North American stock markets are headed for a lower open, as Tuesday's U.S. elections did little to alleviate concerns over the looming "fiscal cliff" given a still-split Congress between Republicans and Democrats. U.S. stock futures indexes are lower, and crude oil is down close to 1.5 per cent.
Markets were volatile overnight, with initial gains in Asia and Europe subsiding as the opening of North American markets neared.
While market players may be encouraged by the assurance that a Barack Obama presidential win will keep Federal Reserve stimulus policy intact, they aren't comforted by the Democrats holding onto their majority in the Senate while the Republicans continue to control the House of Representatives. This could lead to a logjam in policy making, which is particularly a concern ahead of the $600-billion of automatic tax increases and spending cuts that are scheduled to kick in at the end of this year.
U.S. energy stocks could come under pressure after the Obama win, as they could see more regulation and less access to federal lands under the re-elected administration. U.S. health-care stocks should also be actively traded; Obama's re-election means there won't be a repeal of his health-care reform law.
Meanwhile, Europe is continuing to worry market participants. The European Union today downgraded its economic forecasts, now expecting the gross domestic product of the 27-country region to contract by 0.3 per cent on an annual basis this year, rather than remaining flat as it predicted in the spring. It also said that the 17 countries that use the euro will see their GDP fall 0.4 per cent. Its previous expectation was for a 0.3 per cent contraction.
European Central Bank President Mario Draghi didn't provide much encouragement this morning either, stating that the bank expects the euro zone economy to remain weak "in the near term." He urged euro zone governments to press ahead with efforts to forge closer financial, fiscal, economic and political ties.
A main focus now is on Greece, where its parliament today is voting on austerity measures needed to keep a European bailout on track.
There are no key U.S. or Canadian economy figures out today, but there certainly are earnings reports. We detail that below under Stocks to Watch.
Now, here's the rundown of what else you need to know before the trading day begins:
MARKETS:
Equities:
Futures: Dow -0.7 per cent, S&P 500 -0.6 per cent, Nasdaq -0.6 per cent
Hong Kong's Hang Seng index +0.71 per cent
Shanghai composite index unchanged
Japan's Nikkei -0.02 per cent
London's FTSE 100 -0.15 per cent
Germany's DAX -0.21 per cent
France's CAC 40 -0.13 per cent
Commodities:
WTI (Nymex Dec) -1.47 per cent at $87.41 (U.S.) a barrel
Gold (Comex Dec) +0.13 per cent at $1,717.20 (U.S.) an ounce
Copper (Comex Dec) -0.81 per cent at $3.48 (U.S.) a pound
Currencies:
Canadian dollar down 0.0011, or 0.11 per cent, at 1.0068 (U.S.)
STOCKS TO WATCH:
Bombardier Inc. said it would delay by about six months the first flight of its C-Series jetliner and cut about 1,200 jobs in its train manufacturing division. It also reported a 6 per cent drop in revenue and said it would close a freight car plant in Aachen, Germany, and said it would record a restructuring charge of not more than $150 million in the current quarter.
WestJet profits soared almost 80 per cent in the third quarter as the Calgary-based airline got lift from revenues that were up almost 12 per cent.
Agrium Inc. reported adjusted profit of $1.34 per share, below a consensus analyst estimate of $1.76 per share. Shares are down about 7 per cent in the premarket.
Enbridge Inc. improved its third-quarter profit over the same period last year but the Calgary-based pipeline company's adjusted earnings fell just short of analyst estimates.
Time Warner said its third-quarter earnings grew 2 per cent as it reaffirmed its 2012 full-year business outlook.
Kraft Foods Group Inc. says it net income rose 13 per cent in the third quarter, as brands including Oscar Mayer and Philadelphia cream cheese drove sales and helped the company top Wall Street expectations. Shares are up just over 1 per cent in the premarket.
Macy's Inc. reported a higher-than-expected third-quarter profit, helped by sales gains, and raised its full-year profit outlook despite powerful storm Sandy disrupting the lives of shoppers.
Other earnings today include: Airboss of America Corp.; ARC Resources Ltd.; ATS Automation Tooling Systems Inc.; Bioniche Life Sciences Inc.; Boralex Inc.; Brampton Brick Ltd.; Canaccord Financial Inc.; Centerra Gold Inc.; Devon Energy Corp.; Dundee Precious Metals Inc.; Industrial Alliance Insurance and Financial Services Inc.; J.C. Penney Co. Inc.; Molson Coors Brewing Co.; Newalta Corp.; Norsat International Inc.; North American Palladium Inc.; Onex Corp.; Pacific Rubiales Energy Corp.; Pan American Silver Corp.; Peyto Exploration & Development Corp.; Saputo Inc.; Semafo Inc.; Silver Standard Resources Inc.; Sun Life Financial Inc.; and Thompson Creek Metals Co. Inc.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
Where to put your money now that Obama has won.
Equities in smaller emerging markets are soaring.
Kiss 10 per cent market returns goodbye. A growing number of experts say investors should no longer expect the double-digit returns of the past year.
A bullish case for silver and an even more bullish case for silver stocks.
Recent trends tell us absolutely nothing about how to position our portfolios for the next five years.
________
For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities
Darcy Keith