daytrades dec 3 pre-market

Morning traders.

Market wrap: A second day of gains is in prospect following Wall Street's biggest two-day rally since September and strengthening overnight commodity prices.

The December SPI futures contract this morning rallied 45 points to 4736, suggesting the local share market should open around 1% stronger on the back of yesterday's 2% advance.

U.S. stocks advanced as domestic economic reports again topped expectations and the European Central Bank extended an emergency loan program to deal with the continent's grinding sovereign debt crisis. European stocks, oil and metals all rallied.

The S&P 500 climbed 1.28% for a 3.5% gain for the first two days of December. The Dow added 107 points or 0.95% and the Nasdaq 1.17%.

"Economic data is looking better all around," Ryan Atkinson, vice-president at Balestra Capital told CNN. "Data has continued to beat expectations over the past few weeks, so investors are staying hopeful that the economy will continue to grow."

Sales data from chain stores including Target and Abercrombie & Fitch confirmed that Americans are starting to shop again, coming in well above expectations. Shares in home-builders jumped after an index of pending home re-sales unexpectedly surged a record 10% in October. The news overshadowed a disappointing rise in jobless claims by 26,000 to 436,000 last week, which raised doubts about the strength of tonight's monthly jobs report.

Also helping sentiment was a prediction by Goldman Sachs that the S&P 500 will rally 20% by the end of next year. Financial stocks were particularly strong after Goldman upgraded the sector to "overweight".

European stocks had a second night of significant gains after the European Central Bank extended emergency liquidity measures and committed to buying more government bonds. Credit-default swaps for European debt eased for a second day as optimism increased that European leaders are taking more decisive action to contain the problem. Spain's IBEX 35 added another 2.8% to Wednesday's 4.4% gain, Britain's FTSE rallied 2.22%, Germany's DAX 1.33% and France's CAC 2.12%.

Oil extended this week's rally, supported by momentum traders and further weakening in the U.S. dollar. Crude futures were recently up $1.27 or 1.5% at $88.02 a barrel.

Industrial metals rallied to multi-week highs as U.S. data pointed to improving demand. In late trade in London, copper was up 1.6% to a three-week high, aluminium up 0.6%, lead 4%, nickel 0.8%, tin 3% and zinc 3.7%.

Silver advanced and gold was little changed as a brief push towards the $1,400 an ounce level faded. Spot gold was recently $2.10 weaker than Wednesday's New York close at $1,384.50 an ounce. Spot silver was up 17 cents at $28.59 an ounce.

TRADING THEMES TODAY

EXTENDING THE RALLY: We're looking at another bright start as the best rally on our market for several months extends to a second day. The overnight action was once again very supportive, with gains in sectors central to our market as U.S. indexes held strong through to the closing bell. Momentum is strong. Two small notes of caution: firstly, the temptation for traders to lock in profits on Friday afternoons is always strong, particularly after a run of this strength; and secondly, the weekly U.S. jobs report disappointed, which means tonight's monthly report may not meet expectations.

INDUSTRIAL METALS: With "risk trades" well and truly back on, there have been breakouts in all of the major base metal charts over the last two nights. Chinese manufacturing has not been slowed by tighter lending restrictions, the U.S. is turning higher and Europe and India released strong numbers this week. The prospect of a shortfall is driving copper, with new highs tipped next year. There appears to be plenty of upside in mining stocks that have not yet reacted to recent price movements.

ECONOMIC NEWS: The monthly Performance of Services Index is due before the opening bell at 9.30 am. The big items tonight in the U.S. are the monthly employment figures - unemployment rate, non-farm employment change - and the non-manufacturing purchasing managers' index. Monthly factory orders and average hourly earnings are also scheduled.

Good luck to all.