daytrades august 6 pre-market

Morning traders.

Market wrap: Local shares face a flat start to trade after more jobs jitters on Wall Street and declines in key commodities.

The September SPI futures contract inched 3 points higher this morning to 4540 as the major U.S. share indexes once again fell in early trade, but pared losses before the closing bell. The Dow finished the session just 5 points or 0.05% weaker, despite an unexpected jump in jobless claims and mixed retail sales that added to evidence that the U.S. economic recovery is staggering.

The S&P 500 closed 1 point or 0.13% down, while the Nasdaq lost 0.46% as tech stocks and small caps underperformed. Resource stocks fared better than most sectors despite losses for oil and industrial metals ahead of tonight's U.S. monthly payrolls report.

Initial jobless claims rose to a three-month high, increasing by 19,000 to 479,000 last week, worse than the highest estimate of economists surveyed by Bloomberg. Retail stocks were sold off after July sales missed expectations.

"With the bump in jobless claims, there is a lot of nervousness in front of [tonight's] monthly unemployment numbers, and fears that the number is going to come out above expectations," an analyst for Country Hedging in the U.S. told Reuters.

Oil and base metals were dragged lower. Crude futures were recently down 32 cents or 0.4% at $82.15 a barrel.

Industrial metals were also hurt by speculation over the meaning of China stress testing its banks for significant falls in real-estate values. In late trade in London, copper was off 1.5%, aluminium 1.5%, lead 2.6%, nickel 0.6% and zinc 1.4%. Tin was up 0.1%.

Gold consolidated its recovery over the last week, supported by China's decision to expand the market for the precious metal. The spot price was recently 80 cents weaker than Wednesday's New York close at $1,194.80 an ounce.

Early gains in Europe mostly disappeared after news of U.S. jobless claims hit the market. Britain's FTSE closed 0.38% lower, while Germany's DAX rallied 0.04% and France's CAC 0.09%.

TRADING THEMES TODAY

BUY THE DIPS: Another night of economic disappointment in the U.S. produced the now-familiar pattern of a sharp sell-off followed by a steady recovery. The resilience of the market right now is extraordinary - it does not want to go lower, no matter how grim the portents for the future. U.S. traders are buying every dip. Something will have to give eventually - perhaps as soon as tonight's employment report - but until the trend changes it will be profitable to bury any doubts and run with the bulls.

AGRICULTURE: Drought in Russia has lit a fire under the price of wheat, corn and other farm produce. Wheat futures jumped 8% in Chicago overnight, touching the highest price in nearly two years, while corn hit a 13-month high. American listed agricultural companies rallied accordingly. For a big agricultural producer, Australia has relatively few listed companies. Can anyone offer any insight on local beneficiaries, beyond the likes of GNC and AWB, currently in merger negotiations?

ECONOMIC NEWS: The local monthly Performance of Construction Index is released at 9.30 am, then the RBA's quarterly monetary policy statement at 11.30 am. The U.S. tonight is all about jobs: the unemployment rate and non-farm employment changes. Monthly consumer credit data are also due.

Good luck to all.