daytrading sep 14 pre-market

Morning traders.

Market wrap:

The long-awaited launch of QE3 pushed US stocks to fresh multi-year heights overnight and has Australian shares aiming higher this morning.

The September SPI 200 futures contract ended the night session 33 points or 0.8% ahead at 4381 after the US Federal Reserve announced it will buy US$40 billion of bonds every month until the jobs market improves and hold the federal funds rate near zero until mid-2015.

The news pushed the S&P 500 to its strongest close since 2007, rising 1.63% as all 10 industry groups advanced. The Dow surged 207 points or 1.55% as all 30 component companies rallied and the Nasdaq put on 1.34% as Apple set a new record high.

The Federal Open Market Committee voted 11-1 to launch a third round of stimulus because without it "economic growth might not be strong enough to generate sustained improvement in labour market conditions." The committee added that, "If the outlook for the labour market does not improve substantially, the committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability." Read more here.

"It was a very powerful statement," a market strategist at Stifel Nicolaus in the US told Bloomberg. "The Fed is going all in here, especially with their commitment to continue asset purchases until they see the desired result in the form of a lower unemployment rate. This statement removes a lot of uncertainty about the Fed's commitment to maintaining price stability."

The Fed move came as the number of people claiming unemployment benefits in the US jumped to its highest level since mid-July. Initial claims increased by 15,000 last week to a seasonally adjusted 382,000, due in part to the effects of Hurricane Isaac. Wholesale prices rose by 1.7% last month, the biggest spike in three years, as the price of oil rallied sharply.

Gold, a traditional haven against inflationary pressures, charged to its highest level in almost seven months. Silver and platinum also moved strongly. Gold for December delivery was lately up $36.80 or 2.1% at US$1,770 an ounce. December silver put on $1.43 or 4.3% at US$34.73 an ounce. October platinum rose $34.50 or 2.1% to US$1,684.10 an ounce.

Oil marked a four-month high as growing protests against the US in the Middle East unsettled the market. Protesters yesterday stormed the the US embassy in Yemen, following attacks in Libya and Egypt. West Texas crude for October delivery was recently up $1 or 1% at US$98.04 a barrel.

The Fed news came too late for regular trade on the London Metal Exchange, but copper rallied in the US. US copper for December delivery was recently up four cents or 1% at US$3.73 a pound. In London, aluminium added 0.7%, lead 1.5%, nickel 0.6% and zinc 0.9%. Copper eased 0.3% and tin lost 1.2%.

Iron ore retreated for a second session yesterday. China's benchmark spot price fell $2 or 2% to US$96.10 per metric tonne.

The Australian dollar burst back above US$1.05 as traders sold the greenback. The Aussie was lately buying US$1.0552.

Earlier, most European markets closed in the red in cautious trade before the Fed announcement. Germany's DAX pulled back 0.46% and France's CAC 1.18%. Britain's FTSE advanced 0.66%.

TRADING THEMES TODAY

RISK ON: Three cheers for Helicopter Ben. If you're long in the share market, the 'Bernanke Put' just came through for you. How effective a third round of bond-buying will be remains to be seen, but right now the market likes it. Past evidence suggests we should see several months of share market and commodity price growth as the cash pushed into the bond market by the Federal Reserve looks for a home. The rising tide lifted all boats in the US last night but standouts included the S&P Bank Index, which jumped 3%, and gold/silver miners, up 5%. Yesterday's second day of declines in the price of iron ore may limit the upside for our market but a revival in the ore price today would not surprise.

ECONOMIC NEWS: No significant domestic news scheduled today. Europe has inflation and employment data tonight, plus a meeting of European Union finance ministers. A busy night in the US includes retail sales/core retail sales, consumer inflation/core CPI, preliminary consumer sentiment and inflation expectations, industrial production, capacity utilisation rate and business inventories.

Good luck to all.