daytrading nov 21 pre-market

Morning traders.

Market wrap:

Shares face a mildly negative start after US stocks and precious metals were undermined by a surging US dollar as the Federal Reserve signalled the long-awaited stimulus taper is coming soon.

The December SPI 200 futures contract surrendered early gains, falling six points or 0.1% to 5306 as the release of the minutes from the last Fed meeting fuelled a late dive on Wall Street.

The S&P 500 traded modestly higher for much of the session before sinking to a loss of seven points or 0.38% after the minutes showed the central bank weighed up a range of ideas for exiting its long-running quantitative easing program. Read more here. The retreat was the index's third in a row. The Dow declined 66 points or 0.41% and the Nasdaq 0.27%.

Bond yields and the US dollar rallied, while equities and precious metals fell. Although the language in the minutes showed minimal change, the market was unsettled by evidence that several new ideas were floated for reining in stimulus spending.

"The battle lines are clearly drawn, with some at the Fed now itching to scale back QE unless the incoming data are awful," Ian Shepherdson, chief economist of Pantheon Macroeconomics in the US, told MarketWatch. "The cumulative rise in payrolls since QE3 started is enough for these members. We think [Janet] Yellen is not persuaded of this view but it will be hard for the doves if November payrolls are strong."

"The market was ready for a sell-off anyway," Mark Lehmann, president of JMP Securities in the US, said. "It was looking for an excuse to pullback and I think it just got one... The inevitable was inevitable, but the inevitable is coming sooner."

The market had earlier rallied after a report showed retail sales increased 0.4% in October from the month before, raising hopes for the holiday shopping season. Consumer inflation eased 0.1% and sales of existing homes decreased by 3.2%, broadly in line with expectations.

The Australian dollar dived more than a cent to 93.41 US cents as the US dollar index rallied 0.6%. Precious metals cratered as the surge in the greenback undermined demand for alternative stores of wealth. Gold for December delivery was lately down $29.50 or 2.3% at US$1,244 an ounce after earlier settling at US$1,258 an ounce, its lowest settlement since mid-July. December silver was off 46 cents or 2.3% at US$19.87 an ounce

BHP and Rio Tinto closed mixed and well off their US session highs. Rio Tinto held on to a gain of 0.94%, while BHP lost 0.79%. Spot iron ore for import to China inched up 10 cents to US$136.40 a dry tonne.

Copper gave up a modest gain in the US as the rising greenback made dollar-denominated commodities more expensive for holders of other currencies. US copper for December delivery was recently down one cent or 0.3% at US$3.15 a pound. Earlier in London, copper rose 0.1%. Aluminum, lead and tin improved but nickel and zinc fell.

The December West Texas Intermediate crude oil contract expired little changed before the release of the FOMC minutes, but the January contract was lately down 21 cents or 0.2% at US$93.68 a barrel.

The major European markets closed mixed but little changed ahead of the release of the Fed minutes after the European Central Bank was reported to be considering cutting its deposit rate from zero to -0.1%. Germany's DAX put on 0.09%, France's CAC lost 0.1% and Britain's FTSE dropped 0.25%.

TRADING THEMES TODAY

FED FUMBLES FOR THE EXIT, MARKET FEIGNS SURPRISE: As several analysts have pointed out in the last hour, the Fed minutes didn't really say anything the market didn't already know or suspect. The central bank wants to wind back the taper and has been saying so for months. However, the market had convinced itself it had until March before portfolios needed to be adjusted. Hence, the selling. Our futures market indicates many think we took our medicine yesterday and therefore should not have too much to worry about. The recent index trend looks ugly, but it will soon be time to look for a short-term bounce if the selling continues for a fourth day. Gold stocks are likely in for a rough ride - the Gold Bugs index dropped 3.4% in the US. Biotechs were a haven. The preliminary Chinese November manufacturing report is due at 12.45pm EST and could prove a game-changer if there is a significant deviation from the flat reading anticipated by economists.

ECONOMIC NEWS: There is no significant domestic news scheduled today, but the 12.45pm EST HSBC flash November manufacturing report for China is a potential market-mover. Europe releases manufacturing and services figures tonight. US highlights include weekly jobless claims, the producer price index/core PPI, flash manufacturing and Philly Fed manufacturing index.

Good luck to all.