Daytrading Sep 8 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

Shares are likely to open little changed as a new five-year low in iron ore and minor losses in BHP and Rio Tinto in overseas trade offset a record close on Wall Street.

The September SPI 200 futures contract slipped two points or less than 0.1% to 5592 in cautious trade following two days of falls at the end of last week.

US stocks rallied on Friday as traders interpreted unexpectedly weak employment data as a reason for the Federal Reserve to leave lending rates at record lows for longer. The S&P 500 ovecame a brief post-announcement dip to rise 10 points or 0.52% to an all-time closing high of 2,007.71. The Dow added 67 points or 0.39% and the Nasdaq 21 points or 0.45%.

The monthly jobs report showed the US labour market lost momentum during August, creating just 142,000 of the 228,000 new positions that Wall Street analysts anticipated. Even so, the uemployment rate fell to a six-year low of 6.1% from 6.2% in July as fewer people looked for work. Jobs growth was the weakest since December and broke a recent run of robust economic signals that had traders betting that Janet Yellen's Federal Reserve will raise lending rates next year. Read more here.

“This data point is much more dovish,” Alan Gayle, director of asset allocation at RidgeWorth Investments in the US, told Bloomberg. “It promotes the argument of keeping rates lower for longer. It supports Yellen’s more measured moving away from tightening.”

Adding to the upbeat mood on Wall Street was news that Ukraine and Russia signed a ceasefire agreement following five months of fighting along Ukraine's eastern border. The announcement came as NATO countries met in Wales to discuss fresh sanctions against Russia.

All ten S&P industry sectors rose, led by the defensive utilities sector. The S&P 500 erased three days of modest declines to end 0.2% higher for the week.

An on-going decline in iron ore helped cap Australia's biggest miners in US trade. BHP fell 0.1% and Rio Tinto 0.02% as spot iron ore for import to China dropped another 70 cents to US$83.60 a dry tonne. The collapsing price claimed its first Australian victim on Friday, with Western Desert Resources entering administration after failing to secure fresh funding. Read more here.

Nickel marked a new two-month high as traders speculated about the supply implications of a Philippine senator's demand for an export ban on nickel ore. In London, nickel rallied 0.85% and copper 0.65%. Aluminium lost 0.6%, lead 0.9%, tin 0.2% and zinc 0.2%. US copper for December delivery improved two cents or 0.7% to US$3.17 a pound.

Oil succumbed to the negative demand implications of weaker US jobs growth. West Texas Intermediate crude oil for delivery in October retreated $1.16 or 1.2% to settle at US$93.29 a barrel. The contract later pared its fall to end the session at US$93.45.
Gold stocks steadied at the end of a losing week as the US jobs report encouraged some haven buying. The NYSE Gold Bugs index put on 0.27%. Gold for December delivery edged up 80 cents or less than 0.1% to settle at US$1,267.30 an ounce. The contract continued to improve, closing the session at US$1,269.20.

European stocks pared falls following news of the Ukraine ceasefire but closed before the rally on Wall Street gathered steam. The Stoxx Europe 600 index lost 0.38% as Germany's DAX put on 0.23%, France's CAC lost 0.2% and Britain's FTSE gave up 0.33%.
The dollar was this morning buying 93.66 US cents.

TRADING THEMES THIS WEEK

IRON ORE: Expect to hear a lot this week about the impact of the falling iron ore price after WDR fell into administration on Friday. Commiserations to holders - it was a good trading stock over the years. The price of Australia's largest export has now fallen to levels where some smaller and medium producers struggle to turn a profit. There are also implications for the national balance of trade as the value of exports declines.

URANIUM: Prime Minister Tony Abbott gave the moribund uranium sector a leg-up on Friday with the ending of a ban on exports to India. The deal had been well flagged but may prove the shot in the arm that local listed uranium producers need.

DIVIDEND DELUGE: One reason why the Australian share market underperformed global peers last week was the negative impact of stocks trading without their dividends (BHP being the most notable). That theme will continue this week, with IAG, CSL, RCG, RHC, PMP and VED going ex-dividend today, WES tomorrow, ARI and SFR on Wednesday, MNF on Thursday and SKI and DMP on Friday. (Sources: Fairfax, BRR)

CHINA-WATCHING: Headwinds for the ASX this week likely include further evidence that this year's up-tick in Chinese growth was no more than that. Reports over the last two months suggest the Chinese economy lost momentum again. This week's opportunities to take the pulse include trade figures at lunchtime today (exact time uncertain), new loan and money supply data some time this week from Wednesday onwards (exact time/date uncertain), inflation data on Thursday and industrial production, fixed asset investment and retail sales on Saturday.

ECONOMIC NEWS: A solid domestic menu this week climaxes with Thursday's monthly employment update. Also on the menu: job ads (11.30am EST today); business confidence, home loans (Tue); consumer sentiment (Wed); and employment change, unemployment rate and inflation expectations (Thu). This week's US highlights are: JOLTS job openings (tomorrow night); weekly jobless claims (Thu); and retail sales/core retail sales and preliminary consumer sentiment (Fri).

Good luck to all.