail spending increased a seasonally-adjusted 1.1% last month and sales for August and July were revised higher. Economists surveyed by MarketWatch had tipped an increase of 0.9%. A separate report showed manufacturing activity in the New York region remained in the doldrums, contracting for a third straight month.

Financial stocks were among the standouts leading into a busy week of third-quarter earnings results after Citigroup announced it will slash jobs and sell non-core assets. Shares in the banking giant rallied 5.47% despite a slump in Q3 profit.

European stocks recouped some of last week's fall following strong Chinese trade data on the weekend and a mild inflation reading yesterday that left the authorities room to stimulate the economy further, if needed. Germany's DAX advanced 0.39%, France's CAC 0.91% and Britain's FTSE 0.22%.

Metals were pressured by strength in the US dollar, but oil was lately little changed after the greenback came off its highs. During a choppy session, West Texas crude plunged as low as US$89.79 before lately trading just 19 cents or 0.2% weaker at US$91.68 a barrel. Commentators attributed the turbulence to signs of easing tensions in the Middle East as Iran adopted a more conciliatory tone towards international authorities over its nuclear program.

Gold fell to its lowest level in around a month before finding support at its 50-day moving average. Gold for December delivery was recently down $21 or 1.2% to US$1,738.70 an ounce after dropping as low as US$1,729.70.

"Gold's lack of follow-through on its recent rally is leading traders with itchy trigger fingers to sell," the editor of Gold Newsletter told MarketWatch. "Right now the gold market is stuck in the gray area between the QE3 hype and the reality of this money-printing actually hitting the economy. In addition, it's going to be difficult for gold to mount a sustained upward move until after the presidential election provides some clarity as to the direction of US economic policy going forward."

Most industrial metals lost ground as traders interpreted Saturday's strong trade data as reducing the prospects for near-term easing in China. US copper for December delivery was recently down 0.1% or less than a cent at US$3.70 a pound after earlier falling as low as US$3.66. In London, copper lost 1.7%, aluminium 1.6%, lead 1.3%, tin 1.2% and zinc 1.2%. Nickel edged up 0.1%.

TRADING THEMES TODAY

RALLY RESUMES: An important session for US stocks saw the S&P 500 kick clear of danger (for now at least) after breaching its 50-day moving average and setting a one-month low at the end of last week. Technically the chart looks vulnerable, but bulls can breathe a sigh of relief after Citigroup helped improve the uncertain mood this earnings season. The ASX has been marking time for the last week but now has reason to push higher, assuming the resource sector is not unsettled by overnight wobbles in metals. US resource stocks mostly took the declines in their stride. Small caps trailled for much of the night in the US but narrowed the gap on the blue chips by the close.

ECONOMIC NEWS: The minutes from the last Reserve Bank policy meeting are due at 11.30am EST. Europe releases a wave of economic data tonight, including economic sentiment, trade balance and inflation figures. Highlights in the US include consumer inflation/core CPI, industrial production, long-term purchases, capacity utilisation rate and the housing index.

Good luck to all.