daytrading march 12 pre-market

Morning traders. Thanks Trees.

Market wrap:

Volatility on commodity markets and mixed US economic data combined to drive Wall Street lower overnight, placing the ASX in line for a weak open.

The March SPI 200 futures contract fell 22 points or 0.4% to 5393 as copper hit a three-year low and oil dropped back under US$100 a barrel.

The S&P 500 briefly threatened last week's record highs in early trade before falling away to a loss of nine points or 0.49% as the on-going rout in copper unsettled other markets. The Dow gave up 68 points or 0.41% and the Nasdaq 27 points or 0.63%.

"China is a big importer of copper and intraday that triggered a little bit of fear in equities," Joe Bell, senior equity analyst at Schaeffer's Investment Research in the US, told Bloomberg. "Copper is somewhat related to the health of the global economy, so that could have pushed people to take some money off the table."

Chinese concerns increased after bonds issued by Baoding Tianwei Baobian Electric were suspended. The news exacerbated fears that the country faces a wave of defaults after Shanghai Chaori Solar failed to meet payments last week, undermining hopes that Chinese corporate debt came with an implicit state guarantee.

Copper, which is widely used to finance deals in China, tumbled 2.6% overnight in London trade to close at US$6,475 a tonne, along the way touching its lowest level since July 2010. US copper for March delivery was recently off 2.7% or around eight cents at US$2.95 a pound. In London, aluminium dropped 1.4%, lead 1.65%, tin 0.13% and zinc 1.9%. Nickel gained 0.65%.

"More defaults will come, which is concerning to people who have been China bulls. And there's really no (copper) demand at the moment in China. The imports were so high at the start of the year so fabricators don't need to restock," analyst Andrey Kryuchenkov at VTB Capital told Reuters.

Also affecting risk appetite in the US was a mixed round of second-tier economic data. Job openings improved in January in line with expectations, indicating strength in the labour market, but wholesales inventories increased, implying insufficient demand. Sentiment among small business owners declined more than economists predicted.

Small caps and cyclical stocks took the brunt of the selling. The Russell 2000 index fell 1.11% and the Morgan Stanley Cyclical Index 0.88%.

BHP lost 1.65% and Rio Tinto 0.79% as US-listed commodity shares fell at least 0.7%. Iron ore stabilised overnight, with the spot price for import to China rising 20 cents to US$104.90 a dry tonne.

Oil fell below US$100 a barrel for the first time in three weeks amid bearish expectations for tonight's US weekly inventories report. West Texas Intermediate crude for April delivery was lately down $1.40 or 1.4% at US$99.71 after settling at US$100.03 a barrel.

Gold continued to benefit as developments in China and the Ukraine encouraged haven buying. Gold for April delivery was recently up $6.10 or 0.5% at US$1,347.50 an ounce after settling at US$1,346.70.

European stocks closed little changed as news of tough European Central Bank stress tests pressured the big banks. The Stoxx Europe 600 index edged up 0.03% as Germany's DAX bounced 0.46%, France's CAC fell 0.48% and Britain's FTSE eased 0.05%.

TRADING THEMES TODAY

DOCTOR COPPER SOUNDS ALARM: Without any big-ticket economic news to provide a distraction, US traders belatedly responded to Chinese concerns. The ructions on copper markets became too big to ignore, given that 'Dr Copper' is supposed to be the metal with the degree in economics. The metal is caught in a perfect storm at present, but speculation started overnight that it may be near a bottom. Read more here. There was better news from iron ore and the Chinese stock market yesterday, which at least arrested their declines. Risk appetite was weak in the US, which implies a two-speed market at best here today, with defensives and perhaps financials providing potential support against likely declines in materials and industrials.

ECONOMIC NEWS: Consumer sentiment data are due at 10.30am EST, followed by home loans at 11.30. Europe releases industrial production figures tonight. Crude oil inventories and a speech by Treasury Secretary Jack Lew are the highlights of a light night ahead in the US.

Good luck to all.