daytrading nov 24 pre-market

Morning traders.

Market wrap: A sixth night of falls on Wall Street has Australian shares pointed lower amid weak US economic data and fresh stresses in the European bond market.

The December SPI 200 futures contract ended the night session 25 points or 0.6% lower at 4039 as copper fell to a one-month low and mining stocks lost ground following yesterday's contraction in China's manufacturing.

The S&P 500 fell to a six-week low, closing 2.21% weaker and extending its six-day loss to more than 7.5%. The Dow lost 236 points or 2.06% with a nasty drop in the final minutes as traders closed positions ahead of tonight's Thanksgiving public holiday. The Nasdaq dropped 2.41%.

The overnight declines came as a German bond auction flopped, Chinese manufacturing contracted at its fastest pace in 32 months and US economic reports missed targets. European markets fell and sovereign bond yields rose following a German auction where more than a third of bonds failed to find buyers. An index of credit default swaps on European sovereign debt hit an all-time high following the auction and reports showed European manufacturing and services contracting for a third month. Britain's FTSE fell 1.29%, Germany's DAX 1.44% and France's CAC 1.68%.

"They are running out of time in Europe," the chief market strategist at Ameriprise Financial in the US told Bloomberg. "There's real pressure in the bond markets. The best remedy is growth, and the tone of the economic data, at least internationally, is toward more weakening."

US domestic data did little to alleviate the gloom. Jobless claims crept up but held below 400,000 for a third week, consumer spending increased less than expected and orders for durable goods declined. Consumer confidence remained depressed but improved to its highest level since June.

Resource stocks and commodity prices slumped in US trade after yesterday's preliminary monthly Chinese manufacturing report showed a sharp contraction in output. In US trade, Rio Tinto fell 4%, BHP 3.5% and Alumina 5.3% as analysts at JPMorgan Chase cut their outlook for commodities to "underweight".

Copper fell to a one-month low as a slowdown at China's factories heightened concerns about the broadening impact of Europe's debt crisis. In London, copper lost 0.7%, aluminium 1.8%, lead 0.2%, nickel 2%, tin 2% and zinc 1.2%. US copper was recently down 2.2%.

Oil was caught in a general decline in the commodities complex but pared losses after US data revealed a fall in domestic stockpiles. Crude for January delivery was lately off $1.87 or 1.9% at US$96.14 a barrel after earlier hitting $95.28.

Gold was hurt by a jump in the US dollar as the euro slumped to a six-week low. Gold for December delivery was recently off $8.70 or 0.5% at US$1,693.70 an ounce.

"The German bond auctions were the straw that broke the euro's back," the director of currency trading at GFT Forex told MarketWatch. "German bonds are normally perceived as the safest investment in Europe, so if investors aren't willing to buy German bonds, then Europe is really in trouble."

TRADING THEMES TODAY

PULL-BACK CONTINUES: Futures traders reckon the ASX yesterday pre-empted much of the overnight weakness but a hefty drop in US indexes in the final minutes of trade drove that SPI figure down another 10-15 points. This long pullback looks likely to stretch into a fifth day - and the seventh losing session in the last eight. It's starting to look possible that the XJO will test the lows of early October. If so, let it come quickly. While Monday and Tuesday were hopeful sessions with promising intraday rebounds, yesterday was unrelentingly glum. 64 has his work cut out today, but Lord knows we need some good news to break this negative feedback loop.

US CLOSES FOR THANKSGIVING: Adding to the glum short-term outlook for local traders is the fact Wall Street is closed tonight for the Thanksgiving public holiday and trades for just half a session tomorrow night. That means this weak overnight lead is all we will have to go on from the US until Monday. Trading volumes are likely to be weak and - barring unexpected news - the market appears likely to drift south until next week.

ECONOMIC NEWS: There are no significant reports scheduled during today's trading hours but Reserve Bank Governor Glenn Stevens is due to address the ABE Annual Forecasting Conference in Sydney tonight at 8.25 pm AEST. Wall Street is closed tonight for Thanksgiving. The key scheduled reports in Europe are British GDP and German business climate.

Good luck to all.