daytrading nov 10 pre-market

Morning traders. Tin hats on.

Market wrap: Australian stocks are set to give back this week's gains after a surge in Italian borrowing costs triggered Wall Street's worst session since August.

The December SPI 200 futures contract ended the night session 115 points or 2.6% weaker at 4222 as European and US stocks slumped and the big Australian miners fell more than 5% in US trade.

The Dow fell more than 400 points before trimming the fall to 389 points or 3.2%. The S&P 500 lost 3.67% and the Nasdaq 3.88%.

The falls came as Italy's bond yield crashed through the 7% level, widely seen as unsustainable and around which Ireland, Greece and Portugal were forced to seek bailouts. The rise in yields came as a major clearing house hiked its margin requirements on Italian bonds, signalling increased risk, and as Italy's Prime Minister Silvio Berlusconi insisted on fresh elections to choose his successor, rather than an interim government.

"It's just like a scary movie as it never ends," the chief investment officer at Fifth Third Asset Management in the US told Bloomberg. "The overarching problem is that most of the economies in Europe can't sustain the size of their governments. We're going to have this headache for a long time to come."

European markets sagged as the banks most exposed to Italian bonds fell heavily. Adding to concerns were reports of a drive within German Chancellor Angela Merkel's own party to make it possible for countries to leave the euro, a subject once seen as taboo in EU circles. Italy's FTSE MIB index dropped 3.8%, Britain's FTSE 1.92%, Germany's DAX 2.21% and France's CAC 2.17%.

Shares in General Motors skidded 10.9% after the car-maker announced it no longer expected to break even on its European operation. Financials were also big losers in the US, with Morgan Stanley, Citigroup and Goldman Sachs all falling at least 8%.

A resurgent US dollar undermined commodity prices and sent energy and materials stocks in the US sharply lower. In US trade, BHP fell 6.2%, Rio Tinto 6.2% and Alumina 6.7% as stocks were hit much harder than the commodities they produce.

Copper slipped to a two-week low amid talk of slowing demand for Europe offset by strength in Asian demand. In London, copper fell 2.4%, aluminium 0.6%, lead 2.15%, nickel 1.3%, tin 1.5% and zinc 3%. US copper was recently off 3.9%.

Oil ended a five-session winning run but held most of its recent gains following yesterday's three-month high. Crude for December delivery was lately off 75 cents or 0.8% at US$96.05 a barrel.

Gold, traditionally a defence against currency losses, was hurt by the spike in the US dollar. Gold for December delivery was recently down $28.20 or 1.6% at US$1,771 an ounce. Silver, platinum and palladium all fell more than 2%.

TRADING THEMES TODAY

READY FOR THE WORST: Europe appears to be on the precipice, with Italy pushed into bailout territory and the European rescue fund patently inadequate to rescue an economy of that scale. The safety net is not big enough to catch an elephant. We're in unfamiliar territory here and the market is sounding the alarm. Until there's a circuit-breaker, further weakness is likely. That said, panic sell-offs create terrific scalping opportunities on days like this for the patient and bold. High risk, high return. Good luck out there.

EMPLOYMENT RATE: Optimists hoping for some good news to improve the market mood today have a long-shot with the monthly employment report, due at 11.30 am AEST. The consensus among economists is that the unemployment rate likely inched up 0.1% to 5.3% last month. That would make it three monthly increases in unemployment in a row as the uncertain global economic outlook starts to bite. Anything better than that will help stabilise our market today.

ECONOMIC NEWS: Domestic reports today include inflation expectations at 10.30 am AEST and the monthly employment report at 11.30 am (see above). China is due to release trade balance data today but the timing is uncertain, according to Forex Factory. A slow week in the US kicks into top gear tonight with reports on the trade balance, weekly unemployment claims, import prices, federal budget balance and natural gas storage.

Good luck to all.