Morning traders. Thanks Trees and after-market regulars. Market...

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    Morning traders. Thanks Trees and after-market regulars.

    Market wrap:

    Futures traders expect a flat start to trade despite a mixed close on Wall Street and fresh multi-year lows in iron ore, oil and the dollar.

    The December SPI 200 futures contract rallied six points or 0.1% to 5356 after China yesterday cut a key lending rate and US stocks closed little changed.

    Unexpected weakness in consumer confidence and house prices helped drag the S&P 500 two points or 0.12% lower from Monday's record close. The Dow slipped three points or 0.02%, while the Nasdaq edged up three points or 0.07%. Although the night offered several important economic indicators, including a final GDP reading for last quarter, traders showed little inclination to push the market too far ahead of Thursday's Thanksgiving public holiday.

    “The Q3 GDP number is backward-looking, and therefore the market has taken a gigantic yawn to it,” Chad Morganlander, money manager at Stifel Nicolaus in the US, told Bloomberg. “Portfolio managers and traders are squaring their books going into the holiday weekend -- speculators don’t want to get caught in a tornado.”

    Economic growth last quarter was revised upwards to 3.9% from an initial reading of 3.5%, well ahead of the 3.3% reading that economists anticipated. Consumer confidence unexpectedly dived to a five-month low - the Conference Board's index dropped to 88.7 this month from 94.1 in October. Economists had predicted the gauge would rise to 96 as falling fuel prices left more money in consumers' bank accounts. Also weighing on sentiment was news that house prices dipped 0.03% in September as annual price growth slowed to 4.9%, the weakest pace in two years.

    European stocks moved higher following news that Germany narrowly avoided falling into recession last quarter. GDP increased by 0.1% over the three months from July and a contraction during the second quarter was revised to 0.1% from an initial reading of 0.2%. The Stoxx Europe 600 rose 0.16% as Germany's DAX added 0.77%, France's CAC 0.31% and Britain's FTSE 0.02%.

    The Shanghai Composite rallied 1.39% yesterday after Chinese authorities moved to stimulate borrowing for the second time in four days. The People’s Bank of China cut its 14-day repurchase-agreement rate by 20 basis points.

    Mining heavyweights BHP and Rio Tinto closed mixed in US trade despite a decline in iron ore to a new five-year low. Spot ore for import to China yesterday fell $1.40 or 2% to US$68.60 a dry tonne. Read more here. BHP fell 1.59% in US trade, while Rio edged up 0.06%.

    Energy stocks were the biggest drag on the S&P 500 after oil tumbled to a four-year low after a meeting between four of the world's major oil producers failed to produce an agreement on production cuts. Venezuela, Saudi Arabia, Mexico and Russia met overnight to discuss quotas ahead of tomorrow's OPEC meeting. West Texas Intermediate crude oil for January delivery slumped $1.69 or 2.2% to US$74.09 a barrel and was lately lower yet at US$73.82.

    Most base metals extended Monday's declines amid scepticism that China's stimulus efforts will increase demand. In London, copper dropped 1%, lead 0.4%, nickel 0.8%, tin 1.1% and zinc 1%. Aluminium improved 0.2%. US copper for December delivery was recently down more than four cents or 1.4% at US$2.96 a pound.

    "A lot of people are not convinced that this will make an awful lot of difference to Chinese economic growth, that it will feed through to greater lending to smaller companies for example," BNP Paribas analyst Stephen Briggs told Reuters.

    Gold punched through US$1,200 an ounce, but settled just below as traders weighed the mixed news about the US economy. Gold for February delivery settled $1.40 or 0.1% higher at US$1,197.10 an ounce and was recently trading at US$1,200.40.

    The dollar tumbled more than 1% overnight to it weakest point since 2010 after RBA deputy governor Phil Lowe told economists the central bank thought it was still too high relative to the nation's terms of trade. Read more here. The dollar was this morning buying 85.32 US cents after falling as low as 85.14 cents.

    TRADING THEMES TODAY

    THANKSGIVING CAUTION: US traders are preparing for one of the biggest holidays on the American calendar and showed no real interest in moving the market last night. A mixed batch of economic data gave no clear message. Similarly, European traders were not sure whether to be pleased that the German economy is travelling slightly better than expected, or disappointed because it reduces the likelihood that the European Central Bank will introduce more stimulus. The People's Bank of China acted again yesterday, but the market seems to have lost all conviction that the efforts of the last few days will make any difference to real demand. Can't say I'm optimistic about the session ahead, given the moves in commodity prices. We took some medicine yesterday, but there could be more to come.  

    ECONOMIC NEWS: Quarterly construction data is due at 11.30am EST. The US pushes out the rest of the week's economic reports tonight, ahead of the Thanksgiving holiday: durable goods/core durable goods, weekly unemployment claims, new home sales, pending new home sales, personal spending and income, revised consumer sentiment and inflation expectations, Chicago PMI, core price index and crude oil inventories.  

    Good luck to all.
 
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