daytrading nov 5 pre-market

Morning traders.

Market wrap:

Shares have positive leads for Melbourne Cup day following slim gains on Wall Street and solid overseas advances for market heavyweights BHP and Rio Tinto.

The December SPI 200 futures contract rebounded 18 points or more than 0.3% to 5398 as US stocks pushed higher on below-average volume at the start of a big week of economic news.

The S&P 500 overcame a morning wobble to secure a final rise of six points or 0.36% after factory orders accelerated in September. The Dow struggled to a gain of 23 points or 0.15% and the Nasdaq added 0.38%. A market fixated on when the Federal Reserve will reduce its stimulus spending took its cues from economic data and speeches by various Fed officials.

"The market's Kryptonite is early taper talk at the moment, and this first full week of November has the potential for it to be hurled at it from all directions with no shortage of US economic data on the agenda, including the all-important October payrolls report and the advance estimate of GDP," Jim Reid, strategist at Deutsche Bank, told MarketWatch.

Overnight, St Louis Federal Reserve Bank President James Bullard said low inflation meant the central bank could take its time over reducing its US$85-billion-a-month bond-buying program. Read more here. Yesterday Dallas Fed President Richard Fisher told an Australian audience the US economy was being held back by dysfunctional government and hinted the long-awaited Fed "taper" was coming soon.

The September factory orders report came in broadly in line with expectations. Orders increased by 1.7%, erasing a 0.1% setback the previous month.

Energy stocks, coal miners and steel makers led a rebound in commodity stocks. Rio Tinto put on 3.07% in US trade and BHP added 1.07%, supported by a late surge last week in iron ore. Spot iron ore for import to China yesterday rallied 50 cents to US$135.80 a dry metric tonne.

The gains in resource stocks came despite a tepid night for oil and metals. A decline in the US dollar helped gold score early gains but most evaporated by the closing bell on Wall Street. Gold for December delivery was lately up 60 cents or less than 0.1% at US$1,313.80 an ounce after earlier settling at $1,314.70 an ounce, its first gain in three sessions.

Base metals remained under pressure from demand worries and the recent recovery in the greenback. US copper for December delivery was recently down four cents or 1.3% at US$3.26 a pound. In London, copper fell 1.3%, aluminium 1.1%, lead 1.3%, nickel 1.4%, tin 0.3% and zinc 0.8%.

Oil jagged between US$94 and US$95 without ever gaining momentum. West Texas Intermediate crude for December delivery was lately off 14 cents or 0.15% at US$94.46 a barrel.

European markets were encouraged by increased factory activity as a recovery in the euro-zone slowly gathers pace. The Markit manufacturing purchasing managers' index improved to 51.3 last month from 51.1 in September. Germany's DAX put on 0.32%, France's CAC 0.37% and Britain's FTSE 0.43%.

"More encouraging indications about the recovery can be gained by looking at the increasingly broad-based nature of the upturn, and especially the fact that increasingly robust gains in production are now being seen in countries such as Spain, Italy and Ireland, to suggest that structural reforms to boost competitiveness are starting to pay off," Chris Williamson, chief economist at Markit, told MarketWatch.

TRADING THEMES TODAY

LOW-VOLUME, DISTRACTED MARKET: Hello? Anyone here? Thought not. Cup Day markets tend to be pretty sluggish and half-hearted, with most of the hot money directed at crooked, undeserving bookies, instead of honest, hard-working day-traders. Ahem. Wall Street has offered a solid, if uninspiring, platform, so it will be interesting to see if the market can build on it after three days of declines. Later this afternoon we can look forward to the rates meeting that will not stop a nation. The Reserve Bank releases a policy statement and rates decision at 2.30pm EST, but it would be a bigger upset than Phar Lap coming back from the grave to win today if there is any change from the current cash rate of 2.5%.

ECONOMIC NEWS: The AIG Services Index is due at 9.30am EST, followed by an RBA rate decision and statement at 2.30pm. Tonight's US highlights include the monthly services PMI and economic optimism gauge.

Good luck to all.