Daytrading November 16 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

The ASX 200 looks set to retest the 5000 level as investor nerves over terrorist atrocities in Paris compound losses of more than 1% on Wall Street on Friday after retail data disappointed.

The December SPI200 futures contract fell 37 points or 0.7% to 4997 on Saturday morning before news broke that Islamic State had carried out a string of attacks on the French capital, killing at lest 132 people. Jitters following the attacks are expected to trigger a 'flight to safety' on global markets this week.

"Investors were already nervous leading into the weekend - we saw the Dow off 400 points in the last two trading sessions on concerns about global events," Peak Asset Management executive director Niv Dagan told Fairfax. "Retail sales [in the US] were poor; also investors are very nervous about when US interest rates will rise - but the Paris attacks exacerbate the nervousness of investors. What we'd expect is probably the market to gap down on Monday, similar to what we saw in August when there were rising concerns about China."

The S&P 500 ended its worst week since August with a loss of 23 points or 1.12% on Friday as investors fretted that the Federal Reserve is preparing to increase rates at a time of weak consumer demand and soft inflation. The decline  was the benchmark's index's seventh in eight sessions since Fed Chair Janet Yellen signalled that the central bank is likely to raise next month. The Dow shed 203 points or 1.16% and the Nasdaq 77 points or 1.54%.

The consumer discretionary sector led the falls after the October retail report fell significantly short of expectations and department stores JC Penney and Nordstrom reported disappointing earnings. Retail sales increased just 0.1% last month, the third month in a row of minimal improvement following zero growth in September and August. Economists had predicted seasonally-adjusted growth of 0.4% last month. Read more here.

Shares in Nordstrom were smashed 14.98% after the high-end department store slashed its profit outlook. JC Penney was knocked down 15.36% after reporting a loss.

Weak October inflation data added to concerns. Producer prices fell for a second month, down 0.4% versus expected growth of 0.2%.

“We’re seeing deflationary pressures at the producer level,” Laura Rosner, economist at BNP Paribas in the US, told Bloomberg. “It is a fragile environment to be raising rates. It confirms why the Fed is likely to move very slowly because the inflation outlook remains uncertain and fragile.”

Tech stocks were also weak after Cisco missed analysts' expectations. The share-price drop of 5.82% was the company's heaviest in two years.

Energy stocks fell for the seventh time in eight sessions after crude ended its worst week in eight months with further losses on Friday. The US energy ETF gave up 0.41%. West Texas Intermediate crude oil for December delivery settled $1.01 or 2.4% lower at US$40.74 a barrel after Baker Hughes announced that the number of rigs drilling for oil in the US increased last week for the first time in 11 weeks. December crude declined 8% last week. Read more here.

BHP and Rio Tinto edged higher in US trade as the raw materials sector bounced 1.2% to pare its worst weekly decline since September. BHP bounced 0.78% and Rio Tinto 0.74%. Spot iron ore for import to China shed 40 cents on Friday to US$47.40 a dry ton.

Gold hovered near a five-year low at the end of its fourth straight losing week. Gold for December delivery settled 10 cents or less than 0.1% lower at US$1,080.90 an ounce for a weekly decline of 0.6%. The NYSE Arca Gold Bugs index  gained 0.93%.

Copper set a new six-year low on the London Metal Exchange before closing little changed. London copper hit US$4,787.50 a tonne before rebounding to US$4,825 a tonne, up from US$4,823.50 on Thursday. London-traded aluminium closed flat. Lead lost 0.4%. Nickel improved 0.2%, tin 0.8% and zinc 0.4%. US copper for December delivery dropped 0.5% to US$2.16 a pound.

Europe's benchmark index closed its worst week in more than two months with further losses after a report showed economic growth in the euro-zone fell short of expectations over the three months to September. The Stoxx Europe 600 gave up 0.81%, Germany's DAX 0.69%, France's CAC 1% and Britain's FTSE 0.98%. European markets are expected to come under early selling pressure this week following the Paris attacks.

The dollar was this morning buying 71.14 US cents.

TRADING THEMES TODAY

BRACE YOURSELVES: A volatile session appears likely as the IS attack on France sends shivers through global markets. If markets pursue the traditional 'flight to safety', then we can expect to see traditional havens such as the US dollar, government bonds and gold benefit, while risk assets including equities, the Australian dollar and commodity prices 'should' fall. The Aussie is off about a fifth of a cent this morning, which seems fairly mild in these circumstances. The effect of these sort of terrorist attacks on markets tend to be dramatic in the short term but blips in the broader scheme of things. In other words, history suggests here is no rational reason for investors to pull their money out of the market. Traders might need to check their exposure. The September two-year low on the XJO around 4920 is an obvious price target and possible entry level in the days ahead for those willing/able to look through the short-term fear. BHP finally bounced in the US on Friday night, otherwise that SPI figure would be gloomier this morning.

ECONOMIC NEWS: October vehicle sales are due at 11.30am EST. There are no significant reports scheduled tonight in the US.

Good luck to all.