Daytrading May 18 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

A cautious open appears likely after US stocks edged to a record as weak economic data dulled the likelihood of a rate rise this year.

The June SPI 200 futures contract improved two points or less than 0.1% to 5749 as declines in Australia's largest miners in overseas trade offset slim gains in US equity indices.

A choppy session in the US ended with the S&P 500 closing less than two points or 0.08% higher at a new all-time high of 2,122.73 as traders bet that a run of soft economic signals this year will force the Federal Reserve to delay lifting rates from record low levels. The Dow gained 20 points or 0.11%. The Nasdaq dropped two-and-a-half points or 0.05%.

A measure of consumer confidence in the US unexpectedly suffered its largest fall in two months this month. The University of Michigan gauge slumped to 88.6, a seven-month low, from a final April level of 95.9. Economists had expected a reading around 94.5. Read more here.

Industrial production declined for a fifth straight month, dropping a worst-than-expected 0.3% during April. The Empire State manufacturing index, which measures activity in the greater New York region, improved to +3.1 from this month -1.2 in April, but fell short of economists' predictions for a rebound to around +5.5.

“The data plays into the renewed concern that economy in the second quarter will move at a glacial place, renewing hope that the Fed won’t move aggressively in 2015,” Chad Morganlander, money manager at Stifel, Nicolaus in the US, told Bloomberg. “The market is listless today and you had a big move yesterday [Thursday] that took everybody by surprise on the back of economic data.”

Overall sentiment was helped by more evidence that sovereign bond markets are settling after a week and a half of sharp declines. The US 10-year yield eased to 2.14% and the German 10-year bund yield to 0.62%.

"The market is reflecting a calmer bond market situation. Yields are down again. That should be supportive to the market," Peter Cardillo, chief market economist at Rockwell Global Capital, told CNBC.

Utilities and consumer discretionary stocks topped the sector gains. Financials and tech stocks declined. The Dow Jones Transportation Average, used by some investors as an early indicator for the direction of the broader market, bounced 0.96% after closing at a seven-month low on Wednesday.

BHP lost 0.44% and Rio Tinto 0.5% in US trade after spot iron ore for import to China on Friday eased 20 cents to US$61 a dry ton.

The energy sector rallied 0.46% as crude oil sealed a ninth straight winning week despite a modest retreat on Friday. West Texas Intermediate crude oil for June delivery settled 19 cents or 0.3% lower at US$59.69 a barrel. Crude's  nine-week win streak is the longest in 30 years, according to MarketWatch.

A late recovery helped gold inch to a three-month closing high. Gold for June delivery settled 10 cents ahead at US$1,225.30 an ounce for a weekly tally of 3.1%. The NYSE Arca Gold Bugs index slipped 0.56%.

A weakening US dollar helped copper edge higher. In London, copper rose 0.2%, lead 0.3% and nickel 1.3%. Aluminium lost 0.8%, tin 0.5% and zinc 0.8%. US copper for July delivery edged up 0.2% to US$2.93 a pound.

European markets retreated as the dour US economic data boosted the euro, undermining the profit outlook for European exporters. The Stoxx Europe 600 declined 0.39%, Germany's DAX 0.98%, France's CAC 0.71% and Britain's FTSE 0.18%.

The dollar was this morning buying 80.46 US cents.

TRADING THEMES TODAY

RECOVERY: The ASX moved into 'recovery mode' last week after two weeks of heavy selling and may continue to repair this week if Wall Street can push further into record territory. Friday was another 'bad news is good' session in the US, where investors continue to view anything that stays the Fed's hand on rates as a reason to celebrate. There may come a tipping point when the market is forced to acknowledge the danger of a recession, but it will take a lot more negative data before that happens. Meantime, the long-term up-trend looks intact and - barring black swans - likely to continue over the short term. Neither resource stocks nor financials were particularly strong in the US on Friday, so this ASX session may not deliver much.

ECONOMIC NEWS: RBA Deputy Governor Phil Lowe is due to address the Corporate Finance Forum in Sydney at 9.30am EST. April vehicle sales data is due at 11.30am. The week in the US gets off to a slow start with a housing market index tonight's only economic release of any note.

Good luck to all.