Daytrading Feb 2 pre-market

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    Morning traders. Thanks Trees and after-market regulars.

    Market wrap:

    The share market's seven-session winning run faces headwinds after China released weak factory data over the weekend, compounding sharp losses on Wall Street amid concerns over economic growth.

    The March SPI 200 futures contract fell 24 points or more than 0.4% to 5518 before China announced the first "official" contraction in factory activity in more than two years.

    US stocks ended their worst month in a year with a late sell-off on Friday after data suggested the economy lost momentum over the last three months of last year. The S&P 500 declined 26 points or 1.3% to end January 3.1% in the red. The index's loss for the week was 2.8%. The Dow gave up 252 points or 1.45% on Friday, extending its loss for the month to 3.7%. The Nasdaq dropped 48 points or 1.03% on the day and 2.1% over January.

    Friday's sell-off followed unexpectedly soft Q4 gross domestic product data. Growth slowed to an annual pace of 2.6% over the last three months of the year from 5% in the third quarter. Economists surveyed by Bloomberg anticipated growth of around 3%.

    “The headline number was very disappointing, so investors are buying bonds and selling stocks because they think the economy is decelerating," Phil Orlando, chief equity strategist at Federated Investors in the US, told MarketWatch. "However, this number is likely to be revised upwards."

    Nine out of ten S&P 500 industry sectors fell, with utilities the worst at -2.2%. Small caps also suffered more than the broader market as a flight to safety sent the Russell 2000 down 2.08%. The only industry group to resist the down-draught was energy after an 8.3% relief rally in crude. Energy stocks rallied 0.7% as West Texas Intermediate surged $3.71 or 8.3% to settle at US$48.24 a barrel. Analysts attributed the rebound in crude mostly to short covering on the last trading session of the month.

    China's official manufacturing purchasing managers' index fell to its lowest level since September 2012, the nation's National Bureau of Statistics said yesterday. The PMI declined to 49.8 from 50.1 in December. Economists polled by Reuters had predicted a rebound to 50.2. A separate index of services activity slipped to  53.7, the lowest level in a year, from 54.1 in December, but remained above the 50-point level that separates contraction from expansion. Read more here.

    Gold stocks provided a haven during Friday's 'risk-off' session in the US, driving the NYSE Arca Gold Bugs index up 3.12%. Gold ended its best month in three years 8% higher after the February contract settled $23.90 or 1.9% ahead on Friday at US$1,278.50 an ounce.

    “The US GDP number released today has clearly shown that the growth is slowing down and this is a positive sign if you are a buyer of gold,” Naeem Aslam, chief market analyst at AvaTrade in the UK, told MarketWatch.

    Iron ore edged closer to US$60 a tonne, with the spot price for import to China falling another 60 cents on Friday to US$61.70 a dry tonne. Australia's largest miners closed mixed in US trade on Friday. BHP rallied 1.4% and Rio Tinto lost 0.36%.

    Upbeat European data boosted most base metals, but European equities declined. Germany announced its strongest retail sales in two and a half years, while data from France and Spain was also ahead of expectations. London copper rallied 2%, aluminium 2.5%, nickel 1.8% and zinc 1.7%. Lead closed unchanged and tin dipped 0.6%. US copper for March delivery bounced 1.9% or more than five cents to US$2.50 a pound. The Stoxx Europe 600 eased 0.46% as Germany's DAX gave up 0.41%, France's CAC 0.59% and Britain's FTSE 0.9%.

    The dollar was this morning buying 77.54 US cents.


    CHINESE WORRIES WEIGH: The ASX was remarkably resilient against Wall Street weakness last week, but faces further pressure this morning from confirmation that our largest trading partner is again losing momentum. HSBC's final manufacturing PMI, due at 12.454pm EST, offers another opportunity to gauge the pace of the slowdown. Analysts expect the index to hold steady at 49.8, according to Forex Factory - below the 50-point mark that indicates expansion. Gold stocks were a stand-out in the US as traders chased havens. The move in oil was too sudden to be fully reflected in the prices of US energy stocks. Still, it's tempting to have a look here today. No sign of a bottom in iron ore yet.

    ECONOMIC NEWS: The AIG Manufacturing Index is due at 9.30am EST, followed by the monthly inflation gauge at 10.30am and year-on-year commodity prices at 4.30pm. However, the main event during Australian trading hours is HSBC's Final Manufacturing PMI at 12.45pm. Europe and the US release manufacturing data tonight. Other US highlights include personal spending and income, construction spending, manufacturing prices and core price index.

    Good luck to all.
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