daytrades feb 2 pre-market

Morning traders.

Market wrap: A surge in US stocks to new post-recovery highs has set up a bright start to Australian trade this morning.

The March SPI futures contract ended the night session 42 points or 0.9% higher at 4765 after upbeat manufacturing data from China, Europe and the US drove the Dow to a close above 12,000 for the first time in two and a half years. Copper and tin hit record highs and aluminium and nickel hit two-year highs, but oil retreated as tensions eased in the Middle East.

The Dow charged 148 points or 1.25% to 12,040, the first time it has finished above 12,000 since the middle of 2008. The S&P 500 had its best session in two months, rising 1.67% and erasing last Friday's sharp loss. The Nasdaq added 1.89%.

"The US is exiting the recovering phase and moving towards long-term expansion," the chief investment strategist at MFS Investment Management in the US told Bloomberg. "Last week, we saw in GDP numbers that consumer spending is pushing head. Today we confirmed the manufacturing sector is very strong."

A gauge of manufacturing strength in the US showed the sector accelerating at the fastest pace since 2004. The Institute for Supply Management index improved to 60.8% last month from 58.5% in December. The data added to optimism about the global outlook following a report showing increasing manufacturing activity in Europe and yesterday's solid Chinese manufacturing reports. Also helping sentiment in the US was a string of better-than-expected earnings reports from the likes of UPS and Pfizer.

Resource stocks in the US were boosted by another slide in the US dollar, which helped fuel gains in metals prices. BHP rallied 2.7% in US trade, Rio Tinto 2.55% and Alumina 2.7%. The dollar index slipped 1% to 76.98 as risk appetite picked up after last week's Egyptian jitters.

Copper marked a new record high as manufacturing data from the US and China encouraged optimism about global growth. Tin also hit a record on continuing supply concerns from Indonesia, while aluminium and nickel hit two-year highs. In London, copper added 2.3%, tin 0.2%, aluminium 1%, lead 2%, nickel 2% and zinc 2%.

Gold reversed early weakness in volatile trade as the US dollar hit a 12-week low. April gold was recently ahead $7.20 or 0.5% at $1,342 an ounce.

Oil gave back some of this week's gains as reports that Egyptian President Hosni Mubarak will not stand for re-election raised hopes for a peaceful end to civil unrest that threatened to disrupt oil supply. Crude futures wre recently down $1.52 or 1.65% at $90.68 a barrel.

European markets were cheered by a strong manufacturing report, steady unemployment in the euro-zone and positive earnings results. Britain's FTSE rallied 1.62%, Germany's DAX 1.51% and France's CAC 1.68%.

TRADING THEMES TODAY

CATCH-UP: Can't ask for a much better lead than that. New post-recovery highs in the US, surges in Europe, record highs for copper and tin, two-year highs for aluminium and nickel, gold ahead, Australian miners listed overseas ahead. Oil was the only obvious negative but anyone who thinks the developing crisis in the Middle East is over has rocks in their head. Our market should open strong this morning and may well have one of those sessions where it runs all day. Nonetheless, I rarely buy during these big opens because too many of the starting prices will be the high points of the day. The exceptions are breakout trades, which offer the best risk:reward in these situations.

CYCLONE YASI: It seems distasteful to discuss human tragedy in bald economic terms but the gathering storm off northern Queensland is too significant to ignore. Cyclone Yasi looks likely to cast a long shadow over trading in the days ahead. Comparisons to Hurricane Katrina raise the prospect of another hefty repair bill to be drawn from the national coffers and potentially another hit to GDP. Obvious victims besides the people of FNQ include insurers, miners in the cyclone's path facing stoppages or storm damage and to a lesser extent, airlines servicing FNQ. Potential winners are miners operating in other parts of the country if the damage is severe enough to affect commodity supply and pricing. That remains to be seen. Good luck to all in the cyclone's path.

ECONOMIC NEWS: Monthly new home sales are "tentatively" scheduled for today, according to Forex Factory. The Shanghai exchange is closed for the rest of the week for Lunar New Year holidays. Tonight's schedule in the US includes non-farm employment change, crude oil inventories and year-on-year job cuts.

Good luck to all. Fingers crossed for friends of this forum in FNQ.