(Updated with the latest economic data and earnings reports this morning.)
After a disappointing Thursday in North American stock markets that saw earlier gains mostly evaporate by day's end, today is off to a positive start. That said, investors still appear reluctant to pour significant money into equities at a time of continued macroeconomic worries, with U.S. futures only mildly positive.
JPMorgan Chase kicked off the earnings season for the big U.S. banks by beating expectations both for profits and revenues. The bank said it made $5.7-billion (U.S.) in the July-to-September period, shooting up 34 per cent from the same period a year ago. Earnings were $1.40 per share, well exceeding the $1.21 predicted by analysts polled by FactSet. Revenue rose 6 per cent to $25.1-billion. CEO Jamie Dimon noted that "the housing market has turned the corner." Despite this, shares are largely unchanged in the premarket, as investors focused in on a significant increase in problem loans during the quarter.
Wells Fargo shortly after reported its quarterly earnings of 88 cents a share excluding items, an increase from 72 cents a year earlier and a penny better than forecasts. Shares are down nearly 3 per cent in the premarket, however, as revenues of $21.2-billion were a little shy of the $21.4-billion forecast by analysts.
Meanwhile, investors are taking stronger-than-expected industrial production figures released overnight for the euro zone with a grain of salt. Output in the 17 nations sharing the euro rose 0.6 per cent in August from July, beating expectations for 0.4 per cent. But summer readings are often volatile given vacations and plant shutdowns, and economists will have to wait for the September reading for a more accurate snapshot.
Crude oil is up slightly after the International Energy Agency predicted a further decline in oil consumption and warned of lower oil prices over the next five years. The IEA cut its global oil demand growth projection for 2011-2016 by 500,000 barrels per day compared to its previous report.
This weekend, by the way, will have some interesting data on offer out of China that will shed more light on its slowing economy. The country will release its latest trade figures, which will be followed over the next few days by third-quarter growth and September inflation and industrial output data.
Now, here's the rundown of what else you need to know before the trading day gets underway:
Futures: Dow +0.3 per cent, S&P 500 +0.4 per cent, Nasdaq +0.3 per cent
Hong Kong's Hang Seng index +0.65 per cent
Shanghai composite index +0.10 per cent
Japan’s Nikkei -0.15 per cent
London’s FTSE 100 -0.13 per cent
France’s CAC 40 -0.02 per cent
Germany’s DAX index -0.04 per cent
WTI (Nymex Nov) +0.08 per cent at $92.57 (U.S.) a barrel
Gold (Comex Dec) -0.08 per cent at $1,769.10 (U.S.) an ounce
Copper (Comex Dec) -0.77 per cent at $3.72 (U.S.) a pound
Canadian dollar up 0.0017, or 0.16 per cent, at $1.0236 (U.S.)
STOCKS AND ECONOMIC INDICATORS TO WATCH:
The U.S. reported its producer price index for September rose 1.1 per cent, higher than economists' forecasts for a monthly rise of 0.8 per cent.
(0955 a.m. ET) The Reuter's/University of Michigan's consumer sentiment index for October is released. Economists expect a reading of 78.3.
Advanced Micro Devices cut its quarterly sales forecast late Thursday, expecting a fall of 10 per cent from the second quarter instead of earlier guidance for a drop of about 1 per cent. Shares are down 6 per cent in the premarket.
Ecolab is buying private firm Champion Tech for $2.2-million.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
Bullish sentiment among U.S. individual investors has now declined for three weeks in a row.
Dividend Reinvestment Plans at discount brokers are aimed at saving money on trading commissions. While DRiPs are usually a good thing, investors need to pay attention to the hidden costs they are incurring when certain brokers double dip on currency conversions.
An interesting chart that shows how the weekly U.S. initial jobless claims reading has done a pretty good job mirroring the movement in the U.S. stock market since the bull market began in 2009. With the inverse of the claims reading making a new bull market high this week, it raises the question of whether the S&P 500 will now follow.
How a mix of investments generated the best returns over the past several years, not a bet on either stocks or bonds.
One hedge fund's big bet on Realogy before its IPO paid off handsomely.
In spite of improved hedge fund performance during the third quarter, hedge funds with a macro strategy focus continued to struggle. The reason: they stink at market timing.