Daytrading May 19 pre-market

Morning traders. Thanks Trees and after-market regulars. Congrats to Nihilism on the well-deserved heart.

Market wrap:

Shares look set to pare yesterday's fall at today's open after US stocks closed at a record despite several headwinds.

The June SPI 200 futures contract rose 20 points or almost 0.4% to 5685 in cautious trade after an unexpectedly sharp retreat on the ASX yesterday as traders sold stocks to take advantage of rising bond yields.

Overnight, the Dow Jones Industrial Average joined the S&P 500 at record levels as the prospect of a delay in rate rises outweighed selling on sovereign bond markets, tepid economic news and fears that Greece faces bankruptcy within weeks. The blue-chip index, which has trailled recent advances on the broader S&P 500, rallied 26 points or 0.14% to claim its first all-time closing high since March 2. The S&P 500 improved six points or 0.3% for a third straight record. The Nasdaq gained 30 points or 0.6% but fell just short of a new closing high.

The market overcame early weakness after Federal Bank of Chicago President Charles Evans used a speech to argue that interest rates should stay near zero next year. Evans, a voting member of the Federal Open Market Committee, said "weak first-quarter" data gave him pause and it "likely will not be appropriate to begin raising the fed funds rate until sometime in early 2016". Read full speech here.

"I get a sense that investors want to rotate out of bonds into stocks and having a dovish Fed speaker helps," Jack Ablin, chief investment officer at BMO Private Bank in the US, told CNBC. "Having the Fed on the sidelines is probably the biggest thing — a Fed reluctant to tighten is emboldening investors."

The night's only significant economic news continued the recent run of data misses. A measure of confidence among home builders fell two points to 54 this month, above the 50-point level that indicates optimists outnumber pessimists, but well below the reading of 58 anticipated by economists.

European markets reversed initial falls caused by reports that a Greek government spokesman warned that the government needs a new loan deal with creditors by the end of the month or it will run out of money for public-sector wages. A leaked memo from inside the International Monetary Fund said Greece is highly unlikely to make its June 5 loan repayment.

Greek, Spanish and Italian bond yields spiked more than 7%. The German bund yield rose 3% and US yields also edged higher. However, European stocks closed ahead following reports that European Commission President Jean-Claude Juncker proposed a compromise deal to break the deadlock between Greece and its lenders. The Stoxx Europe 600 lifted 0.41%, Germany's DAX 1.29%, France's CAC 0.37% and Britain's FTSE 0.12%.

Market heavyweight Apple provided much of the momentum in the US, rising 1.1% after closely-followed investor Carl Icahn claimed the company was worth twice its current valuation. Other pockets of strength included the Russell 2000 index of small caps, up 1.09% and Nasdaq Biotechnology Index, up 1.23%.

BHP fell 6.21% in the US and 4.57% in the UK following the spin-off of unwanted assets into a new entity, South32, which debuted in Australia yesterday. Rio Tinto lost 1.06% in US trade. Spot iron ore for import to China yesterday dropped $2 to US$59 a dry ton.

Oil eased to its lowest level in a week as the recent run of weak US economic signals overshadowed turmoil in Iraq and Yemen. West Texas Intermediate crude oil for June delivery settled 26 cents or 0.4% weaker at US$59.43 a barrel.

Gold edged to a fifth straight gain as Greece's woes supported demand for havens. Gold for June delivery settled $2.30 or 0.2% ahead at US$1,227.60 an ounce.

A 0.97% rise in the US dollar index pressured base metal prices. In London, copper fell 0.5%, aluminium 1.8%, lead 0.6%, nickel 1.5% and zinc 0.4%. Tin rose less than 0.1%. US copper for July delivery was recently off 0.6% at US$2.91 a pound.

The dollar was this morning buying 79.94 US cents.

TRADING THEMES TODAY

CLUES FROM RBA: Last night was a very bullish session on Wall Street, not so much for the scale of the gains but from the size of the hurdles the market had to overcome. There were plenty of reasons for the bears to seize the ascendancy, yet US equities ground higher, regardless. That suggests further gains ahead. Back home, improving bond yields have encouraged rotation out of equities back to fixed-income. That accounts for much of the pressure yesterday on the big banks and other yield sectors. However, the mood may change if the Reserve Bank uses the 11.30am EST release of the minutes from its last policy meeting to soothe concerns that the latest rate cut was the last in the cycle. If the minutes show the central bank retains a bias towards easing, we may see a decent recovery today. May!

ECONOMIC NEWS: The Conference Board's leading index is due at 10am EST, but today's big-ticket item is the minutes from last month's Reserve Bank meeting at 11.30am EST. Tonight's US highlights are building permits and housing starts.

Good luck to all.