Daytrading July 20 pre-market

Morning traders. Thanks Shants and after-market regulars.

Market wrap:

Shares look set for a flat open following their best week in five months as weakness in key resources offsets modest gains on Wall Street on Friday.  

The September SPI200 futures contract drifted one point or less than 0.1% to 5612 as BHP and Rio Tinto eased in US action, gold hit its lowest point in more than five years, and oil and most base metals retreated.

US stocks ended mixed, with a knockout post-earnings performance from Google the difference between the major indices. The Nasdaq surged 47 points or 0.91% to a second straight all-time high after Google rose more than US$65 billion - the largest one-day gain in market capitalisation ever by a US-listed company (read more here). The S&P 500 gained two points or 0.13%, with Google's twin share listings accounting for about six points of upside. The benchmark index ended just four points off a record following a weekly gain of 2.4%, its best weekly return in four months. The Dow, which does not count Google among its 30 component companies, slid 34 points or 0.19%.

"Earnings are coming in better than expected," Peter Cardillo, chief market economist at Rockwell Global Capital in the US, told CNBC. "I think it's a little bit of a pause. I don't see this as significant in any way."

Google's stunning rally overshadowed weakness in the broader market, with nine out of ten S&P 500 industry sectors declining. Energy, materials and utilities were the biggest drags. Technology was the only sector to improve, rising 1.8% - even there, more than half the sector's components retreated.

Traders kept eye on Capital Hill, where Federal Reserve Chair Janet Yellen reiterated that she expects to raise the central bank's key rate this year to reflect improvements in the economy. Data on Friday showed housing starts rebounded 10% last month, inflation increased for a fifth straight month and consumer confidence retreated from a five-month high.

BHP fell 0.68% and Rio Tinto 1.13% in US trade. Trade in iron ore was suspended on Friday for a Chinese holiday, with the spot price at US$50 a dry ton.

US gold miners had a horror session, with the NYSE Arca Gold Bugs index tumbling 5.17% to a new 12-year low after the precious metal slumped to its weakest point in more than five years. Gold for August delivery settled $12 or 1.1% lower at US$1,131.90 an ounce amid reports of a single substantial seller dumping US$1.4 billion of gold futures on Comex.

The US energy sector slid 1.21% as oil eased to its lowest settlement in three months. West Texas Intermediate crude oil for August delivery settled two cents in the red at US$50.89 a barrel after falling as low as US$50.14.

Copper led a retrace in most base metals ahead of the weekend release of Chinese data showing house prices stabilised last month (see below for more). In London, copper fell 1.4%, aluminium 0.5%, nickel 1.1% and zinc 0.3%. Lead edged up 0.2% and tin jumped 4.15%. US copper for September delivery dropped 1.1% to US$2.50 a pound.

Europe's benchmark index ended its best week since January with an eighth straight gain. The Stoxx Europe 600 inched 0.06% ahead for a weekly tally of 4.3%. Germany's DAX eased 0.37% on Friday, France's CAC gained 0.06% and Britain's FTSE gave up 0.31%.

The dollar was this morning buying 73.86 US cents.

TRADING THEMES TODAY

BREATHER?: World markets ran hard last week as the Greek debt crisis faded into the background, but there were signs on Friday that the rally was running out of puff. Friday's 'rise' in the US was entirely due to one company: without Google the S&P 500 would have lost four points. The ASX also hit 'pause' at the end of a great week. Both indices look mildly overbought and will likely need to do some work around these levels before any move higher. A partial retrace is likely. Market bulls may take heart from weekend news that a plunge in Chinese house prices is slowing. Read more here. Commodity markets are under pressure as money exits gold, oil and copper and moves back to the US dollar. A rout in US gold miners accelerated on Friday. Australian-listed goldies have been remarkably resilient, by comparison.

ECONOMIC NEWS: The week gets off to a quiet start - no significant news scheduled here today or tonight in the US.

Good luck to all.