North American markets are unlikely to see major moves as trading gets underway this morning, as investors await for more testimony from U.S. Federal Reserve chairman Ben Bernanke and any further news on possible U.S. spending cuts set to take hold on Friday.
U.S. stock index futures are slightly positive this morning and overseas markets are generally higher. But moves are rather subdued and not enough to mark a significant retracement from Tuesday's losses, which were prompted by renewed European debt concerns after the Italian election produced a hung government.
Mr. Bernanke is speaking in front of the Financial Services Committee at 10 a.m. (ET), the second day of the Fed's semiannual report to Congress on the economy. Investors found encouragement on Tuesday in his remarks that suggested no wavering in his commitment to the central bank's $85-billion bond-buying program.
Investors continue to show little alarm over the more than $80-billion in U.S. spending cuts that are scheduled to take hold Friday unless the Republicans and Democrats agree on measures to blunt their impact. So far, there's been little in the way of formal negotiations, and it seems taking action on the spending cuts may have to wait until more broader budgetary talks later in March.
The situation is much quieter in Europe this morning, where Italian stocks are up nearly half a percentage point after dropping nearly 5 per cent on Tuesday. The euro strengthened 0.3 per cent against the U.S. dollar from a seven-week low. A bond auction in Italy today, however, clearly illustrated markets' growing concerns over how the country will pull itself out of its debt woes, with 10-year bonds being sold at an average yield of 4.83 per cent - up from 4.17 per cent at a Jan. 30 auction. European Union leaders today pressured Italy's political parties to form a united government that will work on a constructive budget.
Also in Europe this morning, Britain reported its economy contracted by 0.3 per cent in the last quarter of 2012, in line with initial estimates.
Now, here's a more detailed look at what's going on this morning and what's to come.
MARKETS:
Equities:
U.S. futures: S&P 500 +0.3 per cent; Dow +0.2 per cent; Nasdaq +0.3 per cent
Hong Kong's Hang Seng index +0.25 per cent
Shanghai composite index +0.86 per cent
Japan's Nikkei -1.27 per cent
London's FTSE 100 +0.33 per cent
Germany's DAX +0.35 per cent
France's CAC 40 +0.80 per cent
Italy's FTSE MIB +0.77 per cent
Commodities:
WTI (Nymex Apr) +0.17 per cent at $92.79 (U.S.) a barrel
Gold (Comex Apr) -0.59 per cent at $1,606.00 (U.S.) an ounce
Copper (Comex May) -0.27 per cent at $3.57 (U.S.) a pound
Currencies:
Canadian dollar down 0.0011, or 0.11 per cent, at $0.9741 (U.S.)
ECONOMIC INDICATORS TO WATCH:
The U.S. Commerce Department said durable goods orders in January fell 5.2 per cent, in line with economists' forecasts. Excluding the transportation sector, orders rose 1.9 per cent, beating forecasts.
STOCKS TO WATCH:
Target's fiscal fourth-quarter net income dipped 2 per cent, but its adjusted results apparently beat analysts' estimates and it forecast first-quarter earnings above Wall Street's view. Shares are down 2 per cent in the premarket.
First Solar Inc. late Tuesday estimated its first-quarter sales would come in below below Wall Street estimates. Shares are down 14 per cent in the premarket.
Priceline.com late Tuesday reported better-than-expected fourth-quarter earnings. Shares are up 4 per cent in the premarket.
Sears Canada said total revenue in the fourth quarter dropped to about $1.3-billion, down about $60-million from a year earlier, as same-store sales fell 3.8 per cent.
Sherritt International Corp. reported adjusted quarterly profit of 3 cents per share, missing analysts' forecasts for 11 cents.
Other earnings today include: Anheuser Busch Inbev SA; Bosch Ltd.; Dollar Tree; Groupon Ltd; Imperial Holdings Ltd.; J.C. Penney Co. Inc.; MacDonald Dettwiler and Associates Ltd.; TransAlta Corp.; Vale SA; and Woolworths Ltd.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
The head of one of Europe's major telecommunication companies says Apple is easier to deal with under CEO Tim Cook than it was during Steve Job's reign.
What to expect at Apple's shareholder meeting today.
Two technical indicators suggest reports of the bull market's imminent demise may be premature.
Strategies for bond investors in the low interest rate environment. While targeted at Americans, a lot of these tips can apply to Canadians as well.
Oddly, analysts have been reluctant to boost their price targets on Google – and there isn't even one $1,000 price target.
________
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
Darcy Keith