daytrades jan 17 pre-market

Morning traders.

Market wrap: The share market is set to open near a nine-month high following a seventh week of gains in the U.S.

The March SPI futures contract closed 11 points or 0.23% stronger on Saturday morning, which suggests the ASX 200 will start the week at a level last seen in late April.

Financial stocks steered the major U.S. share indexes higher on Friday despite a weak session for resource stocks after China announced tighter bank lending restrictions. The S&P 500 advanced 0.74% to a new 30-month high, the Dow added 55 points or 0.47% and the Nasdaq 0.73%. The S&P 500's 1.7% gain for the week made this its longest winning run since 2007.

The financial sector spearheaded the rally after JP Morgan, the first of the big banks to report Q4 earnings, topped analysts' expectations, raising hopes for reports this week from Bank of America and Wells Fargo.

The result overshadowed disappointing Christmas retail sales and consumer confidence readings. Retail sales improved by 0.6% in December, less than the 0.8% rise expected, and consumer confidence also trailed estimates.

BHP and Rio Tinto closed modestly lower in U.S. trade after China raising its bank lending ratios by half a percent. The Shanghai Composite closed 1.3% weaker following Friday's announcement on fears of an economic slowdown. BHP eased 0.14% and Rio Tinto was off 0.08% in the US. Alumina rallied 0.51%.

"Central bankers across Asia are increasingly worried that price pressures are developing into a potentially big problem," an economist at Capital Economics in the UK told Bloomberg. "Almost all the countries in the region will be raising interest rates to tackle inflation."

Gold dropped through a critical support level as the Chinese move raised demand concerns and successful bond auctions in Europe reduced the metal's 'safe haven' appeal. Gold for February delivery tumbled $26.50 or 1.9% to $1,360.50 an ounce, its biggest fall since January 4. March silver dropped 94 cents or 3.2% to $28.32 an ounce and platinum and palladium also eased.

Oil inched higher, rising around 4% for the week as gains in U.S. equities on Friday offset weak economic reports and China's tightening move. Crude futures rallied 14 cents or 0.15% on Friday to $91.67 a barrel.

Copper followed U.S. equities higher but other industrial metals were mixed. In London, copper rallied 0.6%, lead 1.7%, nickel 1.4% and tin 0.4%. Zinc eased 0.3% and aluminium 0.2%.

The major European markets pared early losses to close mixed as mining stocks were hurt by China's lending change. Britain's FTSE fell 0.36%, Germany's DAX was flat and France's CAC added 0.21%.

TRADING THEMES THIS WEEK

ASX BREAKOUT: It has been a long wait but it looks like our market will finally push past the early-November high this week and resume its march towards the April 12-month high. The U.S. is closed for a public holiday tonight, which may give our market breathing space to kick on today and tomorrow. There are two obvious headwinds working against that scenario: U.S. stocks look over-extended following their longest winning run since 2007 - a pullback is overdue, perhaps as early as this week; and China's latest move to rein in its economy may weigh on resource stocks.

CHINA UPDATE: China moved again on Friday to curb speculative excesses in its economy by raising its bank lending restrictions for a sixth time. We'll find out on Thursday what prompted the move through the monthly economic update. December figures are due at 1pm on Thursday for GDP, CPI, PPI, industrial production and retail sales.

U.S. EARNINGS SEASON: Fourth-quarter reports start to flood in this week, likely increasing volatility as the markets respond to short-term surprises. There are 49 companies from the S&P 500 due to report this holiday-shortened week. Highlights include Apple, IBM, Citigroup (Tue); Ebay, Goldman Sachs, Wells Fargo (Wed); Google, AMD, Morgan Stanley (Thu); and Bank of America, GE (Fri).

ECONOMIC NEWS: Local market-moving scheduled releases are at a premium this week, with China's monthly update the main event (see above). Back home, monthly car sales are due at 11.30 am today; consumer sentiment on Wednesday; inflation expectations on Thursday; and quarterly import prices on Friday. Markets in the U.S. are closed tonight for the Martin Luther King Jr public holiday. Key releases this week include: the Empire state index, Home builders' index (Tue); housing starts (Wed); and jobless claims, existing home sales, leading indicators and Philly Fed (Thu).

Good luck to all.