daytrading nov 2 pre-market

Morning traders.

Market wrap:

Signs of improvement in the global economy have Australian shares poised to recoup most of yesterday's losses following solid rises on US and European markets.

The December SPI 200 futures contract ended the night session 43 points or 1% higher at 4479 as Wall Street applauded upbeat economic data from China and the US.

The S&P 500 rallied 1.12% overnight as the major stock indexes in the US, Germany, Britain and France all put on at least 1%. The Dow advanced 137 points or 1.04% and the Nasdaq 1.44%.

Cyclical sectors, including industrials and resource and tech stocks, led the charge as American data beat expectations and two manufacturing reports suggested the Chinese economy may be stabilising. The Morgan Stanley Cyclical Index of US companies most closely tied to the economic cycle jumped 2.4%.

"One of the major concerns of the market is a deceleration of growth," the chief investment officer at Westwood Holdings in the US told Bloomberg. "The data is actually saying that deceleration has basically stopped and the growth rate has stabilised. When we look at fundamentals, the economy still supports earnings growth going into next year."

The US economy created 158,000 private-sector jobs last month, according to payrolls processor ADP, raising the prospect that economists' predictions for tonight's monthly government jobs report are too low. The consensus expectation for tonight's report is 120,000 new government and private-sector jobs, according to MarketWatch. Initial jobless claims declined by 9,000 to a seasonally adjusted 363,000 last week, also beating expectations. Other reports showed consumer confidence at a four-and-a-half year high and a pick-up in manufacturing as orders started to improve.

"We have improving US economic data across the board, juxtaposed against worries about the fiscal cliff," Art Hogan, market strategist at Lazard Capital in the US told MarketWatch.

European markets recouped Wednesday's losses after China led a rally across most Asian markets yesterday. Germany's DAX put on 1.04%, France's CAC 1.33% and Britain's FTSE 1.37%.

Industrial metals continued to recover from this week's multi-month lows as some traders interpreted yesterday's manufacturing reports as signs that China's economy may have found a bottom. US copper for December delivery was recently up four cents or 1% at US$3.55 a pound. In London, copper added 0.9%, aluminium 1.8%, lead 2.8%, nickel 1%, tin 2.3% and zinc 1%.

Oil caught a boost from an unexpected decline in US inventories. West Texas crude for December delivery was recently up 69 cents or 0.8% at US$86.93 a barrel after the US Energy Information Administration reported a weekly drop of two million barrels.

Gold, which tends to prosper in times of economic worry, retreated a fraction as the good news flowed. Gold for December delivery was lately off $4.80 or 0.3% at US$1,714.30 an ounce.

TRADING THEMES TODAY

REBOUND: Hands up if you're kicking yourself for not loading up during yesterday's heavy tumble on the ASX. The strength of yesterday's pullback made little sense in the light of the Chinese data, and even less now. The result is we should see big gaps higher in the blue chips and mid-caps and perhaps a little confidence return to the speccy end of the market, which seems to have softened over the last week. Cyclicals were standouts in the US, also biotechs. Precious metals miners, utilities and insurers were among the few decliners.

ECONOMIC NEWS: Quarterly producer price index figures are due at 11.30am EST and may have an impact on the prospects for another rate cut on Tuesday. Europe has manufacturing and construction data out tonight. The monthly non-farm employment change report and unemployment rate are the highlights tonight in the US. Also due: factory orders and average hourly earnings.

Good luck to all.