daytrades september 20 pre-market

Morning traders.

Market wrap: Local stocks are likely to start the week lower after falls in Europe on Friday, little change on Wall Street and a mixed session for commodities.

The December SPI futures contract closed 22 points weaker at 4637 after European and U.S. share markets failed to match Asia's mostly strong Friday session.

Wall Street completed a third straight winning week, but Friday's rises were hamstrung by an unexpected dip in consumer sentiment. The Nasdaq was the only major share index to make real headway on Friday, rising 0.54% as technology stocks continued to lead in the U.S. The tech sector has advanced for the last eight sessions. The Dow gained 13 points for a 0.12% rise for the day and 1.4% for the week, while the S&P 500 trailed at +0.08% for the day, +1.4% for the week.

"Before we break out to new highs, you're going to have to see a compelling reason and in the absence of a compelling reason, you'll see choppy markets," an investment adviser at Medley & Brown in the U.S. told MarketWatch.

Sentiment was undermined by a fall in a measure of consumer sentiment to its lowest level in a year as stubbornly high unemployment in the U.S. continues to hinder the economic recovery. The University of Michigan index slipped to 66.6 this month from 68.9 in August. Economists had expected a reading around 70.

"The fall... in September comes despite the recent bounce in equity prices, the dip in jobless claims and receding fears that the economy is heading for another recession," Capital Economics said in a note quoted on Reuters. "That tells you just how downbeat households are at the moment."

Safe-haven assets including precious metals, government bonds and the U.S. dollar continued to rally alongside equities in a sign that at least some investors are hedging their bets on the prospects for this latest share rally. The dollar index, which measures the greenback against six major currencies, rose 0.2% on Friday to trim a weekly loss.

Gold pushed to a fresh record high but gave back its gains by the end of the session. The spot gold price finished 80 cents weaker than Thursday's New York close at $1,274.70 an ounce after earlier breaking the $1,280 mark. Silver hit a 30-year high but the spot price also closed marginally weaker at $20.77 an ounce.

Oil slipped to a two-week low, weighed down by the rising U.S. dollar, the weak consumer sentiment reading and news that a pipeline between Canada and the U.S. has re-opened. Crude futures fell 91 cents or 1.2% to $73.54 a barrel.

Industrial metals mostly inched higher as falling inventories and a benign monetary statement from China helped support the recent rally. In London, copper gained 0.5%, aluminium 0.8%, lead 0.3% and zinc 0.8%. Tin and nickel both closed near flat.

European markets were hampered by worries over Ireland after the cost of insuring Irish government debt hit a record high. Ireland's benchmark share index slumped 2.7%, dragging European banking shares with it. Britain's FTSE ended 0.57% lower, Germany's DAX lost 0.64% and France's CAC 0.38%.

TRADING THEMES THIS WEEK

BACK-TESTING THE RALLY?: As Redbacka highlights in his excellent weekly report, there are growing signs that our market is over-bought in the short term. That doesn't necessarily mean it's going down, but a little sideways action to consolidate recent gains would be welcome before any further move higher. The U.S. is at a critical level and faces headwinds this week in reports from the weak housing and manufacturing sectors. Shares in Shanghai had a poor run last week and should be watched closely. European debt worries also revived last week (see below).

EUROPEAN WOES: Government debt concerns in the euro-zone are back in the headlines after bond spreads in Ireland hit record levels late last week. Barclays warned investors on Friday that Ireland may need external help from the EU or IMF if the economy continues to deteriorate. Concerns are increasing over the outlook for Anglo Irish Bank, which was nationalised last year at significant cost to the Irish tax-payer. The reaction from Wall Street on Friday was muted, but this is a reminder that government debt levels in Europe and elsewhere could still derail any share rally in the months ahead.

ECONOMIC NEWS: A lighter week for local economic news lies ahead. RBA Governor Glenn Stevens is due to deliver a speech at 1.30 pm today titled "Monetary Policy and the Regions". The minutes from the last RBA policy meeting are due at 11.30 am tomorrow. The monthly leading index of economic indicators is due on Wednesday and the RBA annual report is tentatively scheduled for Friday, according to Forex Factory. Expectations are low for this week's key economic news in the U.S. The main events are: the home builder's index (tonight); housing starts (tomorrow); jobless claims, existing home sales and leading indicators (Thu); and new home sales and durable goods (Fri).


Good luck to all.