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Inside the Market

Premarket: Flat start for TSX, Barrick could slide Add to ...

European stocks and major commodities are modestly higher this morning, but U.S. equity futures are flat, suggesting the TSX will struggle to open in the green.

The cupboard is pretty bare for economic data today, so the main focus will be on Alcoa's earnings after market close, which will - as usual - unofficially kick off the quarterly reporting season. The Street is looking for earnings of 6 cents a share for the aluminum producer and economic bellwether, setting the tone for a pretty flat earnings season overall in the U.S. According to estimates compiled by Bloomberg, fourth-quarter profits at companies within the S&P 500 are expected to grow 2.9 per cent on average, but only 0.5 per cent if you exclude financial companies.

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Markets haven't had too much reaction this morning to some grim economic reports out of Europe. German exports fell 3.4 per cent in November from October, the steepest decline in more than a year and far worse than the 0.5 per cent drop economists had expected. Meanwhile, euro zone unemployment rose to a record 11.8 per cent in December, with 113,000 more people out of work, another report found. On the bright side, morale among businesses in the euro zone rose by 1.3 points to 87 in December for the second straight month of gains.

Overall, market players remain worried about the likely U.S. political brinkmanship ahead in determining future budget spending levels and the debt ceiling. With the U.S. and many other key global economies likely to continue to see slow growth in the year ahead, and corporate profits far from surging, investors aren't in any rush to increase equity exposure.

Now, here's a closer look at what else you need to know this morning:

MARKETS:

Equities:

U.S. futures: S&P 500 -0.2 per cent; Dow -0.2 per cent; Nasdaq unchanged

Hong Kong's Hang Seng index -0.94 per cent

Shanghai composite index -0.41 per cent

Japan's Nikkei -0.86 per cent

London’s FTSE 100 +0.25 per cent

Germany’s DAX +0.26 per cent

France's CAC 40 +0.66 per cent

Commodities:

WTI (Nymex Feb) +0.55 per cent at $93.70 (U.S.) a barrel

Gold (Comex Feb) +0.47 per cent at $1,654.00 (U.S.) an ounce

Silver (Comex Mar) +0.89 per cent at $30.35 (U.S.) an ounce

Copper (Comex Mar) +0.16 per cent at $3.68 (U.S.) a pound

Currencies:

Canadian dollar up 0.0012, or 0.12 per cent, at $1.0156 (U.S.)

ECONOMIC INDICATORS TO WATCH:

No major reports scheduled.

STOCKS TO WATCH:

Barrick Gold Corp.'s U.S. shares are down 0.2 per cent in the premarket after it ended talks to sell a stake in majority-owned African Barrick Gold to a Chinese buyer, dashing hopes of a potential $3-billion deal for the underperforming unit. Shares in African Barrick, of which Barrick Gold owns 74 per cent, fell 20 per cent in London.

Canaccord today added Scotiabank to "focus list" - its highest conviction investing ideas. It maintained a price target of $67.

Monsanto shares are up 4 per cent in the premarket after reporting fiscal first-quarter adjusted earnings per share of 62 cents, well past analysts' forecasts.

Yum Brands Inc. shares are down 4 per cent in the premarket after the fast food operator warned late Monday that fourth-quarter same-store sales in China will fall more than previously expected. The critical division for the company is now expected to post a drop in same-store sales of 6 per cent, versus its previous estimate of a 4 per cent decline.

THIS MORNING'S TOP INVESTING READS ON THE WEB:

Here's the exact moment (and reason) Apple investors panicked at the start of the recent selloff.

Last week, the Chicago Board Options Exchange’s volatility index dropped 39 per cent — its biggest one-week retreat ever — after lawmakers and the White House reached a hard-fought deal to avert the billions of dollars in tax increases and spending cuts that had been set to hit the economy on Jan. 1. But Wall Street's "fear index" is poised to reclaim recently conceded levels.                                         

After a tumultuous decade, the airline industry finally is poised to reward investors. And Barron's believes Delta Air Lines looks like the best bet for a smooth flight.

Steel stocks have enjoyed quite a Santa Claus rally, thanks to a country that doesn't even celebrate Christmas. But China's recovering appetite isn't the only reason to take a shine to steel.

Metals and mining companies, and coal producers, have been in a slump amid recent economic worries. But this year and next could see a revival in the industries' fortunes and their shares. How to play the comeback via ETFs.

Speculators are abandoning money-losing bets that stocks with the closest links to the U.S. economy will fall as America’s most-hated shares stage the best rally in a year relative to the broader market.

Bill Ackman says he's just getting started exposing Herbalife as a pyramid scheme.

Some 88 per cent of stocks in the S&P are currently above their 50-days.  At this level, we usually see the market at least take a breather before making another big move higher.

One of Canada's most reliable economic indicators for stock-market direction is pointing to good times ahead.

________

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

Follow on Twitter: @eyeonequities

 
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