daytrades dec 13 pre-market

Morning traders.

Market wrap: The share market is likely to open at a fresh four-week high following gains on Wall Street on Friday that over-shadowed a mixed session for key commodities.

The December SPI futures contract ended 12 points or 0.25% stronger at 4771 after the S&P 500 closed at a two-year high and ahead for the fourth straight night.

The S&P rallied 0.6%, pushing further through a key overhead resistance level, as U.S. consumer confidence figures beat expectations and industrial bellwether stock General Electric raised its dividend. The Nasdaq added 0.8% - its eighth straight gain - and the Dow was up 0.35%.

Consumer confidence in the U.S. rebounded to its highest level since June, raising hopes for the Christmas shopping season. Also helping sentiment was a jump in U.S. exports in October to their highest level in two years.

Australian miners listed in the U.S. closed stronger despite dips in oil and most metals. Rio Tinto rallied 0.77%, BHP 0.5% and Alumina 2.81%.

Copper neared a record high following strong Chinese import data, but most other metals eased. In London, copper rallied 0.8% and nickel gained 1.7%, but aluminium fell 1.4%, lead 0.3%, tin 0.3% and zinc 1.2%.

Oil and gold were pressured by demand fears on expectation of an interest rate rise in China over the weekend (see below). Crude futures dropped 58 cents or 0.7% to $87.82 a barrel. Gold for February delivery eased $7.90 or 0.6% to $1,384.90 an ounce.

The major European markets closed mostly higher. Britain's FTSE rallied 0.09% and Germany's DAX 0.6% but France's CAC fell 0.02%.

TRADING THEMES THIS WEEK

BANKING REFORM: The federal government's bank reform package was delivered over the weekend to mixed reaction. I'll leave the specifics to those better placed to address them, but the overall impression is of a plan that falls some distance short of the market's worst fears. Commentators said the bottom lines of the big four were unlikely to be seriously affected. The market had arguably priced in something more damaging, so we might see a relief rally this week.

CHINESE INFLATION: The market will this morning have its first chance to react to news out of China over the weekend: inflation soared from 4.4% to 5.1%, well ahead of expectations of a figure around 4.7%, but the central bank did not raise interest rates, as widely tipped. Market commentators said the central bank's failure to act raised the prospect of asset bubbles and a sharp tightening cycle next year. It will be interesting to see how our market responds.

CHRISTMAS POSITION-SQUARING: We're drifting towards the Christmas holiday "doldrums" when many traders, both institutional and private, take a well-earned break. Recent history shows the week ahead is likely to show strong trading volume as traders square their positions ahead of the holidays. Trading volume will then fall away from next week and is unlikely to pick up until mid-late January. There will be fewer company announcements during the Christmas holidays. Collectively, this will reduce the number of trading opportunities, although sharp moves will still be possible because thin trade tends to exaggerate volatility.

ECONOMIC NEWS: Plenty happening this week, here and overseas. The local calendar kicks off at 8.45am today with testimony from Reserve Bank Governor Glenn Stevens at the inquiry into competition in the Australian banking sector. The rest of the week brings: business confidence, housing starts (tomorrow); consumer sentiment, motor vehicle sales (Wed); and the RBA Bulletin, inflation expectations (Thu). The U.S. makes a quiet start to the week - nothing scheduled tonight - and then delivers a blizzard of news, with the key reports likely to include: the producer price index, retail sales, inventories (tomorrow); consumer price index, Empire state, industrial production (Wed); weekly jobless claims, housing starts, Philly Fed (Thu); and leading indicators (Fri).

Good luck to all.