North American stock markets appear set for some solid gains at the open, with the S&P 500 poised to climb back above 1,500 after briefly peaking above that key level in Thursday's trading.
There are a number of positive factors that investors are feeling good about this morning. The U.S. corporate earnings season continues to be strong, with 75 per cent of the 142 companies in the S&P 500 index releasing results so far for the fourth quarter beating profit expectations. Economic data out of China this week continue to suggest the country has been successful is speeding up economic growth while also keeping a lid of inflation. The debt crisis in the U.S. has been kicked months down the road, and the latest data from the country - including on employment and housing - suggest the economy is picking up steam.
And concerns about the European debt crisis are receding. Today in Europe, there was more positive news, as the European Central Bank said lenders will repay more of its loans than economists had expected. The news that the banks will repay $184.3-billion (U.S.) in three-year loans next year - an indication that they are comfortable in offloading excess liquidity - helped the euro to strengthen 0.6 per cent to an 11-month high this morning. Also supportive was an unexpectedly strong rise in the ifo Institute's business-climate index for Germany, which rose to 104.2 in January from 102.4 last month.
Japan's stock market is also back on firmer ground after stumbling earlier this week on disappointment that the Japanese central bank didn't go far enough in announcing its so called "bold" new monetary stimulus measures. Overnight, the Nikkei soared 2.8 per cent as the yen dropped sharply against the U.S. dollar.
With so many bullish factors, market participants have been growing increasingly concerned about missing out on further rallies, even while being concerned about short-term pullbacks.
One negative note for Canadians though considering shopping for U.S. stocks: the loonie is weakening further against the greenback, and this morning is almost a full cent below parity as Canadian inflation data came in tamer than expected.
Now, here's a closer look at what's going on this morning and what's to come:
U.S. futures: S&P 500 +0.4 per cent; Dow +0.3 per cent; Nasdaq +0.5 per cent
Hong Kong's Hang Seng index -0.08 per cent
Shanghai composite index -0.50 per cent
Japan's Nikkei +2.88 per cent
London’s FTSE 100 +0.02 per cent
Germany’s DAX +1.13 per cent
France's CAC 40 +0.58 per cent
WTI (Nymex Mar) +0.29 per cent at $96.23 (U.S.) a barrel
Gold (Comex Feb) -0.23 per cent at $1,666.10 (U.S.) an ounce
Copper (Comex Mar) +0.24 per cent at $3.69 (U.S.) a pound
Canadian dollar down 0.0055, or 0.55 per cent, at $0.9924 (U.S.)
ECONOMIC INDICATORS TO WATCH:
Statistics Canada said the consumer price index rose at an annualized rate of 0.8 per cent in December, less than the 1.2 per cent expected by economists. Core inflation was 1.1 per cent, less than the forecast 1.4 per cent.
(1000 a.m. ET) The U.S. Commerce Department reports on new home sales in December. Economists expect 385,000 annualized sales.
STOCKS TO WATCH:
Microsoft reported late Thursday that its fiscal second quarter net income dropped 3.7 per cent, largely in line with Street estimates. Shares are down 1.4 per cent.
Starbucks Corp. late Thursday reported a 13-per-cent jump in first-quarter profit, meeting analysts' estimates, but sales in the U.S. and Asia were better than expected. Shares are up 3.1 per cent in the premarket.
Procter & Gamble's profit in its latest quarter more than doubled, and both its profit and revenues beat analysts' forecasts. The stock is up nearly 2 per cent in the premarket.
Weyerhaeuser Co, a producer of forest products, reported its highest revenue in more than four years thanks to the U.S. housing recovery. Shares are up nearly 1 per cent in the premarket.
Other earnings today include: Halliburton Co.; Honeywell International Inc.; and Kimberly-Clark Corp.
Apple shares this morning are up 0.6 per cent in the premarket, suggesting there could be some light bargain hunting today among investors.
Research In Motion Ltd. shares are up 3.6 per cent in the U.S. premarket. They rose Thursday after comments by a Lenovo Group Ltd. executive that the Chinese computer company was looking at possible acquisitions, including RIM.
Hasbro Inc. announced plans to cut 10 per cent of its workforce as the toy maker warned that consumer demand for its products was lower than anticipated over the holiday season and that its fourth-quarter revenue didn’t meet expectations. Shares are down 5 per cent in the premarket.
Software firm Open Text Corp. said late Thursday it earned $1.04 per diluted share in its latest quarter as revenues grew to record levels.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
Five years into a 10-year bet that an S&P index fund can beat hedge funds' funds-of-funds, Warren Buffett is in the lead for the first time.
The seven most important lessons arising from Apple's big dive.
Some of the biggest U.S. bond firms are pushing aggressively into equity markets.
Emerging markets are the top pick for ETF investors so far this year.
The recent rally in homebuilder stocks suggests that U.S interest rates will not remain accommodative for much longer.
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