Markets are mixed this morning as investors are trying to absorb a barrage of news on a number of fronts that could heavily influence trading in the days to come.
U.S. stock index futures are slightly lower and European markets are down, while commodity futures are higher and Asian markets are up.
There's a lot of concern this morning over a possible flare-up of the European sovereign debt crisis after Italian Prime Minister Mario Monti Sunday said he would resign once parliament approves a 2013 budget. He has been praised for his plans to fix the country's fiscal mess, and adding to the uncertainty, the scandal-plagued former prime minister Silvio Berlusconi said he will run for prime minister in elections expected early next year.
Italian bond yields jumped sharply today as the political upheaval is threatening to push the euro zone's third largest economy back to the forefront of the debt crisis.
The news out of Asia this weekend was mostly favourable for markets. China reported a slew of positive economic reports, bolstered by stimulus measures and early confidence in the country's new top leavers. Both factory output and retail sales improved on October’s results, up 10.1 per cent and 14.9 per cent year-on-year, respectively. Inflation ticked up slightly to 2.0 per cent, up from a 33-month low of 1.7 per cent in October, while the producer price index fell to 2.2 per cent.
But there was a caveat: China's trade numbers were surprisingly weak, with the country's exports growing only 2.9 per cent in November, much slower than growth of 11.6 per cent in October.
Meanwhile, worries about the looming "fiscal cliff" of tax hikes and spending cuts set to take hold at the start of next year in the U.S. haven't gone away.
Talks are going on behind closed doors but there seemed to be some reason for optimism this weekend. President Barack Obama of the Democrats and House Speaker John Boehner of the Republicans met Sunday and several Senate Republicans have been dropping hints that they may be willing to accept tax hikes.
Here in Canada, a big focus will be on the energy sector's reaction to Ottawa's decision late Friday to block future oil sands takeovers by state-owned firms. The requirement was issued as the government approved the foreign takeovers of Nexen Inc. and Progress Energy Resources Corp.
Shares in smaller producers could especially come under pressure given the new rules reduces the possibility of takeovers. But larger firms could benefit since they will have less competition as they look to acquire assets.
Now, here's a look at what else investors need to know this morning.
U.S. futures: S&P 500 -0.2 per cent; DJIA -0.1 per cent; Nasdaq -0.2 per cent
Hong Kong's Hang Seng index +0.39 per cent
Shanghai composite index +1.08 per cent
Japan's Nikkei +0.07 per cent
London’s FTSE 100 -0.28 per cent
Germany’s DAX -0.53 per cent
France's CAC 40 -0.57 per cent
WTI (Nymex Jan) +0.63 per cent at $86.47 (U.S.) a barrel
Gold (Comex Feb) +0.49 per cent at $1,713.90 (U.S.) an ounce
Copper (Comex Mar) +1.28 per cent at $3.71 (U.S.) a pound
Canadian dollar up 0.0044, or 0.44 per cent, at 1.0126 (U.S.)
STOCKS AND ECONOMIC INDICATORS TO WATCH:
Housing starts in Canada dropped in November to an annual pace of 196,125, from October’s 203,487, Canada Mortgage and Housing Corp. said today. Economists had expected 200,000 annualized starts.
Several TSX energy stocks will be in play after Ottawa's decision to block future oil sands takeovers by state-owned firms. Smaller players such as Athabasca Oil Corp., Meg Energy Corp., Connacher Oil and Gas Ltd. and Southern Pacific Resource Corp. could come pressure on perceptions that they now deserve less of a takeover premium.
Nexen Inc. and Progress Energy Resources Corp. will rise sharply to reflect their takeover prices. In the premarket, U.S.-listed Nexen shares are up 16 per cent at $27.05, just shy of the $27.50 offering price.
Groupon shares are down 2.6 per cent in the premarket after soaring 23 per cent on Friday on a Bloomberg report that Google Inc. may reconsider buying the online coupon company.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
The German and French stock markets are on a roll.
End-of-quarter window dressing by investment managers is real, according to a new study. But that doesn't mean you can make money by trading on that.
Just how wise is Warren Buffett? Checking the numbers.
Why Hewlett-Parkard could be an excellent contrarian play for 2013.
The premarket report is constantly updated to reflect the latest news developments and market moves. For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities