daytrades sep 27 pre-market

Morning traders.

Market wrap: Shares should start the trading week sharply higher this morning after upbeat economic news fuelled rallies in Europe and the U.S.

The local December SPI futures contract closed 57 points ahead at 4677 on Saturday morning after Wall Street stretched its winning streak to a fourth week.

The Dow stacked on 198 points or 1.86% on Friday after reports on durable goods orders, housing and German business confidence beat expectations. The index is up nearly 8.5% for the month and on track for its best September performance since 1939. The S&P 500 added 2.12% on Friday and the Nasdaq 2.33%.

Upward revisions to July durable goods orders and sales of new homes eased fears that the U.S. economy might be sliding back towards recession, while a three-year high in German business confidence allayed growing concerns over the outlook for Europe. Bond yield spreads in Europe narrowed after the release of the report.

"The double-dip seems to be off the table," a money manager at Eagle Asset Management in the U.S. told Bloomberg. "The durable goods report was strong, it supports the idea that companies are spending money, which is important for overall economic growth. So it's another bullish indicator."

The euro rallied with European share markets, sending the U.S. dollar index lower and helping to bring in overseas buying for dollar-denominated commodities. The dollar index closed 0.8% weaker at its lowest level in seven months, while the Reuters/Jefferies CRB Index of raw materials marked its highest level since January.

Crude oil swung higher as JP Morgan raised its end-of-the-year target to $90 a barrel. Crude futures rallied $1.31 or 1.74% to $76.50 a barrel.

Metals continued to carve out fresh multi-year/month highs. Gold marked its third straight record high as investors sought a hedge against the sinking U.S. dollar. The spot price closed $4.50 stronger than Thursday's New York close at $1,297 an ounce. Silver closed at a new 30-year high, up 19 cents at $21.39 an ounce.

Copper, sometimes called the "metal with the degree in economics", hit a five-month high. In London, copper rallied 0.85%, aluminium 1%, lead 0.97% and nickel 1.1%. Tin eased 0.51% and zinc 0.13%.

The major European markets surged after the release of the U.S. durable goods report. Britain's FTSE rallied 0.93%, Germany's DAX 1.84% and France's CAC 1.94%.

TRADING THEMES THIS WEEK

NEXT LEG UP? A week of sideways consolidation on the local market appeared to end with a decisive move lower on Friday, but the overseas action now suggests that was a false break. Current sentiment overseas is willing to overlook tepid economic data, so long as a double-dip recession is avoided. In other words, this market still wants to rally. This week is relatively light for important economic reports in the U.S. (see below), which may give the market room to extend the rally, provided there are no nasty surprises. U.S. indexes are on track for their best September in 70 years.

END-OF-QUARTER WINDOW DRESSING: Money managers assessed on their monthly/quarterly performance have an interest in driving the market higher through to the last day of the month/quarter - Thursday. That plays into the market's natural weekly cycle of strong buying early in the week, fading in the second half as traders close positions ahead of the weekend.

ECONOMIC NEWS: Local news is thin on the ground until the middle of the week. This week's releases include: the monthly leading index (Wed); building approvals, private sector credit and the RBA Financial Stability Review (Thu); and the manufacturing index, inflation gauge and commodity prices (Fri). The U.S. has a relatively light schedule this week. The key releases are: consumer confidence (Tue); jobless claims, GDP, Chicago PMI (Thu); and personal income, consumer spending, consumer sentiment, ISM, construction spending and motor vehicle sales (Fri).

Good luck to all.