daytrades dec 2 pre-market

Morning traders.

Market wrap: A wave of upbeat economic news from around the world fuelled Wall Street's best session in three months and points to a strong start to Australian trade today.

The December SPI futures contract this morning closed 62 points or 1.35% higher at 4657 as European and U.S. share markets rebounded overnight. Oil, industrial metals and Australian miners listed overseas all rallied.

The gains came as data from the U.S. and Europe added to global optimism following yesterday's strong Chinese manufacturing numbers. U.S. equities jumped at the open after a private-sector jobs report showed the biggest monthly rise in three years and equity gains accelerated after a later report suggested the U.S. will help with an expanded bailout fund for Europe.

The S&P 500 recorded its largest one-day gain in three months, climbing 26 points or 2.16%. The Dow rallied 250 points or 2.27% and the Nasdaq added 2.05%.

"There's a growing recognition that the [U.S.] economy may not be in anywhere as bad shape as people thought," a market strategist with Financial Network in the U.S. told MarketWatch. "We were talking about a double dip just two months ago when the news was mixed, but now the news isn't even mixed, and I think the market is pricing that in accordingly."

A jobs report showed the economy added 93,000 private-sector jobs in November, topping the 70,000 expected by economists and raising expectations for tomorrow's monthly government jobs report. A measure of manufacturing fell less than expected last month and the Federal Reserve's "Beige Book", released late in the session, confirmed that the economy is improving in most of the U.S.

European markets were cheered by better-than-expected October retail sales in Germany and a 16-year high for a British manufacturing survey. The news combined with reports of a fresh effort to contain the sovereign debt crisis to fire European share indexes to their biggest gains in three months. Spain's IBEX 35 surged 4.44%, Britain's FTSE 2.07%, Germany's DAX 2.66% and France's CAC 1.63%.

There were big gains for Australian miners listed overseas as oil and base metals rallied. In U.S. trade, AWC added 4.87%, BHP 3.82% and RIO 3.84%. The Australian dollar erased yesterday's losses, rising nearly a cent to 96.9 U.S. cents as traders abandoned the U.S. dollar for riskier assets.

Oil made its biggest advance in two months, rising to a two-week high. Crude futures were recently up $2.59 or 3.1% at $86.70 a barrel.

Aluminium topped gains during a strong session for base metals as yesterday's Chinese manufacturing reports and a weaker U.S. dollar boosted buying interest. In late trade in London, copper was up 3.5%, aluminium 3.7%, lead 2.5%, nickel 2.8%, tin 1.3% and zinc 3.2%.

Precious metals consolidated yesterday's breakout but trailled base metals as rising risk appetite drew funds elsewhere. Spot gold was recently 20 cents weaker than Tuesday's New York close at $1,387 an ounce. Spot silver was 33 cents stronger at $28.44 an ounce.

TRADING THEMES TODAY

UP WE GO: Bulls rejoice. The rally is back on. As I said yesterday, recent U.S. data pointed to a Wall Street rally if the spotlight moved off the European debt crisis and last night a happy combination of strong economic reports from China, Europe and the U.S. achieved that. The major U.S. indexes broke out of their recent trading ranges, which suggests there are likely to be more gains in the days ahead. December is historically the strongest month of the year in the U.S. on the back of the so-called "Santa rally". I'll add the usual caveat that our market tends to "fade" big opens like the one we have coming, so it won't necessarily pay to buy at the opening bell. The opening prices in these conditions are often the highest of the day. The most reliable trades in my opinion will be breakouts if you can snag them early.

PULSE OF THE NATION: While recent data out of the U.S. shows an economy starting to accelerate, here in Australia recent data suggests a loss of momentum. Yesterday's GDP and manufacturing numbers were the latest to disappoint. Two reports this morning at 11.30 am will offer further insight into the state of the economy: monthly retail sales and the trade balance. The recent trajectories of our major retail shares suggest expectations for the Christmas shopping season are subdued: the charts of HVN, JBH, DJS and MYR do not make for pretty reading. Any surprise to the upside in today's data may offer trading opportunities from these levels.

ECONOMIC NEWS: Monthly retail sales and trade balance numbers are due at 11.30 am (see above). Weekly unemployment claims and monthly pending home sales are the headline items in the U.S. tonight. Also due: natural gas storage. There will also be unusually high interest in the monthly European Central Bank press conference.

Good luck to all.