daytrades oct 1 pre-market

Morning traders.

Market wrap: The share market may recover some of yesterday's heavy fall at today's open despite modest overnight losses on Wall Street.

The December SPI futures contract this morning closed 11 points stronger at 4611 as futures traders bet that yesterday's 1.2% decline on the local share market was overdone.

Wall Street trimmed its strongest September since 1939 overnight as disappointing regional manufacturing data and end-of-quarter profit-taking overshadowed better-than-expected jobless claims and GDP. An early 110-point rally on the Dow faded to a 47-point or 0.44% loss. The S&P 500 fell 0.31% and the Nasdaq 0.33%.

"Things were due for a pause, this being the last day of the quarter," a managing director at Wedbush Morgan Securities in the U.S. told Bloomberg. "Nothing goes up in a straight line. We've had a hard time making an attempt at higher highs. You're seeing traders exit positions and lock in gains for the quarter."

The market was initially cheered by an upward revision in second-quarter GDP from the previously estimated 1.6% to 1.7% and news that initial jobless claims fell by 16,000 to 453,000. However, investors were unnerved by a fall in a regional employment measure.

Commodities had a mixed night as the U.S. dollar inched higher and China once again clamped down on mortgage lenders, raising concerns about demand for base metals. The dollar index, which rates the greenback against a basket of currencies, was recently up 0.1%.

Base metals ended a strong quarter with minor losses after China yesterday moved to cool its property market by ordering banks to raise the deposits required from 20% to 30%. The news took some of the shine off a quarter in which copper has rallied more than 20%. In late trade in London, copper was off 0.5%, aluminium 0.1%, lead 1.1%, nickel 0.2%, tin 0.3% and zinc 1.8%.

Oil pushed to its highest level since early August as investors focussed on the improvement in U.S. jobless claims and revised economic growth. Crude futures were recently up $1.96 or 2.5% at $79.82 a barrel.

Gold and silver suffered modest declines but held within reach of recent highs. The spot gold price dipped briefly under $1,300 an ounce but recovered to trade recently at $1,309.40, just 50 cents lower than Wednesday's New York close. Spot silver was recently down 14 cents at $21.76 an ounce.

The major European markets fell as ratings agency Moody's downgraded Spain's credit rating and Ireland's central bank confessed how much it will cost the tax-payer to bail out the ailing nationalised Anglo Irish Bank. Britain's FTSE slipped 0.37%, Germany's DAX 0.29% and France's CAC 0.59%.

TRADING THEMES TODAY

BEFUDDLED FRIDAY: I may as well confess I have no idea what to make of last night's overseas action. The start of a down-leg or just end-of-quarter book-squaring? The U.S. economic data was mostly positive and produced a nice initial rally that withered quickly. Commodities were all over the place. Precious metals fell, then partly recovered, base metals were sold off but not heavily considering the news out of China, and oil kept running hard. Local oilers appear an obvious pocket of strength today but energy stocks in the U.S. closed flat to lower. Our market looks marginally oversold this morning, relative to the U.S., but this week's local action has been broadly negative and perhaps indicative of further falls to come.

ECONOMIC NEWS: Another busy session here and in the U.S. The local schedule includes the manufacturing index at 9.30 am, the monthly inflation gauge some time today and the Reserve Bank's monthly index of commodity prices at 4.30 pm. China is again closed for a public holiday. A heavy schedule tonight in the U.S. includes: the manufacturing purchasing managers' index, manufacturing prices, construction spending, vehicle sales, personal spending and income, revised consumer sentiment and inflation expectations, and the consumer price index.

Good luck to all.