daytrades nov 3 pre-market

Morning traders.

Market wrap: Futures traders expect a cautiously positive start to local trade after a strong overseas session that saw U.S. equities and oil at fresh six-month highs.

The December SPI futures contract this morning rallied 13 points or 0.3% to 4714 as America went to the polls and the market waits for tonight's stimulus plan announcement from the U.S. Federal Reserve.

A weaker U.S. dollar helped U.S. equities and resource prices. The Dow rallied 64 points or 0.58% to its highest close since April. The broader S&P 500 added 0.78% and the Nasdaq 1.15%. An index of commodity prices rose to its highest level in two years.

"It's hard to know what could upset the apple cart this week ? the Senate [election result] being close is one thing and the other is the magnitude of quantitative easing," Art Hogan, chief market strategist at Jefferies & Co, told MarketWatch.

The U.S. dollar retreated on expectations that the Federal Reserve will tonight announce a program to stimulate the economy, effectively reducing the dollar's appeal for overseas investors. The dollar index was recently down 0.7% at 76.73. The Australian dollar was hovering at 99.9 U.S. cents after touching parity overnight.

Oil reached its highest settlement in nearly six months ahead of tonight's U.S. inventory report. Crude futures were recently up 97 cents or 1.2% at $83.92 a barrel.

Precious metals tend to prosper in times of uncertainty and rallied as the weaker dollar encouraged alternative investments. Spot gold was recently $5.50 higher than Monday's New York close at $1,356.80 an ounce. December silver rallied 28 cents or 1.2% to $24.84 an ounce.

Industrial metals continued to benefit from Monday's unexpectedly strong Chinese and U.S. manufacturing data. In late trade in London, copper was ahead 1.3%, aluminium 2.5%, lead 1%, nickel 1.2%, tin 0.9% and zinc 0.1%.

The major European markets pushed higher. Britain's FTSE added 1.1%, Germany's DAX 0.75% and France's CAC 0.64%.

TRADING THEMES TODAY

THE WAITING GAME: That was a better session overseas than we might have expected amid the current uncertainty, but futures traders don't think we're going to make much of it. Yesterday's rate rise didn't help and there are plenty of nerves about tonight's Federal Reserve stimulus announcement (see below) and to a lesser extent, the outcome of last night's U.S. elections.

QE2: Tonight's the night when the U.S. finds out if the Federal Reserve can match the expectations baked into share prices over the last two months. Ben Bernanke is expected to announce plans to "pump" the sluggish U.S. economy by buying billions of dollars of government bonds. Market commentators say anything less than $500 - $750 billion is likely to disappoint the market. However, 93% of economists surveyed by Blue Chip Financial Forecasts said the market impact is probably priced in already.

ECONOMIC NEWS: Monthly building approvals are due at 11.30 am and are expected to stabilise after a sharp fall last month. A heady schedule of U.S. data tonight is headed by the Federal Reserve statement and rate announcement late in the session (see above). Also tonight: non-farm employment change, non-manufacturing purchasing managers' index, year-on-year job cuts, factory orders, crude oil inventories and car sales.

Good luck to all.