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Inside the Market

Premarket: Japan stocks sink; U.S. futures edge lower Add to ...

Japanese stocks tumbled overnight but other major overseas markets are only seeing mild losses today, as investors absorb an onslaught of U.S. bank earnings and economic reports.

So far, it appears the TSX is in store for a slightly negative start, but again today the major North American indexes may only see modest moves.

More Related to this Story

It's a big day for quarterly earnings from the U.S. financial sector. Two Wall Street behemoths have already reported - J.P.Morgan Chase & Co. and Goldman Sachs. Both companies easily surpassed earnings expectations, but only Goldman impressed the Street with its revenues. (See our stocks to watch section below for more details.)

Japan's Nikkei overnight fell 2.5 per cent on profit-taking; it had hit its highest level since April 30, 2010 earlier this week. A slide in the U.S. dollar against the yen ignited some of the selling pressure.

The selling momentum from Asia spilled over into Europe, where markets were also a bit spooked by comments from Luxembourg Prime Minister Jean-Claude Juncker. The outgoing chairman of the Eurogroup was quoted as saying that the euro is "dangerously high," which underlined concerns about the region's growth prospects and currency tensions.

The World Bank also is putting a damper on traders' moods this morning. The Washington-based bank sliced its global economic forecast late Tuesday to 2.4 per cent this year, down from a June forecast of 3 per cent, concerned with austerity measures, high unemployment and low business confidence across the globe.

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 -0.4 per cent; Nasdaq +0.1 per cent

Hong Kong's Hang Seng index -0.10 per cent

Shanghai composite index -0.72 per cent

Japan's Nikkei -2.57 per cent

London’s FTSE 100 -0.46 per cent

Germany’s DAX -0.31 per cent

France's CAC 40 -0.20 per cent

Commodities:

WTI (Nymex Mar) +0.28 per cent at $93.98 (U.S.) a barrel

Gold (Comex Feb) -0.28 per cent at $1,679.00 (U.S.) an ounce

Copper (Comex Mar) -0.55 per cent at $3.62 (U.S.) a pound

Currencies:

Canadian dollar down 0.0014, or 0.14 per cent, at $1.0144 (U.S.)

ECONOMIC INDICATORS TO WATCH:

The U.S. Commerce Department said the consumer price index in December was unchanged from the previous month, in line with expectations. Excluding food and energy, CPI rose 0.1 per cent.

The U.S. Federal Reserve Board said industrial production rose 0.3 per cent in December, near consensus forecasts. Capacity utilization rose 0.1% to 78.8 per cent, higher than the forecast 78.5 per cent.

(1000 a.m. ET) U.S. releases housing market index for January. It's expected to rise 1 point to 48.

(200 p.m. ET) U.S. releases Beige Book, providing a reading on U.S. economic conditions.

STOCKS TO WATCH:

Boeing shares are down 4.5 per cent in the premarket after Japan's two leading airlines grounded their fleets of Boeing 787s today after yet another emergency landing of the Dreamliner.

Apple shares are up nearly 1 per cent in the premarket, a day after closing below key support at $500 (U.S.). Shares in Research In Motion Ltd. are also up about 1 per cent in the premarket.

J.P.Morgan Chase & Co. shares are down 1.6 per cent after the bank beat Street estimates by reporting quarterly earnings per share of $1.39, a whopping 23 cents better than the average analyst projection. But its revenue of $24.4-billion slightly missed estimates, and its shares are off 0.7 per cent in the premarket.

Goldman Sachs reported earnings of $5.60 a share in the fourth quarter, surpassing the average analyst forecast of $3.71. Revenues were $9.24-billion, beating the Street view of $7.97-billion. Shares are up 2.7 per cent in premarket trading.

U.S. Bancorp reported earnings per share of 72 cents, two cents better than expectations. Revenues missed Street views and shares are down 0.8 per cent in the premarket.

Wendy’s Co.’s fiscal fourth-quarter earnings topped Wall Street’s view, but a rise in revenue came in below expectations as a key indicator of sales at North American restaurants dipped slightly. Shares are up 5 per cent in the premarket.

Other earnings out today include Bank of New York Mellon Corp. and Ebay Inc.

Magna International Inc. boosted its sales forecast for 2013 to between $31.3-billion (U.S.) and $32.7-billion, compared with a forecast made in November of $30.3-billion to $31.2-billion.

THIS MORNING'S TOP INVESTING READS ON THE WEB:

Facebook has lost 1.4 million active users in the United States, according to new data.

Goldman Sachs doubts the current earnings season will spur a rally in stocks.

Investor appetite for risk has risen to a nine-year high.

Apple is at risk of losing the crown of the world's biggest company by capitalization. Meanwhile, the stock is now 32 per cent below the average Street price target.

Four key Apple charts to watch.

Market correlations are starting to pick up again - and that's a bearish sign.

For Canadian investors, the importance of Europe’s continuing economic meltdown varies widely by sector, with significant implications for two of the biggest in the S&P/TSX – banks and energy.

________

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

 

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