North American stock markets are off to a firmer start, inspired by a positive economic report out of Germany this morning and still lingering feelings that the recent sell-off over worries about the U.S. fiscal cliff was overdone.
Shares in Research In Motion Ltd. are down nearly 5 per cent in Toronto, giving back a modest amount of gains from Thursday's 17 per cent advance. Its U.S. shares, which weren't traded Thursday because of American Thanksgiving, are playing catchup this morning to the big rally, up 12 per cent. Traders within the much more liquid U.S. market are feeling Thursday's made-in-Canada rally might have been a little too exuberant given that, other than some upbeat analyst reports, there really wasn't much fresh news on RIM.
In early trading, the S&P/TSX index is up 46 points, or 0.3 per cent, at 12,199; the S&P 500 is up 9 points, or 0.6 per cent, at 1,400; and the Dow Jones industrial average is up 88 points, or 0.6 per cent, at 12,925.
U.S. exchanges will close early today at 1 p.m. (ET) and it should be a subdued day overall given a lack of fresh U.S. economic and corporate reports.
Traders have found some encouragement from an unexpected rise in German business confidence. The Ifo institute said its business climate index climbed to 101.4 this month, beating expectations for about 99.5. It was a welcome reading that prompted some economists to speculate that the better-than-expected factory data from the U.S. and China this week may eventually help benefit German industry.
Markets are keeping a close eye on the second day of European Union budget talks today. A tense first session on Thursday left many observers predicting leaders will need more time to bridge their differences over the bloc’s spending priorities for the years to come. Euro-area finance ministers are meeting Monday to discuss aid to Greece, which will be even more closely followed by market players.
Greece's finance minister said today that the International Monetary Fund has relaxed its debt-cutting target for Greece and only a €10-billion ($13-billion) gap remains to be filled for a vital aid tranche to be paid. But others involved in the talks cautioned that the funding gap was far bigger than that suggested by Greece and that the two sides were not on the verge of striking a deal to resolve the euro zone’s most intractable problem.
The Canadian dollar is nearly unchanged, continuing to trade just slightly above parity. Inflation figures this morning from Statistics Canada didn't inspire too much excitement. While inflation was a little higher than expected in October, the rate remained well below the central bank’s 2 per cent target, suggesting interest rate hikes are still a long way off.