daytrading june 5 pre-market

Morning traders.

Market wrap:

Shares are set to claw back some of yesterday's heavy losses after stimulus hopes and attractive valuations helped US stocks break even last night.

The June SPI 200 futures contract ended the night session 20 points or 0.5% ahead at 4017 as oil and copper turned positive in late trade.

US stocks dropped after the April factory orders report disappointed, but the indexes reversed direction as calls for central bank intervention increased and the lowest PE ratios in six months encouraged value investors. The S&P 500 closed little changed at +0.01%. The Dow, which was off 83 points shortly after lunch, closed 17 points or 0.14% in the red for its fourth straight loss. The Nasdaq outperformed both, rising 0.46%.

"The weak employment [report on Friday] seems to have helped [investors] recognise that the storm is washing up on US shores, making it all the more likely that the Fed will act this month," the chief economic strategist at Miller Tabak in the US told MarketWatch. "There have been few occasions recently when investors have bought bad news on such a view, and we're wondering if this is the start of some more optimism."

The April factory orders report continued the recent run of soft US economic news, recording a second straight monthly decline for the first time in three years. Orders decreased by 0.6% in April and the March reading was revised downwards from -1.5% to -2%.

Most European markets found higher ground as traders took hope from reports that euro-zone policy-makers are closer to agreement on strategies to tackle the sovereign debt crisis. The Wall Street Journal reported Germany may accept common euro-zone bonds if other nations cede more decision-making powers to the European Union. Bank stocks rallied after Reuters said the European commissioner for economic and monetary affairs advocated injecting money from the euro-zone bailout fund directly into the continent's struggling banks. G-7 finance ministers are due to hold a conference call on the debt crisis tonight.

France's CAC rallied 0.14%, Spain's IBEX 35 2.88% and Italy's FTSE MIB 1.19%. Germany's DAX lost 1.19% and Britain's FTSE was closed for Diamond Jubilee public holidays.

A decline in the US dollar took some of the pressure off commodity prices overnight. Oil fell as low as US$81.21 before rallying back above $84 a barrel. West Texas crude for July delivery was lately up 96 cents or 1.2% at US$84.19 a barrel.

"It looks like we're seeing some bargain-hunting coming into the market, which is natural," after a decline of roughly 17% in May, an analyst at Summit Energy in the US told MarketWatch. "People are trying to get ahead of a relief rally."

The London Metals Exchange was closed for a two-day Diamond Jubilee public holiday, but copper rebounded from an eight-month low in US trade. Copper for July delivery was recently up two cents or 0.6% at US$3.33 a pound.

Gold consolidated following Friday's big rally, with profit taking limited by hopes of central bank intervention in the US in the weeks ahead. Gold for August delivery was lately off $2 or 0.1% at US$1,620.10 an ounce.

TRADING THEMES TODAY

CAUTIOUS REBOUND: The world didn't end overnight. In fact, not much happened at all. Having overshot yesterday, the XJO and Asian markets should recover some ground this morning, provided there are no ugly surprises. The Australian market should find early strength in hopes for another rate cut this afternoon (see below), although caution may set in before the announcement at 2.30pm EST. There were no real stand-out sectors in the US overnight, but energy shares managed gains, alongside industrials and gold miners. Banks and airlines were the main drags.

RATE DECISION: Tame inflation data yesterday, falling company profits, gloomy economic news from China and the US and technical corrections on global stock markets have added to the case for another cut to the cash rate at this afternoon's Reserve Bank meeting. There is no consensus on whether the central bank will cut the cash rate by 25 basis points to 3.5% but a majority of economists now expect that outcome, with a few tipping another cut of 50 basis points. The news will be posted here at 2.30pm EST sharp.

ECONOMIC NEWS: Another busy day for domestic news includes the Services Index at 9.30am EST, current account at 11.30am and Reserve Bank cash rate decision and statement at 2.30pm. G-7 finance ministers are due to hold a conference call about the euro-zone tonight. The services PMI is tonight's main interest in the US.

Good luck to all.