Daytrading October 14 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

The share market's losing run may extend to a third session after Wall Street turned lower as weak Chinese trade data exacerbated concerns about the global economy.

The December SPI200 futures contract fell 30 points or 0.6% to 5161 as China-facing companies such as BHP, Rio Tinto and other miners retreated with industrial metals and crude oil.

US stocks closed near their overnight lows after a mid-session recovery fizzled. The S&P 500 fell 14 points or 0.68% to its first loss in five sessions ahead of after-market earnings updates from Intel and JPMorgan Chase. The Dow dropped 50 points or 0.29% to end a seven-session winning run. The Nasdaq was the worst of the three with a fall of 342 points or 0.87% as biotechs turned lower.

“We’ve had a very, very strong run the first 10 days of October,” Eric Green, director of research at Penn Capital in the US, told Bloomberg. “Some backing and filling is probably appropriate here. It can’t go straight up. I think that the market moves higher for the next few months at least led by areas that were the worst performers for the last nine months which include energy, materials, industrials - cyclicals in general.”

Transport stocks, used by some traders as a proxy for the global economy, led the retreat following disappointing Chinese data yesterday. Imports to China plunged 20.4% last month from a year earlier and exports declined 3.7%. Both figures were weaker than analysts expected. Read more here. The Dow Jones Transportation Average fell 2.22%.

Australia's largest miners felt the heat, along with the dollar and commodities most dependent on Chinese demand. BHP fell 2.37% and Rio Tinto 2% in US trade. The dollar was this morning buying 72.65 US cents, down 1.3% or nearly a cent. Spot iron ore for import to China yesterday declined 80 cents to US$54.90 a dry ton. London copper shed 0.8%, lead 1.8%, nickel 1.6% and zinc 1.3%. Aluminium closed flat. Tin inched up 0.1%. US copper for December delivery was recently off 1.4% at US$2.38 a pound.

Also weighing on the market was a tepid start to the Q3 US corporate earnings season, with gains in earnings among early reporters overshadowed by weak revenue. Shares in Johnson & Johnson eased 0.56% as a strong dollar impacted revenue, a theme that is expected to dominate this reporting season. Intel and JPMorgan Chase reported after the close of regular trade this morning. Shares in Intel were last up 0.47% in after-market trade and JPMorgan Chase down 1.33%.

"Earnings aren't the problem. It's the sales," Nick Raich, CEO of The Earnings Scout, told CNBC. "China data are really telling the story too that demand for foreign goods in China [is] down."

Biotechs fell to a two-week closing low. The iShares Nasdaq Biotechnology Index slumped 3.17%, helping drag the Russell 2000 index of small caps down 1.42%.

Oil extended Monday's 5.1% decline after the International Energy Agency predicted that the market will remain over-supplied for at least another year despite recent drops in production. West Texas Intermediate crude oil for November delivery settled 44 cents, or 0.9% lower at US$46.66 a barrel.

US gold stocks edged higher as gold inched to a new three-month closing high. The NYSE Arca Gold Bugs index gained 0.39%. Gold for December delivery rose 90 cents or 0.1% to US$1,165.40 an ounce.
  
A second straight losing night pushed Europe's benchmark index to its lowest level in more than a week. The Stoxx Europe 600 gave up 0.92%, Germany's DAX 0.86%, France's CAC 0.97% and Britain's FTSE 0.45%.

TRADING THEMES TODAY

RETRACE CONTINUES: The ASX is leading this global retrace and looks set for a third fall after Wall Street belatedly joined in overnight. There doesn't look to be much to it yet but a standard reaction to an extraordinarily strong run through to last Friday. From a technical perspective there is plenty of wiggle room below. The speculative end of the market tends to trail changes in market mood and is still high on last week's rally. The giddy mood can likely handle a few more down sessions. On a general note, volatility on global markets has returned to something close to normal. Overnight moves are generally less than 1%, indicating that the Chinese devaluation/Fed rate-hold panics have passed.

ECONOMIC NEWS: October consumer sentiment figures are due at 10.30am EST. Chinese inflation data land at 12.30pm. Wall Street finally gets some meaty data tonight in the form of retail sales/core retail sales, producer price index/core PPI, business inventories and the Federal Reserve's 'Beige Book'.

Good luck to all.