daytrades march 4 pre-market

Morning traders.

Market wrap: Stocks are set to gap higher after strong employment numbers and a dip in oil fuelled the best session on Wall Street in three months.

The March SPI futures contract ended the night session 49 points or 1.024% ahead at 4851, which points to the share market opening at its strongest level this week.

The major US share indexes started the session at a gallop after domestic economic reports showed falling jobless claims, an expanding services industry and improving retail sales. The Dow piled on 191 points or 1.59% and held most of its gains into the close, despite a late recovery in oil. The S&P 500 added 1.72% and the Nasdaq 1.84%.

"The US jobs data supports an improving economy," the chief investment officer at Stewart Capital in the US told Bloomberg. "There's also some sort of relief about oil prices being down. Still, how much of an impact the recent spike in crude will have remains to be seen."

Claims for unemployment benefits slipped 20,000 to 368,000 last week, raising expectations for tonight's monthly jobs report. Separate reports showed service industries expanding at the fastest rate in five years, productivity increasing, labour costs falling and retail sales beating expectations.

Also encouraging investors was a slide in the price of oil towards US$100 a barrel amid reports that Venezuela was looking to broker a peace deal in Libya. However, crude futures pared losses after President Obama warned that Libyan leader Moammar Gadhafi "must leave" and said the US was considering imposing a "no-fly" zone over the strife-torn country. Crude futures were recently down 33 cents or 0.3% at $101.91 a barrel but well off the session low near $100.

Precious metals fell back from this week's record highs after the European Central Bank's president flagged an impending hike in the euro-zone interest rate to tackle inflation. Gold for April delivery was recently down $22 or 1.5% at $1,416 an ounce. Silver dropped 64 cents or 1.9% to $34.19 an ounce. Platinum and palladium also lost ground.

Industrial metals rallied with European and US equities and on hopes that the oil price was stabilising. Copper fell 0.2% in London but was recently up 0.1% in US trade. In London, aluminium added 0.25%, lead 1.8%, nickel 0.4%, tin 0.1% and zinc 0.9%. The gains helped Australian miners rally in US trade - Rio Tinto put on 2.2%, BHP 1.7% and Alumina 1.7%.

The major European markets benefitted from the early fall in oil but moderated gains on news of possible interest rate rises in the euro-zone. Britain's FTSE added 1.52%, Germany's DAX 0.62% and France's CAC 0.66%.

TRADING THEMES TODAY

REBOUND: An upbeat quintet of domestic economic reports lit a rocket under US stocks last night that not even a mid-session recovery in oil could halt. Not much to dislike: Wall Street up, Europe up, industrial metals modestly up, Australian miners up in overseas trade, precious metals down, oil down but rebounding. If you held stocks overnight, you'll likely see the benefit this morning. However, with oil recovering most of its initial overnight losses, it's questionable whether our market will hold its early gains. We can expect plenty of these sorts of big overnight swings in the weeks ahead as the "people's revolution" in the Middle East plays out.

INTEREST RATES: Not so much a theme for today as for the next few months. News last night that the euro-zone is considering an interest rate rise as early as next month is an early warning that this era of record low rates, which has supported a two-year rally in equities, may be coming to an end. Food inflation is a growing concern around the world and the jump in oil only adds to the worries for central banks. Inflationary pressures are growing and we should expect to see rates starting to rise around the world in the months ahead. That will be an additional headwind for stocks, particularly when the US finally bites the bullet. The recent strength in precious metals, often used as a hedge against inflation, will likely be tested.

ECONOMIC NEWS: No significant economic releases scheduled here today. Employment has dominated US trade all week and tonight is the big one: monthly non-farm payrolls and the unemployment rate. Also due: factory orders and average hourly earnings.

Good luck to all.