Daytrading November 19 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

The share market has a third straight advance in its sights after Wall Street staged its strongest rally in four weeks following signals that the Federal Reserve is ready to raise rates.

The December SPI200 futures contract jumped 58 points or 1.2% to 5189 as resource stocks shrugged off another wobbly session on commodity markets, including multi-year lows in nickel, zinc and lead.

US stocks hit their highest level in a week after the minutes from last month's Fed meeting showed "most" members of the central bank believed conditions for raising the target rate “could well be met by the time of the next meeting”.  The S&P 500 was well ahead before the minutes and improved steadily to a final gain of 33 points or 1.62%. The Dow gained 248 points or 1.42% and the Nasdaq 88 points or 1.79%.

"I think the market is ready and comfortable for an increasing Fed funds rate," Alan Rechtschaffen, portfolio manager at UBS Wealth Management Americas in the US, told Reuters. "We just have to turn this aircraft carrier around, get out of this zombie-like economy which is being fed on an elixir of low interest rates and get to a process of normalisation."

The October minutes confirmed that a majority of Fed board members are ready to hike the target rate for the first time in nine years when they meet on December 15-16, barring an “unanticipated shock” or significant deterioration in economic data. The October jobs report, released after the meeting, showed unexpected strength. Read more here.

"The minutes were unusually clear," Jeffery Elswick, director of fixed income at Frost Investment Advisors in the US, told CNBC. "They seem to be leaning toward a December rate hike."

Clarity on rates helped offset mixed housing data. Construction of new homes dived 11% last month to its lowest level since the northern spring. September starts were also revised lower. However, permits for new construction increased 4.1%, a sign that demand may be improving.

Also helping market sentiment were merger action and an analyst upgrade for market heavyweight Apple. France’s Air Liquide is buying US-listed Airgas, and Canadian Pacific Railway announced a bid for Norfolk Southern. Apple lurched 3.17% higher after Goldman Sachs predicted its shares will increase by 43% over the next year.

The US energy ETF tracked oil to a final gain of 1.65% after US crude rebounded from a dip below US$40 a barrel. West Texas Intermediate crude oil for December delivery settled eight cents or 0.1% higher at US$40.75 a barrel after falling as low as US$39.91 on news that US inventories increased again last week.

BHP rallied 1.96% and Rio Tinto 3.59% in US trade as iron ore steadied at a four-month low Spot iron ore for import to China was yesterday unchanged at US$45.80 a dry ton.

US gold stocks surged almost 4% as gold held its ground following the Fed minutes. The NYSE Arca Gold Bugs index rallied 3.85%. Gold for December delivery settled 10 cents an ounce higher at US$1,068.70 ahead of the minutes and was lately trading at US$1,070.10.

A grim session on the London Metal Exchange brought up multi-year lows on several metals: nickel - seven-year low; zinc - six-year low; and lead - five-year low. Copper and aluminium were both close to six-year lows. London copper lost 1.6%, aluminium 0.1%, lead 0.3%, nickel 0.1%, tin 0.7% and zinc 2%. US copper for December delivery was recently down 1.4% at US$2.07 a pound. Read more here.

European stocks pared Tuesday night's strong rally as terrorism raids in Paris weighed on travel stocks. The Stoxx Europe 600 shed 0.14%, Germany's DAX 0.1% amd France's CAC 0.62%. Britain's FTSE edged up 0.16%.

The dollar was this morning buying 71.16 US cents.

TRADING THEMES TODAY

ZOOM: All systems go for a decent rally today after Wall Street applauded some clarity on the rate outlook. The October minutes suggest the Fed is almost certain to raise next month. Markets like clarity, so up went equities. The ASX has been in recovery after a three-week downswing  and should extend that rebound today. The miners had a good session in the US despite the dire state of demand for industrial metals. Energy and gold stocks caught a bid, as did biotechs. In other words, the runway looks unusually clear today. Chocks away!

ECONOMIC NEWS: No significant domestic news scheduled today. Tonight's US highlights are weekly unemployment claims, the Philly Fed Manufacturing Index, a leading index and speeches from two Fed officials.

Good luck to all.