Daytrading September 15 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

Shares look set to open modestly weaker as the nation wakes to a new Prime Minister and after Wall Street ticked lower overnight.

The September SPI200 futures contract eased 15 points or 0.3% to 5076 following a narrow low-volume session in the US with buying interest depressed by a Federal Reserve rate decision later this week and a Jewish New Year holiday.

With no major overnight economic news to set the mood and weakness across key Asian and European markets, US stocks traded in their tightest range in almost a month. The S&P 500 closed eight points or 0.41% lower. Trading volumes were about 26% below the 30-day average with many traders on leave for Rosh Hashana, according to Bloomberg. The Dow lost 62 points or 0.38% and the Nasdaq 17 points or 0.34%.

“I would characterise today’s trading action as people in ‘wait and see’ mode ahead of the Fed meeting on Thursday,” Brian Fenske, head of sales trading at ITG in the US, told MarketWatch.

A vacuum in economic leads ahead of tonight's retail sales and industrial production reports and Thursday night's Fed rate decision meant US traders took their cues from another weak session in China yesterday, where the Shanghai Composite declined 2.67% after being down as much as 4.7%. The sell-off came after weekend data showed factory output and asset investment were softer than expected last month. Commentators speculated about government intervention to prop the market yesterday, pointing to a 1.5% rise in an index of mostly state-owned large caps. Read more here.

The ASX 200 yesterday closed 0.5% ahead, with the market paring gains late in a choppy session after Malcolm Turnbull announced a challenge for the federal Liberal leadership. Turnbull defeated Tony Abbott 54 votes to 44 in a ballot of federal Liberal MPs last night to become the nation's 29th Prime Minister.

The weak mood in Asia fed a downbeat session in Europe, where the Stoxx Europe 600 fell 0.59%, France's CAC 0.67% and Britain's FTSE 0.54%. Germany's DAX edged up 0.08%.

Materials and energy were the biggest weights on the S&P 500, falling 1.3% and 0.8%, respectively. BHP and Rio Tinto resisted the sell-off after an analyst upgrade for BHP. The big Australian put on 0.12% and Rio Tinto 0.62% in US trade. Spot iron ore for import to China yesterday declined $1 to US$57.50 a dry ton.

Oil drifted to a two-week low amid concerns about the outlook for Chinese demand. West Texas Intermediate crude oil for October delivery settled 63 cents or 1.4% weaker at US$44 a barrel.

Base metals also came under pressure from Chinese demand worries. In London, copper and aluminium gave up 1.1%, lead 1.8%, nickel 3.8% and zinc 3.3%. Tin was bid up 0.2%. US copper for December delivery was recently off 1.75% at US$2.41 a pound.

"You don't have to look far to find the culprit for this move, the perception of China's growth hasn't improved," Peter Ferig, founder of Quantitative Commodity Research, told Reuters.

A tentative rebound in gold failed to boost US gold miners. The NYSE Arca Gold Bugs index shed 1.88% even as gold for December delivery settled $4.40 or 0.4% ahead at US$1,107.70 an ounce. The precious metal has suffered three straight weeks of losses.

The dollar was this morning buying 71.42 US cents.

TRADING THEMES TODAY

WAIT AND SEE: Wall Street marked time overnight ahead of the Fed's rate decision on Thursday (not Wednesday, as some idiot may previously have suggested in this space - sorry). China once again cast a long shadow following the soft weekend data flagged here yesterday. The ASX seemed to shrug it off yesterday but may not be as sanguine today. On the other hand, The Lodge will shortly have a new occupant, removing another possible source of uncertainty. The economic calendar begins to rev up today both here and abroad.

ECONOMIC NEWS: The minutes from the Reserve Bank's policy meeting earlier this month are released at 11.30am EST. Also due then: new motor vehicle sales. A night of substantial US data includes retail sales/core retail sales, industrial production, Empire State Manufacturing Index, capacity utilisation rate and business inventories.

Good luck to all.