daytrades nov 12 pre-market

Morning traders.

Market wrap: A moderately negative start to local trade is likely after solid falls on Wall Street and a mixed night for commodities.

The December SPI futures contract ended the night session 8 points or 0.2% lower at 4734 as a recovery on Wall Street failed to entirely reverse sharp early falls.

The Dow tumbled more than 120 points in the first minutes of trade and finished 74 points or 0.65% lower in choppy action. The broader S&P 500 fell 0.42% and the Nasdaq was worst off at -0.9% as Cisco's weak outlook weighed on technology stocks.

"Cisco's sector is a bellwether in terms of companies' capital expenditures," the chief investment officer at PNC Wealth Management in the U.S. told Bloomberg. "It's hard to look at one company and say we're off track, but people will always try to look a little further for an idea of economic growth going forward. The backdrop to all this is the European situation where these countries still face the challenge of bringing their fiscal houses in order."

Shares in Cisco suffered their heaviest loss in 16 years after the tech giant disappointed the market with its revenue projections for next year. The company attributed its problems partly to lower government spending overseas.

Wall Street continued to suffer nerves over the themes that have dominated this week: currency disputes at the G20 meeting in South Korea, a rising U.S. dollar and the European sovereign debt crisis.

Yields on Irish, Greek and Spanish bonds blew out to new record levels as France joined Germany in suggesting bond-holders may have to take a haircut. The euro continued to weaken, which helped the U.S. dollar index build on its strongest week in three months. The index, up 2.1% for the week, was recently trading 0.7% higher on the day at 78.17.

Copper hit a fresh record high following yesterday's strong economic data from China but pared its gains as the rising dollar undermined demand from overseas buyers. Sometimes known as the "metal with the degree in economics", copper is up 40% for the year. In late trade in London, copper was up 1%, aluminium 0.7% and zinc 0.4%. Lead was down 0.1%, nickel 0.8% and tin 0.2%.

Precious metals moved higher, supported by "safe haven" buying. Spot gold was recently $5.70 higher than Wednesday's New York close at $1409.10 an ounce. Silver continued to recover from Wednesday's 7% plunge. December silver climbed 54 cents or 2% to $27.41 an ounce.

Oil consolidated yesterday's rise to a two-year high, ending the session little changed. Crude futures were recently 9 cents or 0.1% weaker at $87.72 a barrel.

The major European markets were mixed but little changed. Britain's FTSE eased 0.03%, Germany's DAX advanced 0.05% and France's CAC fell 0.54%.

TRADING THEMES TODAY

NERVES: Last week was one-way traffic heading north, this week has been pretty much the reverse. Markets were due for a pullback and there are always reasons to sell when investors look for them. However, futures traders seem relatively sanguine about today's prospects for our market, presumably because our big miners were solid in overseas trade overnight. Plus there was yesterday's "China rally" (as opposed to the previous day's "China pullback") and takeover action in the Pilbara (congratulations to holders of BRM and FRS). I'm not so sure. With so much uncertainty in the market, some traders will be tempted to close positions ahead of the weekend.

G20: Likely to be more of an issue next week than today, but you never know when news will break. Leaders of the major industrialised nations have gathered in South Korea for a meeting that will focus largely on currency issues. Given the significance of a weakening U.S. dollar in market trends over the last few months, there is potential for market-moving news to emerge from this meeting. Most market commentators seem sceptical of real action, but the U.S. dollar has been rallying all week and that may eventually take a toll on resource prices, which have in recent times had a broadly inverse relationship with the greenback.

ECONOMIC NEWS: The local calendar is empty today. Preliminary consumer sentiment and inflation expectations top the agenda tonight in the U.S., along with speeches by two members of the Federal Open Market Committee.

Good luck to all.