daytrades may 26 pre-market

Morning traders.

Market wrap: A rebound in commodities and the first positive close on Wall Street in four sessions has set up Australian shares to recoup yesterday's losses at today's open.

The June SPI futures contract ended the night session 40 points or 0.87% higher at 4629 as US resource stocks benefitted from rises in oil and metals.

The S&P 500 snapped a three-day losing run, rising 0.32% as the energy and raw materials topped sector gains, both adding more than 1.3%. The Dow put on 38 points or 0.31% and the Nasdaq added 0.55%. Rio Tinto rallied 1.5% in US trade, BHP 0.2% and Alumina 0.3%

"It's a 'risk-on' day," the global chief investment strategist for the IShares unit of BlackRock told Bloomberg. "On days when you get a little bit more conviction about the economic recovery, stocks and commodities move up. The 'risk-on' day is also a manifestation of companies most tied to the economy."

US investors shrugged off more disappointing economic news. Orders for durable goods fell 3.6% last month, the biggest drop since last October, and home prices slid another 2.5% over the first quarter.

Commodity prices rebounded as Deutsche Bank and Glencore joined the recent chorus of analysts tipping recoveries in key commodities following sharp pullbacks over the last two months.

"All the banks have been putting out buy calls on copper," a senior base metals analyst with CPM Group told Reuters. "I think we are seeing an up-tick in investment demand for longer term investors."

Copper rallied for a second night and zinc hit a three-week high. In London, copper added 2.1%, aluminium 1.4%, lead 1%, nickel 2%, tin 1.3% and zinc 2.1%. US copper was recently up 2.2%.

Oil overcame an unexpected increase in US inventories to break back through US $100 a barrel. Crude for July delivery was recently ahead $1.60 or 1.6% at $101.19 a barrel, helped by a dip in the US dollar that faded as the night wore on.

Precious metals continued to trend higher, with silver jumping more than 4% to a two-week high as risk appetite recovers. Gold for June delivery was recently up $2.40 or 0.2% at US $1,525.70 an ounce. July silver rallied 4.8% or $1.74 to US $37.87 an ounce.

European markets were boosted by Fitch Ratings' assessment that Germany's banks can manage their exposure to European sovereign debt. Britain's FTSE added 0.2%, Germany's DAX 0.28% and France's CAC 0.31%.

TRADING THEMES TODAY

RISK APPETITE PICKS UP: We were due some relief after three negative sessions and we got it. It's always bullish when the market ignores glum economic news, as Wall Street did last night, but it's too soon to know if this is a genuine mood change or just an up-tick in a developing medium-term downtrend. For today, at least, the mood is positive and cyclical stocks should see the benefit. The banks should recover some ground after Fitch Ratings' report on German banks soothed concerns over the toxicity of European debt.

COMMODITY RALLY: Suddenly all the analysts that a few weeks back were calling commodities over-priced see value in copper and the like. Deutsche and commodity giant Glencore last night joined Goldman Sachs, JP Morgan and Macquarie in tipping price rises in copper, traditionally a bellwether for the global economy. Silver built on Tuesday night's bullish move and oil broke out of its recent trading range. Zinc, described by one analyst as the "dog of the London Metals Exchange", hit a three-week high.

ECONOMIC NEWS: Reserve Bank Deputy Governor Ric Battellino is due to address a Sydney conference at 9.15 am today. First-quarter private-capital expenditure figures are due at 11.30 am. European Central Bank President Jean-Claude Trichet is due to address a forum in Germany tonight. Quarterly GDP figures are tonight's main scheduled news release in the US. Also due: weekly unemployment figures, the quarterly price index and natural gas storage.

Good luck to all.