Daytrading October 27 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

Stocks face a flat start following a mixed close on Wall Street ahead of an earnings update from market heavyweight Apple and a US Federal Reserve policy statement.  

The December SPI200 futures contract rose three points or less than 0.1% to 5335 as markets from Europe to the US marked time after several weeks of strong gains.

The S&P 500 eased four points or 0.19% as energy shares followed the price of crude lower and Apple declined after a supplier reported disappointing earnings. The Dow shed 24 points or 0.13%. The Nasdaq eked out a gain of three points or 0.06% with improvements in Microsoft, Amazon and Alphabet offsetting Apple. The mood was more sober as traders questioned why central banks from Europe to China announced more stimulus measures last week.

“After last week’s big rally, the market is taking a breather and assessing the outlook for monetary policy on the back of [European Central Bank President Mario] Draghi’s speech [last week] and more easing in China,” Alessandro Bee, strategist at Bank J Safra Sarasin in Switzerland, told Bloomberg. “Central banks will be in focus again with the Fed meeting this week. It will be interesting to see if their outlook on the economy has changed.”

While few economists expect the Fed to raise rates tomorrow night, some analysts highlighted the possibility that the central bank will clarify the timing of the first increase in nine years. The stock market has rallied more than 11% since August.

"Of all the uncertainties out there the biggest one is probably the Fed statement on Wednesday," David Kelly, chief global strategist at JP Morgan Funds in the US, told CNBC. "I don't expect anything out of the Fed but they may make their statement more hawkish and raise expectations they may raise rates this year. It'll be interesting to see whether the Federal Reserve acknowledges that financial markets have recovered."

Apple slipped 3.25% after an earnings miss from a supplier raised doubts about the outlook for tonight's quarterly earnings update from the world's biggest company by market capitalisation. Dialog Semiconductor, which makes chips for iPhones and iPads, was smashed more than 20% lower after earnings and guidance missed expectations. Apple had its best week of the year last week.

The energy sector was the biggest drag on the S&P 500 as crude oil extended two weeks of losses. The US energy ETF gave up 2.45%. West Texas Intermediate crude oil for December delivery settled 62 cents or 1.39% lower at US$43.98 a barrel.

Australian heavyweights BHP and Rio Tinto gave back some of Friday's 'Chinese-rate-cut' gains. BHP lost 1.2% and Rio 1.28% in US trade. Spot iron ore for import to China yesterday retreated 10 cents to US$50.80 a dry ton.

The NYSE Arca Gold Bugs index dropped 3.82% despite a modest rise in gold. Gold for December delivery settled $3.40 or 0.3% ahead at US$1,166.20 an ounce as the US dollar retreated ahead of tomorrow night's Fed meeting.

Copper bucked a downtrend on the London Metal Exchange as traders waited for news this week from China's annual policy-setting plenum. London copper gained 0.4%. Aluminium shed 1.1%, nickel 0.5%, tin 1.6% and zinc 0.8%. Lead was flat. US copper for December delivery was recently up 0.2% at US$2.35 a pound.

European stocks pulled back from last week's two-month high. The Stoxx Europe 600 dropped 0.39%, France's CAC 0.54% and Britain's FTSE 0.42%. Germany's DAX edged up 0.06% after a gauge of business sentiment deteriorated less than expected.

The dollar was this morning buying 72.46 US cents.

TRADING THEMES TODAY

MARKING TIME: There was a notable lack of follow-through buying here yesterday, which suggested the giddy mood on world markets had significantly abated over the weekend. So it proved, with Wall Street and Europe easing off last week's closing highs, but not so much as to raise any red flags. Global indices have run pretty hard for the last three weeks and may need time to consolidate this rally. Back home, the specs kicked back into life yesterday while the big end took a breather. Same again today?"

ECONOMIC NEWS: No significant domestic news scheduled today. Tonight's US highlights include Q3 earnings from Apple, September durable goods/core durable goods, October consumer confidence, Richmond Manufacturing Index, preliminary services data and house price index.

Good luck to all.