Daytrading June 1 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

Futures traders expect Australian shares to open modestly lower following end-of-month declines in the US as economic data disappointed and a Greek debt deal remained elusive.

The June SPI 200 futures contract slipped 17 points or 0.3% to 5761 as European shares fell sharply and the major US indices ended in the red for the week for the first time in four weeks.

The S&P 500 dropped 13 points or 0.63% on Friday after weak growth and manufacturing figures exacerbated concerns that the US economy is losing momentum. The index lost 0.9% last week but closed 1.1% ahead for the month. The Dow lost 114 points or 0.64% on Friday and the Nasdaq 28 points or 0.55%.

Updated growth figures showed the US economy contracted over the first three months of this year by slightly less than economists anticipated. Gross domestic product for Q1 was revised downwards to -0.7% from an initial reading of +0.2%. Economists surveyed by MarketWatch had anticipated a revised decline of 1%.

While a weak GDP revision was widely expected, May factory figures for the greater Chicago region were a surprise. The Chicago manufacturing purchasing managers' index slumped to 46.2 from 52.3 in April, dashing hopes that April marked a turnaround after a soft northern winter. Consumer sentiment deteriorated to 90.7 from 95.9 in April.

“GDP is kind of an old story - we already knew it contracted, but the Chicago PMI number came in unexpectedly low,” Kevin Caron, portfolio manager at Stifel Nicolaus in the US, told Bloomberg. “It could be that the market was hoping for a better number, and didn’t get the support it wanted. There’s conflicting data on the strength of the economy.”

Also weighing on sentiment was a plunge in European markets ahead of the Greek government's self-imposed deadline to complete a revised debt deal by last night. Reports this morning indicated the weekend was ending without a breakthrough: Talks Yield Little Progress. Greece is due to repay its creditors 1.5 billion euros this month. The Stoxx Europe 600 sagged 1.71% on Friday, Germany's DAX 2,26%, France's CAC 2.53% and Britain's FTSE 0.8%.

The Dow Jones Transportation Average, viewed by some investors as an indicator of future weakness in the broader market, fell 0.81% on Friday, its fourth loss in five sessions. Friday's fall brought the gauge within 1% of a technical correction. Peter Boockvar, chief market analyst at The Lindsey Group, warned CNBC that the gap between the transport index and the broader market was "a divergence we can't ignore".

While all ten S&P 500 industry groups declined, energy was the pick of the bunch with a loss of 0.11% after US crude surged back through US$60 a barrel. West Texas Intermediate for July delivery settled $2.62 or 4.5% ahead at US $60.30 a barrel after Friday data showed the number of rigs drilling for oil in the US declined for the 25th straight week last week.

Gold stocks were little changed, easing 0.17% as the metal continued to hover below the US$1,200 an ounce level. Gold for August delivery settled $1 or 0.1% ahead at US$1,189.80 an ounce. The precious metal has been range trading either side of US$1,200 for two months and ended last month with a gain of around 0.7%.

BHP and Rio Tinto closed mixed in US action after iron ore declined for a second session. BHP gained 0.13% and Rio Tinto lost 0.84%. Spot iron ore for import to China retreated 90 cents to US$61.40 a dry ton on Friday.

Aluminium ended its worst month in two and a half years with a loss of 2% on Friday in trade on the London Metal Exchange. The metal fell 9.6% during May amid concerns about Chinese output. London copper lost 1.3%, lead 2%, nickel 1.4% and zinc 1.8%. Tin edged up 0.2%. US copper for July delivery slid 1.2% to US$2.74 a pound.

The dollar was this morning buying 76.53 US cents.

TRADING THEMES TODAY

SOFT START TO BIG WEEK?: Trying to predict what our market will do on a day-to-day basis has been a fool's errand this year, but it's hard to see where the strength will come from this morning. Some of Friday's 1.1% surge on the ASX was likely end-of-month window dressing that will unwind this morning. Greece's weekend deadline appears to have passed without any significant change. Wall Street was weak on Friday and so were iron ore and base metals. That said, the ASX has been marching to its own beat lately and there is a Reserve Bank rate decision tomorrow and GDP figures on Wednesday. Throw in a slew of Chinese factory data this morning and anything is possible.

ECONOMIC NEWS: A busy day for potential market-moving data includes the AIG Manufacturing Index at 9.30am EST, inflation gauge at 10.30am and April building approvals and Q1 company operating profits at 11.30am. China releases rival manufacturing PMIs at 11am and 11.45am, plus a services gauge at 11am. Tonight's US highlights include: personal spending and income, core price index, final manufacturing PMI, ISM Manufacturing PMI, construction spending, manufacturing prices and a speech by a Fed official.

Good luck to all.