daytrading dec 2 pre-market

Morning traders.

Market wrap:

Australian shares face a flat start after a night of consolidation on global equity and commodity markets.

The December SPI 200 futures contract ended the night session 2 points or less than 0.1% stronger at 4239 as most US stocks retreated a day after the S&P 500's best three-day run in two years. Oil and most metals pulled back.

The major US stock indexes finished mixed as traders weighed successful European bond auctions and an improvement in US manufacturing against an up-tick in US unemployment claims and yesterday's weak Chinese manufacturing report. The Dow dipped in and out of positive territory before closing 26 points or 0.21% weaker. The S&P 500 lost 0.19%, while strength in tech stocks helped the Nasdaq add 0.22%.

"Yesterday's action is the economic equivalent of using CPR on a heart-attack patient," a fixed-income analyst at Morgan Keegan in the US told MarketWatch about yesterday's co-ordinated central bank push to unfreeze lending markets. "The heart may be beating again, but there's still a long road of treatment needed before anyone can declare a clean bill of health."

Factory activity in the US recorded its biggest increase in five months during November, lifting the ISM index from 50.8 to 52.7. However, jobless claims crept back above 400,000 for the first time in four weeks, raising a few doubts ahead of tonight's monthly US jobs report.

France and Spain held successful bond auctions overnight, driving down yields and raising hopes that the worst of the sovereign debt crisis has passed. The yield on French 10-year treasuries saw its biggest decline since 1991 and spreads between Spanish and German yields and Italian and German yields tightened to one-month lows. However, a sharp contraction in euro-zone manufacturing helped sent European equity markets lower. Britain's FTSE fell 0.29%, Germany's DAX 0.87% and France's CAC 0.78%.

Most commodities lost ground despite a modest decline in the US dollar. Oil hovered either side of US$100 a barrel as traders remained cautious ahead of tonight's monthly US employment report. Crude for January delivery was lately off 39 cents or 0.4% at US$99.99 a barrel.

Most industrial metals pulled back as traders locked in profits following this week's sharp moves and yesterday's soft Chinese manufacturing report. In London, copper fell 1.2%, lead 0.2%, nickel 4.3%, tin 3.8% and zinc 1.3%. Aluminium added 1.7%. US copper was recently down 1%.

"After such a sharp move [yesterday] on what was basically an item out of the blue [central bank intervention], you're always going to get profit taking," an analyst at BNP Paribas told Reuters. "Also people are thinking this is positive but in itself it doesn't solve the euro-zone problem."

Gold was recently trading little changed. Gold for February delivery was down $2.70 or 0.15% at US$1,747.60 an ounce.

TRADING THEMES TODAY

CONSOLIDATING THE GAINS: Overseas equity and commodity markets essentially took a breather last night. The economic data was broadly positive and European bond yields fell, but the market has come a long way in a short time, so it's no surprise to see some modest profit-taking. What's important for the ASX outlook today is that there was no major reversal. The ASX can hardly be accused of getting carried away yesterday, so there is a reasonable possibility of slight gains to deliver a rare five out of five rises in a single week. Can't remember the last time that happened.

ECONOMIC NEWS: No scheduled domestic reports today. Tonight's main focus in the US is the monthly jobs report - non-farm employment change and the unemployment rate. Average hourly earnings are also scheduled.

Good luck to all.