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Premarket: Loonie hits 1-year high, equities softer Add to ...

North American stocks are headed for a slightly weaker opening this morning, as markets feel vulnerable to a pullback after last week's rise in U.S. stocks to multi-year highs.

The issue: the rally in stock markets last week was more a reaction to expected government stimulus measures, rather than actual signs of improvement in the global economy.

Friday's bleak U.S. jobs data illustrated the painfully slow economic recovery, but raised bets that the U.S. Federal Reserve will unleash a third round of quantitative easing this Thursday as it releases its monetary policy statement.

Overnight, there was some lackluster Chinese economic data that sparked more predictions that China will undertake stimulus measures of their own. There were weak readings on industrial production, fixed-asset investment and wholesale prices, as well as a wider-than-expected August trade surplus due to declining exports.

Meanwhile, the focus in Europe this week will be on a ruling Wednesday by Germany’s Constitutional Court on a challenge to the country's participation in the European Stability Mechanism, the euro zone’s permanent rescue fund.

One bright spot for Canadian investors is that their purchasing power for picking up U.S. stocks just keeps getting better, with the Canadian dollar rising this morning to a one-year high of 1.0241.

Here's the run down of what else you need to know as the investing day gets underway.

MARKETS:

Equities:
Futures: Dow -0.1 per cent, S&P 500 -0.2 per cent, Nasdaq -0.2 per cent

Hong Kong's Hang Seng index +0.13 per cent

Shanghai Shenzhen CSI 300 +0.50 per cent

Japan’s Nikkei -0.03 per cent

London’s FTSE 100 0.00 per cent

France’s CAC 40 -0.13 per cent

Germany’s DAX index +0.04 per cent

Commodities:
WTI (Nymex Oct) 0.0 per cent at $96.00 (U.S.) a barrel

Gold (Comex Dec) -0.27 per cent at $1,736 (U.S.) an ounce

Copper (Comex Dec) +1.1 per cent at $3.69 (U.S.) a pound

Currencies:
Canadian dollar up  0.0020, or 0.2 per cent, at 1.0238 (U.S.)

STOCKS AND ECONOMIC INDICATORS TO WATCH:

Talisman Energy said chief executive officer John Manzoni has stepped down, effective immediately, and will be replaced by former TransCanada top boss Hal Kvisle.

AIG said Sunday that the Treasury Department launched an offering of a further $18-billion of its holdings in AIG common stock. Shares in pre-market trade are down 1 per cent.

THIS MORNING'S TOP READS ON THE WEB:

Money market traders now expect the Federal Reserve to keep borrowing costs at record lows for about three more years as the economic outlook worsens, according to bond market measures from overnight index swaps.

Four out of 5 fundamental market indicators that are moving in the right direction.

Yields on "junk"-rated corporate bonds have reached their lowest point on record, according to Barclays.

Gold (priced in Swiss Francs) is challenging all-time record high prices.

Manchester United shares are below their IPO price. Can sports and stock markets mix?

Vanguard last week announced five new ETFs in Canada. What the Canadian Couch Potato blog thinks of them.

15 investment lessons learned playing fantasy football.

Market participants beginning to price in materially higher longer term inflation.

Dividend income is the hidden value in beaten-down European stocks.

Why investment ratings and rankings always will be inherently flawed.

Hedge funds wrapped up another lackluster month in August by substantially underperforming the stock market, and investors are showing signs that their patience is wearing thin.

Follow on Twitter: @eyeonequities

 

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