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Premarket: Stocks set to rally as central banks ignite optimism Add to ...

Get ready for some sizeable gains at the open of North American markets this morning. A stock rally that began in Asia overnight has spread to Europe - and U.S. and Canadian stock futures are also pointing solidly higher.

There isn't any one factor that has suddenly rekindled optimism over equities, but investors are siding with the belief that stocks can continue their hearty climb this year as long as global central banks remain fully committed to keeping economies humming. While comments from Federal Reserve officials last week ignited worries about the tapering off of its bond-buying program, today there were signals that the extraordinary stimulus measures seen all over the globe won't be shut off anytime soon.

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European Central Bank Executive Board member Peter Praet said in a newspaper column today that the ECB could still cut interest rates further to stimulate the economy if needed, and another board member stated that the central bank would stick to its expansive monetary policy for as long as necessary.

Japanese stocks, one of the most volatile markets in the world over the past week, marked some modest gains overnight as the yen resumed its weakening trend against the U.S. dollar. That move was ignited after an adviser to Japanese Prime Minister Shinzo Abe said that the central bank should loosen monetary policy further if needed.   

With U.S. traders back from the Memorial Day holiday, markets will see more liquidity today and expectations are high that U.S. consumer confidence data later this morning will deliver some good news. It's forecast to rise to its highest level since last fall.

Now, here's the rundown of what else is happening this morning and what's to come.

MARKETS:

Equities:

Futures: S&P Toronto +0.58 per cent; S&P 500 +0.83 per cent; Dow +0.75 per cent; Nasdaq +0.93 per cent

Hong Kong's Hang Seng +1.05 per cent

Shanghai composite index +1.22 per cent

Japan's Nikkei +1.20 per cent

London’s FTSE 100 +1.63 per cent

Germany’s DAX +1.02 per cent

France's CAC 40 +1.45 per cent

Italy's FTSE MIB +1.71 per cent

Commodities:

WTI crude oil (Nymex Jly) +0.45 per cent at $94.67 (U.S.) a barrel

Gold (Comex Aug) -0.85 per cent at $1,380.90 (U.S.) an ounce

Copper (Comex July) +0.39 per cent at $3.32 (U.S.) a pound

Currencies:

Canadian dollar down 0.0002, or 0.02 per cent, at $0.9673 (U.S.)

ECONOMIC INDICATORS TO WATCH:

The S&P/Case-Shiller home price index for 20 U.S. cities rose 1.1 per cent in March, beating forecasts for 1 per cent. Year-over-year, they rose 10.9 per cent,  the strongest annual rise in seven years.

(10 a.m. ET) U.S. Conference Board reports on consumer confidence for May, which is forecast to rise to 71.5 from April's 68.1.

STOCKS TO WATCH

Bank of Nova Scotia reported adjusted earnings of $1.24 per share in its latest quarter, up 10 per cent from a year ago but two cents below a consensus estimate. It said it was on track to meet its 2013 targets.

Tiffany & Co.   reported higher-than-expected sales for the first quarter that included Valentine’s Day. Shares are up 6 per cent in the premarket.

Other earnings today include: Canadian Solar Inc. and Velan Inc.

THIS MORNING'S TOP INVESTING READS ON THE WEB:

Bond options for the socially responsible.

Citigroup believes Japanese stocks are a bargain after last week's big plunge.

The four most influential technology companies in the U.S. are each planning massive and pricey new headquarters. It may be a signal that they've reached a high point in their fortunes.

If you only know five things about investing, make it these.

Markets today show every indication of being bull markets rather than bubbles.

Barron's thinks Hertz Global Holdings is poised to rise 70 per cent in the next year or two.

-----

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.

 
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