daytrades april 20 pre-market

Morning traders.

Market wrap: A V-shaped night on Wall Street after upbeat earnings results points to a positive start for Australian stocks this morning.

With 10 minutes left to trade, the June SPI futures contract was up 30 points at 4944, suggesting the local market will recover some of yesterday's heavy losses at the opening bell.

Financial stocks led an afternoon turnaround on Wall Street after Citigroup beat earnings expectations, dragging the spotlight back onto the improving economy and away from the fraud charges against Goldman Sachs that spooked the market on Friday. Also helping sentiment was a bigger-than-expected rise in an index of leading economic indicators last month.

The S&P 500 closed 0.45% higher, the Dow recovered 73 points or +0.67% and the Nasdaq pared its losses to close near break-even at -0.05%.

"Goldman is a big deal, but as far as the overall health of the economy going forward, it's more about earnings," a market commentator told MarketWatch.

Citigroup was the biggest gainer on the S&P 500 after doubling its profit from a year ago - well ahead of consensus expectations that it would break even. The news helped the S&P Bank Index rally 0.9%. Other sectors to recover some of Friday's losses were REITs +0.6% and pharmaceuticals +0.4%. But airlines -2.2% and most resource stocks remained under pressure.

Share in Goldman Sachs bounced 1.6% ahead of tonight's profit report after Bloomberg News reported that the Securities and Exchange Commission voted on party lines to approve charges against the investment bank. Democrat politicians said the charges bolstered the case for for bank-reform legislation.

The turnaround on Wall Street came too late to stem further losses in commodity prices as risk aversion gripped the market. Crude oil futures another $1.48 or 1.8% to $81.76 a barrel.

Copper hit a three-week low as investors sought the safety of the U.S. dollar, making dollar-priced metals more expensive for non-U.S. investors. In London, copper fell 0.8%, aluminium 2.5%, lead 0.9%, tin 2.5% and zinc 0.9%. Nickel rallied 0.9%.

An analyst at Credit Agricole told Reuters that investors were concerned that the Goldman Sachs case could bring new regulations for banks.

"A lot of the price increases [in industrial metals] from 12 months ago have been due to risk taking," he said. "Any measures to curb the banks' risk-taking will have an impact."

Gold hit its lowest level in two weeks but recovered to trade little changed. The spot gold price was recently down $1.20 at $1,135.60 an ounce.

The major European markets remained under pressure from banking jitters and losses among airlines as much of the continent's airports remained closed. Britain's FTSE lost 0.28%, Germany's DAX 0.3% and France's CAC 0.41%.

TRADING THEMES TODAY

U.S. EARNINGS LATE MAIL: The stage looks set for a nice rally this morning but there are still storm-clouds on the horizon: soft overnight commodity prices, yesterday's Chinese meltdown (see below) and a weak profit report from IBM released after the bell in the US. IBM shares were recently down 2.1% as "a soft gross-margin reading" undermined the tech giant's share price in after-market trading. Read more here: http://www.marketwatch.com/story/big-blue-results-on-evening-session-deck-2010-04-19?dist=afterbell

SHANGHAI SURPRISE: Asian markets were predictably weak yesterday as the Goldman Sachs news swept around the globe, but yesterday's 4.8% plunge in China's main share benchmark rings a few alarm bells. The Shanghai Composite dipped below 3000 for the first time in a month as central government moves to rein in property prices sent shares of real-estate developers and banks tumbling. China's State Council announced on the weekend property-sector-tightening measures to curb speculation. Preventing a property bubble in China is in everyone's interest but investors in Australian resources companies should keep a wary eye on how this plays out. A property bust could destroy commodity prices.

ECONOMIC NEWS: Minutes from the Reserve Bank's last meeting to set the cash rate are released at 11.30 am and will be studied for clues to the next rate hike. A relatively quiet night in the U.S. tonight, with the focus likely to be on earnings reports and Fed chairman Ben Bernanke's testimony on Lehman Brothers before the House Financial Services Committee.

Good luck to all.