daytrading jan 30 pre-market

Morning traders.

Market wrap:

A 10th straight day of gains is within reach for the Australian share market after positive earnings news helped the Dow to a five-year high.

The March SPI 200 futures contract ended the night session two points or less than 0.1% weaker at 4852 as futures traders bet that yesterday's boom session on the ASX pre-empted the overnight action.

The S&P 500 took its cues from solid earnings from Pfizer and Valero Energy, rising 0.52% despite an unexpected drop in consumer confidence and weakness among tech stocks after downbeat outlooks from Seagate and BMC Software. The Dow rallied 72 points or 0.52% to its highest level since October 2007. The Nasdaq trailled at -0.01%.

As in Australia yesterday, there was a subtle change of rally tone, with defensives leading the overnight gains. The best-performing sectors on the S&P 500 were health care and telecoms, both traditional defensives. The S&P has rallied nearly 6% this month since Congress passed a budget compromise that delayed some of the hard decisions. The sector rotation came as the US Federal Reserve began a two-day meeting that will be closely watched for any sign of change in the loose monetary policy that has prevailed since the GFC.

"Cyclical [stocks] were moving very nicely, now you see balance with some of the defensive," a market strategist at Prudential Financial in the US told Reuters. "Many managers use that as an internal hedge in equity portfolios."

The latest consumer confidence reading suggested the general public are less optimistic than market participants. The Conference Board's confidence index slumped to its lowest level in 14 months, down to 58.6 in January from 66.7, well below the bleakest economist's prediction. The decline followed a January 1 increase in payroll taxes as part of the fiscal cliff revenue package.

Energy stocks were the pick of the cyclical sectors in the US and helped steer European markets higher as oil broke above US$97 a barrel. Germany's DAX rallied 0.2%, France's CAC 0.14% and Britain's FTSE 0.71%. West Texas crude for March delivery was lately up $1.03 or 1.1% at US$97.47 a barrel as tensions continued to run high in Egypt and Algeria.

Gold advanced for the first time in five sessions as the US dollar weakened following soft economic data. Gold for February delivery was $9.30 or 0.6% stronger at US$1,662.20 an ounce.

"Gold prices are higher on short covering," the publisher of investment newsletter The Morgan Report told MarketWatch. "The last few sessions saw downward pressure due to commercial interests betting on lower prices. Those prices have arrived and now those same entities are taking profits."

Bases metals found support in an upgraded growth outlook from a leading Chinese think tank. The Chinese Academy of Social Sciences lifted its forecast for 2013 to 8.4% from 8.2%, with most of the gains to come in the first half of this year. US copper for March delivery was recently up three cents or 0.75% at US$3.69 a pound. In London, copper added 0.7%, aluminium 0.5%, lead 1.1%, nickel 1.3%, tin 1% and zinc 0.7%.

TRADING THEMES TODAY

SIGNS OF WARINESS: It was business as usual on the face of it in the US overnight, but behind the scenes there were shifts that suggest a market retrace may be imminent. Institutional money moved strongly into defensive sectors, while the Russell 2000 index of small caps - a traditional measure of risk appetite - barely broke even. Similarly, defensive sectors accounted for much of yesterday's momentum here and our futures this morning look cautious, at best. I'm not suggesting a collapse is coming, but this market looks overdone in the short term after nine straight rises. At the least we should expect some consolidation following two and a half months of unbroken rises. If Wall Street wants a reason to take profits, it may be able to pick from several tonight if the Federal Reserve, GDP or private payroll data disappoint. All speculation at this point - anyone expecting a retrace on world markets has been wrong since mid-November, so the momentum remains upwards.

ECONOMIC NEWS: No significant domestic news scheduled today. A schedule of big ticket items tonight in the US includes advance quarterly GDP figures, a Federal Reserve policy statement and rates decision, private payroll figures, crude oil inventories and the advance GDP price index.

Good luck to all.