Daytrading November 6 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

Falls in resource stocks and key commodities point to a soft start to Australian trade after Wall Street closed with modest losses.

The December SPI200 futures contract slipped 10 points or 0.2% to 5176 as BHP, Rio Tinto, copper, gold, zinc and lead plumbed one-month lows and iron ore its weakest level in four months.

US stocks eased further back from Tuesday's three-month peak amid caution ahead of tonight's October jobs report amid on-going concern over Federal Reserve Chair Janet Yellen's indication the previous day that rates may rise next month for the first time in nine years. The S&P 500 fell as low as 2,090 before staging a partial recovery to end the session at 2,101 for a loss of two points or 0.1%. The Dow gave up four points or 0.02% and the Nasdaq 15 points or 0.29%.

“The mild pullback over the past two days is probably more due to a quiet consolidation after a big run-up over the previous few weeks. It’s normal and healthy for the market at this point,” Art Hogan, chief market strategist at Wunderlich Securities in the US, told MarketWatch. “The dollar has gone up, which knocked commodities, especially oil. And energy and materials are selling off as oil went from trading at US$48 a barrel yesterday morning to US$45 today.”

The US dollar index inched up 0.12% to a new three-month high amid growing expectations that the Fed will hike next month. A strong dollar is seen as a negative for dollar-denominated commodities because it increases the cost of buying for holders of other markets.

The US energy ETF gave up 0.88% as crude extended Wednesday night's 3% plunge following news that US inventories increased last week for a sixth straight week. West Texas Intermediate crude oil for December delivery settled $1.12 or 2.42% lower at US$45.20 a barrel.

Australian iron ore giants BHP and Rio Tinto slumped to their weakest points since early October after iron ore declined for the 18th time in the last 19 sessions. BHP dropped 2.93% and Rio Tinto 4.04% in US trade. Spot iron ore for import to China yesterday fell 60 cents or 1.2% to US$47.70 a dry ton. Read more here.

Dollar-sensitive gold stocks continue to move inversely to gains in the US currency, notching fresh one-month lows.   The NYSE Arca Gold Bugs index dropped 4.21%. Gold for December delivery settled $2 weaker at US$1,104.20 an ounce.  

Nickel marked a six-week low and copper, lead and zinc one-month lows in London trade. London copper dived 2.4%, lead 1.6%, nickel 0.6%, tin 1.5% and zinc 1.2%. Aluminium gained 0.1%. US copper for December delivery was recently off 3% at US$2.25 a pound.

Facebook helped sentiment with a rise of 4.64% after beating earnings expectations. Ralph Lauren also rallied post-earnings, while Whole Foods Market, Qualcomm and Sea World Entertainment disappointed. The Nasdaq was held back by more weakness in biotechs as scandal-plagued Valeant hit a two-and-a-half-year low.

First-time claims for unemployment benefits jumped 16,000 last week to 276,000, the highest level in two months but still near historic lows. A separate report showed productivity improved 1.6% over the third quarter.

Europe's benchmark share index broke a three-session winning run after the Bank of England cut the growth outlook for the UK.  The Stoxx Europe 600 shed 0.4% and Britain's FTSE 0.75%. Germany's DAX put on 0.39% and France's CAC 0.64%.

The dollar was this morning buying 71.49 US cents.

TRADING THEMES TODAY

MINERS TO WEIGH: An indifferent week looks like ending with a second straight weekly loss after negative moves on commodity markets overnight. Wall Street more or less overcame an early wobble and has been pretty much marking time ahead of tonight's October jobs report. While no surprises are expected in the data tonight, a surprise is exactly that and remains an outside possibility. Resource stocks face another up-hill session after a string of overnight lows in copper, gold, iron ore and others. On the plus side, there has been plenty of movement at the spec end this week, but the safest approach appears to be to take intraday profits by lunchtime because few bolters are holding their gains.  

ECONOMIC NEWS: The October AIG Construction Index is due at 9.30am EST, followed by the quarterly RBA Monetary Policy Statement at 11.30am. The October non-farm employment change report and unemployment rate are tonight's US highlights. Also due: average hourly earnings and consumer credit.

Good luck to all.