(Updated with the latest market data)
Despite two days of steep declines, stock markets aren't showing much sign of snapping back. U.S. equity index futures are lower this morning and economically sensitive commodities like crude oil and copper are also on the decline. It should add up to a negative start for the TSX as the last day of trading this week gets under way.
It hasn't been an uplifting week for investors. The reelection of President Barack Obama and a divided Congress turned the focus to the "fiscal cliff" -- the combination of more than $600-billion in tax increases and spending cuts scheduled to kick in Jan. 1 unless Washington can reach a deficit-reduction agreement. Most agree that failure to reach a deal will plunge the U.S. economy back into recession, surely sending stocks into a freefall.
Most likely, the fiscal cliff will be averted, but the political wrangling that may be involved could set the market up for more volatility and act as yet another distraction for getting the U.S. economy back to faster growth. Mr. Obama is likely to discuss the issue at a speech scheduled for 105 p.m. (ET) today.
China overnight released several reports suggesting the economy there is picking up its pace. Industrial production rose 9.6 per cent in October from a year earlier, a little better than most economists had been expecting. Retail sales climbed 14.5 per cent last month from a year earlier, also slightly exceeding forecasts. There was also a further dip in the inflation rate.
Still, markets are being cautious in reacting to the data. Even copper, demand for which is linked quite closely to the Chinese economy, is down over 1 per cent this morning.
Europe, meanwhile, remains a focus. On Sunday, a parliamentary vote will take place in Greece on the country's 2013 budget, and euro zone finance ministers are meeting Monday. It's unclear whether they will move to allow the release of the $40-billion in aid for Greece. At least one official has hinted a decision won't be made until late November.
Now, here's the rundown of what else you need to know before the trading day begins:
Futures: Dow -0.7 per cent, S&P 500 -0.7 per cent, Nasdaq -0.4 per cent
Hong Kong's Hang Seng index -0.85 per cent
Shanghai composite index -0.12 per cent
Japan’s Nikkei -0.90 per cent
London’s FTSE 100 -0.92 per cent
Germany’s DAX -1.64 per cent
France's CAC 40 -0.76 per cent
WTI (Nymex Dec) -0.96 per cent at $84.26 (U.S.) a barrel
Gold (Comex Dec) +0.34 per cent at $1,731.80 (U.S.) an ounce
Copper (Comex Dec) -1.57 per cent at $3.42 (U.S.) a pound
Canadian dollar up 0.0015, or 0.15 per cent, at 0.9979 (U.S.)
STOCKS AND ECONOMIC INDICATORS TO WATCH:
(0955 a.m. ET) Reuters/University of Michigan consumer sentiment index for November released. Economists expect a reading of 83.3, up from the final October reading of 82.6.
Telus Corp. boosted its quarterly dividend after reporting a third-quarter profit that rose 7.7 per cent from a year ago to $351-million.
TMX Group Ltd. issued its first financial report since undergoing a strategic reorganization. Earnings were $15.3-million in the most recent quarter. It also announced plans to eliminate 100 positions over the next 12 months.
Rona's CEO, Robert Dutton, is stepping down.
Groupon Inc. shares are down 23 per cent in the premarket after its quarterly earnings once again fell short of Wall Street's already-cautious expectations. It's also cutting jobs.
Walt Disney Co. shares could come under pressure after its quarterly revenues missed expectations, although net income matched analysts' forecasts.
Kayak Software Corp. shares in the premarket are up 25 per cent after Priceline.com announced a deal late Thursday to acquire the company.
J.C. Penny Co. narrowed losses in its fiscal third-quarter but not as much as the Street was hoping for.
Other earnings out today include: Brookfield Asset Management Inc.; Canadian REIT; Emera Inc.; Enerplus Corp.; GMP Capital Inc.; Héroux-Devtek Inc.; Ivanhoe Energy Inc.; and Stella-Jones Inc.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
Why market-beating strategies don't last.
As if investors don’t have enough to worry about with the fiscal cliff, scary technical indicators for U.S. stocks are coming out of the closet.
Earnings projections for the S&P 500 are still coming down.
An illustrated version of what Icahn sees in Netflix.
In a possible sign of Chinese economic weakness, copper inventories are climbing in the country.
A chart is making the rounds that suggests a U.S. recession is imminent. Here's why you need to take it with a grain of salt.
For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities,