daytrades september 2 pre-market

Morning traders.

Market wrap: Australian stocks are set to open at a three-week high after upbeat U.S. and Chinese manufacturing data lit a fire under equity and commodity markets.

The September SPI futures contract this morning closed 74 points stronger at 4567 as a wave of optimism swept world markets. Wall Street had its best session since early July, European equities rebounded sharply and oil and industrial metals kicked higher.

The Dow rallied 255 points or 2.54% for its biggest gain in almost two months after U.S. factory activity ticked up last month, easing fears about a slowdown in the American economy. The S&P 500 added 2.95% and the Nasdaq 2.97%.

"There's a sigh of relief among the long-only funds and the short sellers are saying that maybe the sell-off is over," a U.S. fund manager told Bloomberg. "That's why we get this explosion in the market after the mostly negative economic data from the U.S. throughout the summer."

The market was cheered strong manufacturing news in the last 24 hours: the first increase in U.S. manufacturing in four months and yesterday's better-than-expected Chinese numbers. The U.S. Institute for Supply Management's closely-watched index of factory activity rose from 55.5 in July to 56.3 last month, while a Chinese government-backed report improved from 51.2 to 52.7. Readings above 50 indicate expansion.

Australian miners listed on U.S. indexes enjoyed huge gains as materials companies were snapped up on hopes that the demand outlook for commodities is stronger than expected and recent falls in share prices are overdone. Rio Tinto surged 7.3%, BHP 5.47% and Alumina 7%.

The U.S. dollar was dumped as investors rotated into riskier assets, easing prices of dollar-denominated commodities for overseas buyers. The dollar index was recently down 0.9%.

Oil had its biggest single-day gain in a month. Crude futures rallied $2.08 or 2.9% to $74 a barrel.

Copper hit a four-month high as stockpiles fell to their lowest level since November last year. In late trade in London, copper was up 2%, aluminium 2.3%, lead 2.2%, nickel 1.9%, tin 1.1% and zinc 3.7%.

Gold came within a whisker of the June 18 record high before falling prey to the global switch into riskier assets. The spot price was recently $3.50 lower than Tuesday's New York close at $1,244.20 an ounce after earlier touching $1,255.

The major European markets flew higher. Britain's FTSE rallied 2.7%, Germany's DAX 2.68% and France's CAC 3.81%.

TRADING THEMES TODAY

MINING: A huge night for our U.S. listed miners promises more to come this morning. Rio, BHP and AWC were all up at least 5.5% in the U.S. and that should feed through to a very strong start to the session here. Manufacturing data over the last 24 hours has alleviated fears of a global slowdown that would strip demand for commodities. We should see a rally in our mining sector that could last weeks, rather than days.

ECONOMIC NEWS: Local monthly trade balance figures are due at 11.30 am. An exceptionally busy schedule tonight in the U.S. includes: unemployment claims, monthly pending home sales, testimony from Federal Reserve chairman Bernanke, revised non-farm productivity, revised unit labour costs, factory orders and natural gas storage.


PS I'm happy to announce the birth of a second son yesterday. Mother and ankle-biter are doing well in hospital. Thanks for the kind wishes over the last few days. I plan to work most of today/tomorrow and then take next week off for some family time. Life is good.

Good luck to all today.