daytrade diaries... november 6

Morning traders.

Market wrap: The Australian stock market is primed for a boom open after a swag of positive economic signals fired Wall Street higher overnight.

A drop in jobless claims and a positive outlook from tech industry bellwether Cisco helped the Dow Jones regain the 10,000 mark during a session that began well and kept getting better. By the close, the Dow had risen 204 points or 2.08%, the S&P 500 was up 1.92% and the Nasdaq 2.42%.

Investors were cheered by news that worker productivity surged at the fastest pace in six years, labour costs fell and unemployment claims were lower than forecast. Productivity surged at a 9.5% annual rate in the third quarter, exceeding all forecasts. Initial jobless claims dropped by 20,000 to 512,000 last week, the fewest since January. Labour costs fell at a 5.2% rate, completing the biggest 12-month drop since records began in 1948.

The rising tide lifted nearly all boats. Standout sectors included: telecoms +3%, banks +2.95%, industrials +2.81%, biotechs 2.77%, airlines 2.59%, REITs +2.19% and natural gas +2.15%.

European markets continued yesterday's rally after the Bank of England and European Central Bank left interest rates at record lows and key companies beat earnings expectations. Britain's FTSE gained 0.35%, Germany's DAX 0.67% and France's CAC 1.05%.

Crude oil futures retreated for the first session in four on demand worries and strength in the US dollar. Crude was trading recently at $79.86 a barrel, down almost 1%. The spot gold price has been tracking sideways for the last 24 hours, recently trading virtually unchanged at $1090.80.

Base metals continued the recent gentle retrace as another jump in copper stockpiles underscored demand worries. In London, copper slipped 0.68%, aluminium -0.05%, lead -1.06%, nickel -0.7%, tin -0.67% and zinc -1.08%.

Futures traders expect a big open on our market this morning. The SPI futures index closed 59 points higher at 4571.

TRADING THEMES TODAY

US EMPLOYMENT: It's great to see some strength in the US but any rally on our market today will be tempered by tonight's pending US October employment figures. The great American "jobless recovery" badly needs evidence that employers are starting to hire. Remember how last week played out in the U.S.? Big surge on Thursday, complete reverse on Friday? U.S. markets will turn on a dime if tonight's numbers don't support this latest upswing. I'll wait to see what tonight brings before considering any overnight holds. We've been here before.

ECONOMIC NEWS: The Reserve Bank releases its quarterly monetary policy statement today at 11.30 am. The statement should provide some insight into the likely pace of interest rate rises in the months ahead. All eyes will be on tonight's swag of employment indicators in the US. Also due tonight: wholesale inventories and consumer credit.

Good luck to all.