Daytrading September 9 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

Australian shares look set to chase Wall Street higher after a relief rally in China helped fuel the S&P 500's second-best night of the year.  

The September SPI200 futures contract rallied 44 points or 0.9% to 5144 as US stocks jumped more than 2.4% to exit a technical correction.

US traders who sold out before the Labor Day long weekend because of fears of a Chinese meltdown, piled back into the market overnight after the Shanghai Composite surged 2.92% late yesterday. The S&P 500 climbed 48 points or 2.51% to reverse most of last week's heavy 3.4% fall, the second worst of the year. The Dow regained 390 points or 2.42% and the Nasdaq 128 points or 2.73%.

"Investors who took some risk off the table last week when China’s markets were closed for two days came back... to rallying markets in Europe and Asia, which helped sentiment,” Colin Cieszynski, chief market strategist at CMC Markets, told MarketWatch.

"I think the worst-case scenario of China reopening [lower] didn't come to fruition," Art Hogan, chief market strategist at Wunderlich Securities in the US, told CNBC. "I think it's a week where we're risk-on... barring any negative news out of China."

The Shanghai Composite, which slumped 2.52% on Monday when it resumed trade following a four-day public holiday, more than reversed those losses late yesterday after weak trade data ignited speculation about further government stimulus measures. Chinese exports declined for a second straight month, falling 5.5% during August, according to customs data. Imports slumped 13.8%. Read more here. Yesterday's late rally echoed similar sessions in recent months when the government has intervened to support the market.

European stocks rallied for a second night following strong German trade data and a positive revision to second-quarter European growth figures. Record German exports helped soothe concerns about demand in the global economy. Q2 GDP for the euro-zone was revised upwards to 1.5% from an initial reading of 1.2%, a sign that a recovery in the European economy has strengthened as the year progressed. The Stoxx Europe 600 put on 1.18%, Germany's DAX 1.61%, France's CAC 1.07% and Britain's FTSE 1.18%.

All 10 S&P 500 industry groups advanced at least 1.3%, according to Bloomberg. Industrials, raw materials, health and IT led the pack with gains of more than 2.4%. The Nasdaq exited a technical correction and turned positive for the year. The Dow fell 0.2% short of exiting a correction and remained underwater for 2015.

The Federal Reserve is due to meet next week for one of the most highly-anticipated policy meetings in years. Futures pricing indicates a 30% possibility that the central bank will increase rates.

BHP rebounded 4.06% and Rio Tinto 4.91% in US trade. Spot iron ore for import to China yesterday improved 40 cents to US$56.40 a dry ton despite news that ore imports dropped 14% last month. Read more here.

Copper bounced to a 10-week high on the London Metal Exchange after Chinese imports held steady last month. London copper surged 3.8% to extend its recovery since last month's six-year low to more than 10%. Aluminium added 1.9%, lead 1.3%, nickel 2.6% and zinc 2.3%. Tin eased 0.5%. US copper for September delivery was recently up almost 5% at US$2.43 a pound.

The bullish market mood helped lift the US energy ETF 1.54% even as crude oil reversed some of last week's gains. West Texas Intermediate crude oil for October delivery settled at US$45.94 a barrel, a loss of 11 cents or 0.2%.

Gold stocks eked out a gain of 1.19% as a weaker US dollar helped cushion gold from the swing towards risk assets. Gold for December delivery gave up 40 cents to settle at US$1,121 an ounce.

The Australian dollar was this morning back above 70 US cents, lately buying 70.2 US cents.

TRADING THEMES TODAY

RELIEF RALLY UNDERWAY: China did not collapse while US traders enjoyed a long weekend, so up we go. The ASX smelled the prevailing wind yesterday and successfully pre-empted much of the overnight strength, so we likely do not have as far to travel today. For now, 'bad' Chinese economic news appears to be seen as 'good' news for the market because it increases the chances of more government stimulus - there is no other way to explain the reaction to some pretty lousy Chinese trade figures yesterday. WPL's swoop on OSH yesterday was a hint that some people think we are near the bottom of this commodities cycle, at least so far as crude oil is concerned. A few more take-over offers would be a huge tonic for the resources sector, and the ASX in general.

ECONOMIC NEWS: September consumer sentiment figures are due at 10.30am EST, followed by July home loans at 11.30am. A light week for US data continues tonight with JOLTS job openings the only scheduled report of any weight.

Good luck to all.