North American stock markets appear headed for modest, but cautious, gains this morning as the world braces for the outcome of the U.S. Presidential election.
Billions of campaigning dollars have been spent leading up to today's vote, which is expected to be a tight race but one that may narrowly favour incumbent Barack Obama.
The best case scenario for markets may very well be a decisive victory for either Mr. Obama or Mitt Romney. A clear win for either the Democrats or Republicans may pave the way for a speedy budget agreement in Congress that will avert the so-called fiscal cliff -- a combination of tax increases and spending cuts set that could take effect at the start of 2013. The latest polls, however, suggest more protracted bipartisan delays in Washington, with the Democrats maintaining their majority in the Senate and Republicans having majority control in the House.
A lift in European equities overnight is providing an encouraging backdrop ahead of the open here. But it's a nervous market on that side of the Atlantic given an austerity vote is set for Wednesday in Greece that will help determine whether European regulators will pass out more aid. Elsewhere overnight, Australia's central bank unexpectedly held its official interest rate steady at 3.25 per cent, saying that recent indications on the world economy were more positive.
Markets will also have no shortage of corporate earnings reports to digest today. So far, the third-quarter results haven't been much reason for celebration. Of the S&P 500 companies that have already reported, 71 per cent surpassed analysts' profit estimates, but 60 per cent missed sales projections, according to Bloomberg data.
Now, here's the rundown of what else you need to know before the trading day begins:
MARKETS:
Equities:
Futures: Dow +0.3 per cent, S&P 500 +0.3 per cent, Nasdaq +0.5 per cent
Hong Kong's Hang Seng index -0.28 per cent
Shanghai composite index -0.38 per cent
Japan's Nikkei -0.36 per cent
London's FTSE 100 +0.65 per cent
Germany's DAX +0.66 per cent
France's CAC 40 +0.77 per cent
Commodities:
WTI (Nymex Dec) +0.72 per cent at $86.27 (U.S.) a barrel
Gold (Comex Dec) +0.56 per cent at $1,692.60 (U.S.) an ounce
Copper (Comex Dec) +0.45 per cent at $3.49 (U.S.) a pound
Currencies:
Canadian dollar up 0.0030, or 0.3 per cent, at 1.0068 (U.S.)
STOCKS AND ECONOMIC INDICATORS TO WATCH:
AOL Inc. swung to a third-quarter profit of 22 cents a share from a loss of 2 cents a year ago. That beat expectations and shares are up 3 per cent in the premarket.
Yellow Media Inc., which spent the last several weeks arguing before a judge that it needs to restructure its debt if it is to survive, posted a $24-million profit in its third quarter.
Other earnings include: Brookfield Residential Properties Inc.; CCL Industries Inc.; CI Financial Corp.; Coeur d'Alene Mines Corp.; CVS Caremark Corp.; Franco-Nevada Corp.; Marathon Oil Corp.; News Corp.; NYSE Euronext Inc.; Office Depot Inc.; Paramount Resources Ltd.; Pembina Pipeline Income Fund; QLT Inc.; RioCan REIT; SunOpta Inc.; Trican Well Service Ltd.; Wajax Corp.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
The 10 best performing stocks in the S&P 500 since the last time the U.S. picked a new leader.
Berkshire Hathaway Inc.'s cash pile climbed to near-record levels in the third quarter as chairman Warren Buffett extended his search for larger acquisitions.
Over the last week, there's been a throng of people selling their Groupon stock. Here's a look at what's going on.
A strategy using ETFs to take advantage of upcoming seasonality strength.
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For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities
Darcy Keith