daytrades june 10 pre-market

Morning traders.

Market wrap: Local stocks look set to open modestly lower as strength in resource prices balances falls on Wall Street after a weak growth outlook from the Federal Reserve.

The June SPI futures contract finished the session 11 points lower at 4391 after a sliding U.S. dollar helped oil and base metals rebound from recent losses.

A triple-digit morning rally on the Dow Jones Industrial Average faded to a 41-point loss after the Fed's 'Beige Book' business survey said growth was subdued in many parts of the country and the euro dipped under the psychologically significant US$1.20 mark. The Dow closed 0.41% weaker, the S&P 500 lost 0.59% and the Nasdaq 0.54%.

The Beige Book, a portrait of the U.S. economy produced by economists at the 12 regional Fed banks, noted: "Economic activity continued to improve since the last report across all 12 Federal Reserve districts, although many districts described the pace of growth as 'modest'."

"Overall it was a positive report," a senior equity trader in the U.S. told Bloomberg. "Given all the factors in the market's recent sell-off this report could have been much worse."

Testifying earlier in the day, Fed chairman Ben Bernanke told a House budget panel that Europe's debt crisis would probably have a very limited impact on U.S. economic growth, so long as financial markets continued to stabilise.

Unsettling the market was a 16% fall in BP - its biggest tumble in 20 years - as its failure to steam an oil spill raised fears over dividend payments and potential bankruptcy. Energy was the worst performing sector in the S&P 500 despite a rally in crude. Bank shares were also sharply lower.

A decline in U.S. stockpiles combined with a weak dollar to send oil futures higher. Crude futures were recently up $1.95 or 2.7% at $73.94 a barrel.

Industrial metals rallied on reports that today's Chinese trade data will reassure jittery markets. Investors were also cheered by Bernanke's relatively positive outlook for the U.S. economy. In late trade in London, copper was up 2.5%, aluminium 0.3%, lead 3.1%, nickel 3.1%, tin 2.2% and zinc 0.9%.

Gold fell sharply after a rally in the euro but recovered to trade little changed. The spot price was recently $2.30 lower than Tuesday's New York close at $1,232.50 an ounce.

The major European markets played catch-up on Tuesday's Wall Street rally and closed before the up-trend reversed on U.S. bourses. Britain's FTSE added 1.15%, Germany's DAX 1.98% and France's CAC 1.96%.

TRADING THEMES TODAY

CHINA: Global markets were boosted overnight by a Reuters report that China's exports surged around 50% last month from a year earlier. Reuters traced the claim to an investor conference but did not supply official confirmation. At 2 pm today we will learn if the report is true. The report helped industrial metals rally for a second day. "We've rebounded because of the rumours of quite good trade data out of China," an analyst at Standard Chartered told Reuters. "[Today] we've got the actual official announcement of that data so it's going to be the key thing to watch." Now that a 50% rise is expected, any lower figure may cause a sell-off so it's worth watching how our market reacts at 2pm.

WEATHERING THE STORM: This is a tough market to trade. The last few weeks have been the trickiest since the height of the GFC and decent returns have been hard to come by. If you're doing it tough, reduce your trading until your strike rate improves or step back from the market for a few days and have a rethink about your approach. Successful trading is about adapting to changing circumstances and bear markets are harder to trade than bulls.

ECONOMIC NEWS: A busy day both locally and overseas, so we could be in for a choppy session. Monthly inflation expectations are due at 11 am but the main local event is the unemployment rate and employment change data at 11.30 am. Also due at 11.30: the RBA's Q2 Bulletin. The Chinese trade balance is due at 2 pm (see above). Tonight in the U.S.: trade balance, unemployment claims, natural gas storage and the Federal Budget balance.

Good luck to all.