Daytrading August 14 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

A flat start to trade looks likely after a Wall Street rally fizzled out as key commodity prices declined and economic data pointed to a September rate rise.

The September SPI200 futures contract eased seven points or more than 0.1% to 5310 as US stocks surrendered gains in the final hour and a half of the session.

The S&P 500, which had been ahead as much as seven points, closed three points or 0.13% in the red as energy stocks reacted to a new six-year low in US crude. The Nasdaq gave up 11 points or 0.21%. The Dow clung on to a gain of six points or 0.03% after being up as much as 79 points.

"We're still trading in this sort of range," JJ Kinahan, chief strategist at TD Ameritrade in the US, told CNBC. "Yesterday [Wednesday night] was such an amazing rally that it's hard to believe we come out of it unscathed."

Volatility on world markets settled down overnight after the People's Bank of China held a press conference to soothe concerns over this week's rapid devaluation of the yuan. The Chinese currency has weakened almost 3% against the US dollar since Monday as the central banks made a series of sharp cuts to its reference rate. The scale of the devaluation caused ructions on global financial markets amid fears that the Chinese economy is significantly weaker than official figures suggest. Yesterday PBOC Assistant Governor Zhang Xiaohui dismissed as "nonsense" reports that the central bank was aiming to devalue the yuan by 10% to help struggling Chinese exporters. Read more here.

“The statement out of the Chinese authorities calmed fears regarding the prospect of these awful phrases like ‘currency wars’,” Daniel Murray, head of research at EFG Asset Management in the UK, told Bloomberg. “With concerns about China and Greece fading, the market can focus on fundamentals underlying the US economy.”

A round of broadly positive US economic data dragged the possibility of a September rate rise back under the spotlight. Consumer discretionary stocks were the best of the sectors after retail sales rose 0.6% last month and earlier readings for June and May were revised upwards from -0.3% to zero and from 1% to 1.9%, respectively. Core retail sales increased 0.4%, slightly below expectations.

“On balance, this morning’s report paints a brighter picture of consumer spending in the second quarter and suggest gains should continue through the third quarter,” Jesse Hurwitz, economist at Barclays, told MarketWatch.

First-time applications for unemployment benefits edged up to 274,000 last week from 269,000 the previous week, but the seasonally-adjusted four-week average remained at a 15-year low. Import prices declined 0.9% as the cost of oil retreated and the US dollar improved. The odds on a rate increase next month crept up to 48% from a reading of 40% earlier in the week, according to Bloomberg.

The energy ETF slumped 1.52% after US crude fell to its lowest level since March 2009. West Texas Intermediate crude oil for September delivery settled $1.07 or 2.5% weaker at US$42.23 a barrel.

BHP retreated after confirming that yesterday's massive explosion at the Chinese port of Tianjin will disrupt shipments of iron ore. Read more here. BHP slipped 1.13% and Rio Tinto 2.16% in US trade. Spot iron ore for import to China yesterday rose 40 cents to US$56.20 a dry ton.

US gold stocks reversed most of Wednesday's night 7.29% spike as a five-session rally in the precious metal ran out of steam. The NYSE Arca Gold Bugs index sagged 6.41%. Gold for December delivery settled $8 or 0.7% in the red at US$1,115.60 an ounce as the US dollar edged higher and demand for havens abated as equity markets settled down.

Most base metals settle lower on the London Metal Exchange, but volatility returned to 'normal' levels after wild moves on Wednesday night, including a 15% plunge in nickel. London copper eased 0.1%, aluminium 0.9%, nickel 1.4% and tin 0.8%. Lead and zinc edged up 0.1%. US copper for September delivery was recently up 0.1% at US$2.35 a pound.

European stocks rebounded from their biggest fall of the year as fears of a currency war retreated. The Stoxx Europe 600 advanced 0.97%, Germany's DAX 0.82% and France's CAC 1.25%. Britain's FTSE was held back by declines in oil companies, losing 0.04%.

The dollar was this morning buying 73.62 US cents.

TRADING THEMES TODAY

TGIF?: A pretty grim week for ASX bulls looks like ending with a whimper, much like last night's session on Wall Street. Rallies here yesterday and overnight in the US both ran out of steam by the closing bell, suggesting little enthusiasm for pushing either market higher. One obvious problem is company earnings, which have been mixed at best, on both sides of the Pacific. In the US the most they can say is that Q2 earnings are only down 2.1% on the previous quarter, rather than the 6.4% they expected before the season began. Here we have had some notable backlashes against former market darlings and the big banks sucking billions out of the market to cushion themselves against any rise in bad loans. CBA is likely to be a dead weight on the market on Monday - perhaps as early as today if it exits its trading halt early - as its share price adjusts to the new issue. Spec runners have become harder to find as this week progressed and sentiment deteriorated. Bring on the weekend.

ECONOMIC NEWS: No significant domestic news scheduled today. The US has some meaty economic data to digest tonight, including the producer price index/core PPI, preliminary consumer sentiment and inflation expectations, industrial production and capacity utilisation rate.

Good luck to all.