Daytrading April 1 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

Shares look set to open a new quarter in the red after a reversal on Wall Street and falls in key commodities.

The June SPI 200 futures contract fell 32 points or more than 0.5% to 5854 as US stocks sold off in the final hour of trade and iron ore and nickel plumbed fresh multi-year lows.

The S&P 500 gave up 18 points or 0.88%, with losses accelerating after the index broke intraday support. The fall reduced the benchmark index's ninth straight quarterly gain to 0.4%. The Dow shed 20 points or 1.11% overnight and the Nasdaq 46 points or 0.94%. The declines came as a rally in the US dollar and a fall in oil undermined demand for equities on the last session of the quarter and as traders looked nervously towards the start of a new corporate earnings season next week.

“It’s been a very mixed quarter as we’ve had a directionless market,” David Lafferty, chief market strategist at Natixis Global Asset Management in the US, told Bloomberg. “The market seems to be stuck in a bunch of unknowns. Earnings growth forecasts have really been marked down because of the dollar and oil and the market is struggling to reach new highs.”

The US dollar remained a headwind, rising for a fourth straight night after the president of the Richmond Federal Reserve told a business audience he favoured raising the Fed's key lending rate in June. Jeffrey Lacker, a well-known 'policy hawk', said he expected the US economy to pick up this year and inflation to rise. The US dollar index was lately up 0.39% and has risen 9% for the year, forcing analysts to reduce their profit outlooks for the Q1 earnings season which unofficially gets underway with Alcoa on April 8. The Australian dollar was down around 0.5%, buying 76.2 US cents.

Consumer confidence jumped this month. The Conference Board confidence index rose to 101.3 from a revised 98.8 last month. A gauge of business activity in the greater Chicago region lifted to 46.3 this month from 45.8 in February but fell well short of the 51.5 expected by economist.


Iron ore hit a new seven-year low yesterday, extending its quarterly decline to around 30%. Spot iron ore for import to China slumped $1.90 or 3.6% to US$51 a dry tonne. Read more here. In US trade overnight, BHP lost 1.5% and Rio Tinto 2.29%.

Oil fell for a fourth session as international negotiators worked on a deal over Iran's nuclear program that has the potential to release Iranian crude supplies back onto an oversupplied market. West Texas Intermediate crude oil for May delivery settled $1.08 or 2.2% lower at US$47.60 a barrel. US energy stocks dropped 0.59%.

US gold stocks lost 1.67% as the precious metal fell for a third night. Gold for June delivery settled $2.10 or 0.2% lower at US$1,183.20 an ounce.

Nickel tumbled to its weakest price in almost six years in London trade following news of record stockpiles earlier this week. In London, nickel shed 3.8%, copper 0.7%, aluminium 0.7%, lead 0.2%, tin 2.6% and zinc 1.3%. US copper for May delivery was recently off 1.5% at US$2.74 a pound.

European stocks ended their best quarter in five and a half years on a low note as traders booked profits following weak employment news. The Stoxx Europe 600 retreated 0.64% as Germany's DAX lost 0.99%, France's CAC 0.97% and Britain's FTSE 1.72%. The Stoxx 600 has put on 16% this quarter, its strongest return since the third quarter of 2009.

TRADING THEMES TODAY

WEAK AHEAD OF CHINA: The market is zig-zagging frantically at present, unable to put together back-to-back moves in either direction. Wall Street ended the quarter with another sell-off overnight, which - combined with a bad session for commodities - should be enough to ensure a soft start here. The mood may or may not improve when China releases March manufacturing and services reports later in the morning (see below). Iron ore is desperately close to the psychologically-significant US$50 mark. A breach could see capitulation selling here.

ECONOMIC NEWS: The AIG Manufacturing Index is due at 9.30am EST and building approvals at 11.30am. China releases 'official' manufacturing and services indexes at noon. HSBC releases the final version of its rival Chinese manufacturing measure at 12.45pm. A busy night ahead in the US includes the ADP Non-Farm Employment Change report, rival manufacturing PMIs, manufacturing prices, construction spending, crude oil inventories and more Fed talking heads.

Good luck to all.