daytrading dec 5 pre-market

Morning traders.

Market wrap:

Shares are likely to recoup a little of yesterday's losses at today's open despite a soft night on Wall Street after President Obama rejected a Republican budget plan.

The December SPI 200 futures contract ended the night session seven points or 0.2% stronger at 4512 after US stocks fell less than yesterday's soft futures indicated.

A choppy night ended with a late dip of 0.17% on the S&P 500 and Nasdaq during a second night of modest decline. The Dow lost 14 points or 0.1%.

With no significant overnight economic news, markets remained hostage to budget talks in Washington, where President Obama used his first television interview since winning re-election to dismiss a Republican plan to tackle the "fiscal cliff". The president said the Republican proposal unveiled yesterday was "still out of balance" because it excluded tax increases on the country's top earners. "If we're going to raise revenues that are sufficient, we're going to have to see the rates on the top 2% go up. It's just a matter of math," he said.

"We have more of the same and what that really means is that you see very public negotiations that seem to be going nowhere," the managing director at Knight Capital in the US told Reuters. "If there was any conviction that this was going to be a done deal, that we are going to see some really positive resolution on this fiscal cliff, you would see some real activity in the market."

The mood was brighter in Europe, where the euro reached a seven-week high after Greece announced plans to buy back some of its debt at higher prices than analysts expected. That news helped lower bond yields in Spain and Italy. However, the major stock indexes gave up most of their gains as Wall Street traded lower. Germany's DAX finished flat, France's CAC held on to a gain of 0.38% and Britain's FTSE lost 0.04%.

Weakness in the US dollar provided little support for oil and metals, with most losing ground as the budget stalemate in the US capped risk appetite. Oil fell for the first time in four sessions. West Texas crude for January delivery ranged between US$87.57 and US$89.18 and was lately 69 cents or 0.8% weaker at US$88.40 a barrel.

Gold was hit by short-selling during Asian trading hours yesterday, according to a MarketWatch report. Gold for February delivery was recently down $22.70 or 1.3% at US$1,698.40 an ounce.

Copper bucked the downtrend in industrial metals in UK trade but struggled for traction in the US. US copper for December delivery was recently unchanged at US$3.66 a pound. In London, copper rallied 0.4%, but aluminium reversed 1.3%, lead 1%, nickel 0.1%, tin 0.6% and zinc 0.8%.

TRADING THEMES TODAY

WAITING GAME: Hard to see much movement today unless the 11.30am EST GDP figure provides impetus in either direction. Wall Street has barely budged for the last four sessions and may have found an uneasy equilibrium somewhere between hope and pessimism over the budget deadlock. We'll eventually see a sharp breakout, but likely not for some time. The VIX or volatility index remains subdued, which says the market still expects a deal before Jan 1. There was no obvious pattern to sector trade in the US, with some cyclicals and defensives up, some down. The Russell 2000 edged up 0.1% and is showing more resilience than our Small Ords. Trading opportunities are scarce at present. Sometimes you just have to hang in there until better times return.

ECONOMIC NEWS: The services index is due at 9.30am EST, but today's heavy-hitter in a week of big releases is the quarterly GDP result at 11.30am. Europe releases services and retail sales figures tonight. Highlights in the US are ADP's private payrolls report, services PMI, factory orders, crude oil inventories, revised non-farm productivity and revised unit labour costs.

Good luck to all.