daytrading sep 5 pre-market

Morning traders. Tin hats on.

Market wrap: A grim US jobs report and further cracks in the Greek bailout plan have Australian shares pointed sharply lower this morning.

The September SPI futures contract closed 63 points or 1.5% weaker at 4174 on Saturday morning after a wave of selling dragged the major US and European indexes down between two and three per cent on Friday.

Rumours about zero US jobs growth that swept Australian trading rooms on Friday proved correct: the August payrolls report was unchanged from the previous month, the weakest result in 11 months. With US markets already on edge from further strains in the Greek rescue plan, the Dow sagged 253 points or 2.2%. Heavy losses among financial shares steered the S&P 500 down 2.53% after the Federal government sued 17 of the biggest lenders for misrepresenting mortgage-backed securities in the lead-up to the GFC. The Nasdaq fell 2.58%.

Economists' hopes for modest jobs growth of 68,000 last month proved over-optimistic, with the employment market at a standstill. The unemployment rate held steady at 9.1%.

"Another disappointing report that speaks to a severe unemployment crisis that, unfortunately, is becoming even more stubbornly embedded," the chief executive officer at Pimco in the US told Bloomberg. "Along with Europe's dislocations, this fuels concerns about the global economic outlook and the growing risk of a recession."

Bank of America slumped 8.3% and JP Morgan Chase 4.6% as the Federal Housing Finance Agency filed lawsuits against them and 15 other lenders who sold mortgage-backed securities to government-backed Fannie Mae and Freddie Mac. The suits allege that Fannie Mae and Freddie Mac were misled over the quality of the mortgages behind the securities.

Discussions over a second bailout package for Greece were suspended amid concerns over Greece's ability to meet deficit targets. The European Union, International Monetary Fund and European Central Bank said there would be a 10-day break in talks to allow Greece to work on the plan. The news appeared to catch the market by surprise and helped send Greece's benchmark share index down 3.2%, Britain's FTSE 2.34%, Germany's DAX 3.36% and France's CAC 3.59%.

Gold was the session's big winner as investors abandoned risk assets for safer waters. Gold for December delivery rallied $57.60 or 3.15% to US$1,886.70 an ounce - just $5 shy of the $1,891.90 settlement record from a week and a half ago. December silver jumped $1.77 or 4.3% to US$43.30 an ounce, up more than 5% for the week.

Oil slumped following the US jobs data. Crude for October delivery dropped $2.28 or 2.6% to US$86.65.

Industrial metals also lost ground. In London, copper fell 0.6%, aluminium 0.6%, lead 3.4%, nickel 1.3%, tin 0.3% and zinc 1.85%. US copper fell 1%.

"People were expecting a bad [US jobs] number - but maybe not quite so bad a figure - so you had this knee-jerk sell-off," an analyst at Standard Bank told Reuters. "It continues to paint a pretty ugly picture in terms of US economic health, and follows on from poor European data yesterday. It's not a fantastic backdrop for base metals."

TRADING THEMES THIS WEEK

BACKTESTING THE RECOVERY: A negative start to the trading week appears unavoidable after a fairly brutal Friday session in the US and especially Europe. Our market pre-empted some of the overseas falls on Friday and therefore shouldn't have as much to give back today, but a test of the August 22 "higher low" may be on the cards in the days ahead unless sentiment improves.

US HOLIDAY: US markets are closed tonight for the Labor Day holiday. Unfortunately, that means we're stuck with Friday's lousy lead for the next two sessions.

TIDE OF DOMESTIC DATA: There is no shortage of potential market-moving domestic news this week, with an interest rate decision tomorrow, quarterly growth figures on Wednesday and employment figures on Thursday. Finally, Friday brings the monthly economic round-up from China.

SILVER AND GOLD: The obvious havens following Friday's abrupt flight from risk are precious metals. Gold is within a few dollars of a new record high. Silver and gold miners should weather this latest downturn better than most.

ECONOMIC NEWS: A busy week for domestic news includes: the services index at 9.30 am AEST, inflation gauge at 10.30 am, job ads and company operating profits at 11.30 am (all today); home loans, current, account, cash rate and Reserve Bank rate statement (tomorrow); GDP and construction index (Wed); and employment change and unemployment rate (Thu). A holiday-shortened week in the US is unusually lean on economic data. The key reports are likely to be: ISM services (tomorrow night); and weekly jobless claims and trade deficit (Thu). Also on Thursday, Federal Reserve Chairman Ben Bernanke is due to deliver a speech amid hopes of new plans to stoke the economy and
President Obama will address a joint session of Congress.

Good luck to all.