Daytrading Jan 29 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

Shares are set for a red open after US stocks retreated as the Federal Reserve stuck to its plan to raise rates, and oil and iron ore declined.

The March SPI 200 futures contract fell 65 points or 1.2% to 5447 as a mildly hawkish policy statement from the Fed cruelled a Wall Street rally fuelled by well-received earnings from Apple and Boeing.

The S&P 500 rallied as much as 12 points in early trade before swooning to a final loss of 28 points or 1.36% as analysts concluded that weak inflation and recent market volatility have not altered the Fed's intention to launch a new rate-raising cycle later this year. The Dow lost 196 points or 1.13% and the Nasdaq 43 points or 0.93%.

“On balance, I viewed [the Fed policy statement] as slightly hawkish,” Anthony Valeri, market strategist at LPL Financial Corp in the US, told Bloomberg. “The equity markets view it as a June hike still being a potential outcome. It’s basically interpreting that the Fed will plough ahead with rate hikes despite low inflation and international woes.”

The policy statement, released halfway through last night's US session, showed minimal change from the December outlook, but adjustments included references to "strong" employment growth and "solid" economic improvements. There was no reference to recent weakness in US economic data as a surging greenback made it harder for US companies to compete overseas. The statement retained the December commitment that the central bank will be "patient" in raising rates from current record low levels. Read more here.

Earlier, US stocks rallied after Apple announced one of the largest quarterly profits for any company in the world and Dow component Boeing beat expectations. Shares in Apple rallied 5.65% on stronger-than-expected sales of iPhones. Boeing put on 5.4%.

Energy stocks were the biggest drag on Wall Street, tumbling 3.94% and pacing a fall in crude after another jump in US supplies. West Texas Intermediate crude oil or March delivery dropped $1.78 or 3.9% to US$44.45 a barrel after the US Energy Information Administration said supplies increased by 8.9 million barrels last week to their highest level since 1924. Read more here.

Gold stocks came under pressure, with the NYSE Arca Gold Bugs Index falling 3.61% as gold for February delivery fell $5.80 or 0.5% to settle at US$1,285.90 an ounce.

BHP and Rio Tinto gave up initial gains in the US as the mood soured. BHP lost 0.95% and Rio Tinto 1.12%. Spot iron ore for import to China yesterday continued its decline, slipping 10 cents to US$62.70 a dry tonne.

Most base metals rallied in London ahead of the Fed statement, but copper gave up its gains in US trade in the aftermath.  In London, copper added 1.01%, lead 0.94%, nickel 1.55% and zinc 0.62%. Aluminium lost 0.16% and tin 0.31%. US copper for March delivery was recently off 0.2% or less than a cent at US$2.46 a pound.

European stocks edged higher in choppy trade as Greece's benchmark index hit a two-year low and corporate earnings offered no clear direction. The Stoxx Europe 600 advanced 0.1% as Germany's DAX rose 0.78%, France's CAC dipped 0.29% and Britain's FTSE put on 0.21%. Greece's Athex Composite index dived 9.24% as the new government made policy changes that put it at odds with its international lenders.

The dollar was this morning buying 79.06 US cents.

TRADING THEMES TODAY

WRONG-FOOTED: So the Fed says nothing has changed and Wall Street throws its toys out of the cot. Presumably the guys who get paid the big money to be smarter than the rest of us had convinced themselves that recent data was weak enough for the Fed to rein in plans to hike. Not so, said the Fed. The charts indicate there is a danger we are nearing an inflection point in the S&P 500 - having failed to make a higher high, another day or two of weakness could bring a lower low that would place a question mark over this long-term up-trend. However, all that is for another day. Today our market has to take the consequences of a mis-step yesterday when it rallied on the expectation that Apple's profit report would boost Wall Street overnight. The result is that we're due a fairly stiff pullback this morning. There was no obvious hiding place in the US - gold miners suffered almost as much as energy stocks. Tech was the only sector to rise and that was entirely due to one company - the big Apple.

ECONOMIC NEWS: A leading index of economic indicators is due at 10am EST, but today's main domestic event is the release of quarterly import prices at 11.30am. Tonight's US highlights are weekly employment claims and monthly pending home sales.

Good luck to all.