daytrades oct 18 pre-market

Morning traders.

Market wrap: Mixed leads from Wall Street and commodity markets point to a soft start to local trade this morning.

The December SPI futures contract closed 16 points or 0.34% weaker at 4686 on Saturday morning as a bounce in the U.S. dollar undermined the recent rally in metals and oil, and Wall Street was hamstrung by a drop in consumer confidence.

A surge into technology shares after a strong earnings report from Google helped the Nasdaq and S&P 500 finish Friday in positive territory, but the Dow limped to a loss after GE missed revenue targets. The S&P 500 added 0.2% on Friday to end the week 1% ahead. The Nasdaq charged 1.37% and the Dow fell 0.29%.

A measure of consumer sentiment in the U.S. eased to 67.9 this month from 68.2 at the end of September, below economists' expectations. Other economic measures were stronger. Retail sales were better than forecast last month and manufacturing in the New York region expanded faster than anticipated.

"We're missing confidence - all the other ingredients are there," the chief investment officer at Palisade Capital Management in the U.S. told Bloomberg. "Companies have the profitability thing figured out. The missing ingredient is that top-line growth."

Financial stocks were the weakest sector as investors dumped banks potentially affected by a nationwide investigation into mortgage foreclosure practices. Banks with large mortgage portfolios were thumped for a second straight session, with Bank of America shares falling 8.6% during the week.

The U.S. dollar rebounded from 10-month lows as a speech from Federal Reserve Chairman Ben Bernanke repeated the need for further economic stimulus but failed to reveal any new details. The dollar index, which tracks the greenback against six major currencies, rallied 0.5% on Friday but was still lower for the sixth straight week.

The rising dollar clipped strong weekly gains in precious metals. December silver dropped 15 cents or 0.6% to $24.29 an ounce and December gold eased $8.70 or 0.6% to $1,369 an ounce.

Oil closed lower for the week as a soft U.S. weekly inventory report continued to weigh on demand. Crude futures fell $1.44 or 1.7% to $81.48 a barrel on Friday for a weekly loss of around 1.7%.

Industrial metals ended a solid week mostly modestly lower. Analysts pointed to profit-taking as the rise in the U.S. dollar eroded metals' appeal as an alternative investment. In London, copper edged 0.1% higher but aluminium fell 1.6%, lead 0.1%, nickel 1.6%, tin 2% and zinc 0.2%.

The major European markets once again finished mixed. Britain's FTSE fell 0.42% but Germany's DAX rallied 0.57% and France's CAC 0.21%.

TRADING THEMES THIS WEEK

SOARING DOLLAR: No apologies for repeating this theme from last week after the Aussie briefly reached parity with the U.S. dollar on Friday. The Aussie hit $US1.0002 just after 11 pm on Friday and this morning is trading around 99.36 cents. There are winners and losers from the Aussie's rapid ascent and it will reward investors and day-traders to understand which companies in their portfolio fall into each category. There are likely to be more currency-related surprises this week after CSL last week warned how the strong dollar will undermine its profit outlook.

U.S. EARNINGS: The third-quarter earnings season in the U.S. accelerates this week, with 11 Dow components and 109 S&P 500 companies due to report.

CHINESE THURSDAY: With the world increasingly dependant on China to fuel global growth, Chinese economic data has a growing significance for our market's intraday action. Thursday brings the monthly readings on the Chinese economy, including GDP, CPI, PPI, retail sales and industrial production.

ECONOMIC NEWS: Monthly new motor vehicle sales are due today at 11.30 am. The rest of the week brings: RBA monetary policy meeting minutes (tomorrow); monthly leading index (Wed); and quarterly import prices (Fri). Housing dominates the early part of the week in the U.S. This week's key economic reports are: industrial production, home builders' index (tonight); housing starts (tomorrow); jobless claims, leading indicators, Philly Fed (Thu).

Good luck to all.