daytrading dec 27 pre-market

Morning die-hards. Best of the season to you.

Market wrap:

The share market faces an uncertain start as traders weigh a third night of losses on Wall Street overnight against two positive sessions in Asia since the ASX closed for Christmas.

The March SPI 200 futures contract last traded at 4613 at 2.30pm on Christmas Eve. Since then, the looming fiscal cliff deadline has continued to push US stocks lower ahead of the resumption of negotiations later today.

The S&P 500 closed well above its intraday low this morning but still declined 0.47% following a 0.2% slide on Christmas Eve for a three-session loss of nearly 1.7%. The Dow lost 24 points or 0.18% overnight and the Nasdaq 0.75%.

Asian action over the Christmas break has been much more positive, amid growing optimism over the economic outlook after changes of leadership in China and Japan. The Shanghai Composite rallied 0.25% yesterday following a 2.5% surge on Christmas Day. The Nikkei in Japan backed up a 1.4% rally on Tuesday with a 1.5% gain yesterday.

Weak retail sales in the lead-up to Christmas added to the downbeat tone on Wall Street as the clock ticked down to the January 1 implementation of a US$600 billion of tax increases and spending cuts. Retail sales increased 0.7% between October 28 and December 24, according to MasterCard Advisors SpendingPulse, compared to growth of 2% over the same period last year. Consumer discretionary stocks led the overnight retreat as most S&P industry groups lost ground.

"With the 'fiscal cliff' hanging over our heads, it was hard to convince people to shop, and now it's hard to convince investors that there's any reason to buy going into year-end," the director of trading at Conifer Securities in the US told Reuters.

President Obama cut his holiday short and is due back in Washington tonight to continue negotiations with Republican leaders four days before the "fiscal cliff" spending cuts and tax hikes are due to kick in. Congress will also resume tonight. Overnight, Wall Street's "anxiety index", the VIX edged up to its highest level since July, but remains well below levels seen earlier in the year.

Oil broke above US$90 a barrel overnight as a pay dispute in Iraq affected supplies to Turkey and traders speculated that President Obama's early return from holiday signalled a budget breakthrough is pending. West Texas crude for February delivery was lately up $2.47 or 2.8% at US$91.08 a barrel.

"I think the move by the president to end his holiday and resume talks means there's still an outside possibility that something gets resolved within the next few days," a research analyst at Global X Funds told MarketWatch. "The market is reacting positively on that move and the potential for some sort of patchwork type of agreement to come through before the end of the year."

In US trade overnight copper rebounded from last week's slide as the London Metal Exchange remained closed following Monday's soft Christmas Eve session. US copper for March delivery was recently up five cents or 1.4% at US$3.60 a pound. In London on Monday, copper slipped 0.4%, nickel 1%, tin 0.4% and aluminium less than 0.1%. Zinc rallied 0.5% and lead 0.3%.

Gold benefitted from a mild decline in the US dollar overnight to reverse a skinny retreat on Christmas Eve. Gold for February delivery was recently up $1.10 or less than 0.1% at US$1,660.60 an ounce after falling 60 cents on Monday.

TRADING THEMES TODAY

WAITING FOR CLARITY: The outlook for today is foggy, with Wall Street and Asian markets trading in markedly different directions over the Christmas break and our futures market offering no opinion until 9.50am EST. The likelihood is that our market will pay more heed to the US than Asia, softening on low volume, but another rally like Monday's would not be a huge surprise. BHP and RIO both advanced in the US overnight as resource stocks bucked the general trend, and that may be enough to point our market higher. Oilers should get a lift from crude's first push above US91 since mid-October. The only certainty is that trading volumes will be weak and the profitable action likely concentrated in a handful of stocks. RXL and DRK have been lucrative and may have more to give. However, profit-taking is increasingly likely after three/four days, respectively, without a setback.

ECONOMIC NEWS: No significant domestic news scheduled today. Tonight's highlights in the US include weekly jobless claims, consumer confidence and new home sales.

Good luck to all.