daytrading sep 7 pre-market

Morning traders.

Market wrap: Australian shares are set to recoup most of yesterday's losses at today's open after overnight retreats in the US and Europe fell short of the worst expectations.

The September SPI futures contract ended the night session 60 points or 1.5% stronger at 4128 as traders bet that the ASX overshot to the downside during two days of trading while Wall Street was closed for the Labor Day public holiday.

US stocks fell for a third night amid heightened fears about Europe's debt crisis, but the benchmark indexes pared initial falls by around two-thirds before the closing bell. The Dow tumbled more than 300 points in the first hour but closed just 101 points or 0.9% weaker after a positive report on the services sector and an upbeat outlook on the economy from Federal Reserve member Narayana Kocherlakota. The S&P 500 closed 0.74% weaker and the Nasdaq lost 0.26%.

The night's only economic report showed the services sector unexpectedly improving last month. The Institute for Supply Management services index improved to 53.3 from 52.7 in July.

"You have to look at all the indicators, and up until employment on Friday most of those indicators were a little better than feared," the chief economist at Nationwide in the US told MarketWatch. "When you put it all together we're going to find the third quarter a little stronger than the first half, albeit with a recovery that is struggling to gain momentum."

Federal Reserve Bank of Minneapolis President Kocherlakota said in a speech he did not expect recent data would force the Federal Reserve to launch any further stimulus programs at this month's meeting.

European markets closed mixed as Italian austerity measures faced opposition and euro-zone leaders met to discuss faltering plans for a second Greek bailout package. Banks exposed to European sovereign debt and US mortgage security lawsuits were once again the biggest losers as Germany's DAX fell 1% and France's CAC 1.13%. Britain's FTSE rallied 1.06%

"European policy makers are still not able to talk with one voice," the head of research at BNP Paribas Fortis Global Markets told MarketWatch. "Any hesitation on the part of government to come up with credible plan is immediately punished very harshly in the markets."

Oil and most metals ended a choppy session little changed despite a rally of nearly 1% in the US dollar as investors continued to favour traditional havens over risk assets. Oil traded as low as US$83.20 but was lately off just three cents at US$86.42 a barrel.

Gold hit an intraday record of US$1,923.70 an ounce before moderating as US stocks recovered most of their losses. Gold for December delivery was recently off 50 cents or less than 0.1% at US$1,876.30 an ounce.

Industrial metals finished the night mixed but mostly little changed. In London, copper eased 0.15%, lead 1.3%, nickel 0.4% and tin 0.1%. Aluminium was flat and zinc rallied 1.2%. US copper played catch-up with overseas moves during the Labor Day holiday, falling 1.5%.

TRADING THEMES TODAY

CLAWING BACK: The excessive gloom on the ASX got ahead of itself this week and will be pared back at the opening bell despite a third straight losing session in the US. There were positive signs last night that US stocks have fallen far enough to bring in buying interest. However, today's bright start may be little more than a selling opportunity as Europe staggers from one crisis to the next. Germany's Constitutional Court is due to announce tonight whether Berlin's loans to Greece and other debt-ridden euro-zone partners are legal.

GDP RECOVERS?: Quarterly growth figures due to be released at 11.30 am AEST will be closely examined for evidence of a return to health following a negative reading in March in the aftermath of the Queensland floods. The median forecast is for growth of around 1% last quarter, following a 1.2% contraction in the three months to March.

ECONOMIC NEWS: Reserve Bank Governor Glenn Stevens is due to address the WA Chambers of Commerce and Minerals & Energy at 9.30 am AEST. Also due at 9.30 am: the monthly construction index. Quarterly GDP figures are due at 11.30 am (see above). A fairly light week for US economic news continues tonight with the Federal Reserve's "Beige Book" and a speech from Federal Reserve Bank of Chicago President Charles Evans.

Good luck to all.