Stocks appear set for a much more upbeat day of trading today after a gloomy session on Friday, when a surprisingly weak reading on U.S. employment had market players worried about slowing growth rates in the global economy.
U.S. stock futures, along with the largest European markets, are modestly higher this morning, and major commodities are also strong. That all should add up to gains in the TSX as trading gets underway.
There's little U.S. economic data to drive markets today; instead, U.S. corporate earnings will be a primary focus, as Alcoa Inc. kicks off the first-quarter reporting season with its results after North American markets close. Analysts expect the aluminum maker to post a profit of 8 cents a share, down from 10 cents a year ago, and sales are forecast to fall 1.6 per cent.
That slowdown in earnings is expected to set the pace for the entire first-quarter earnings season. Analysts' growth forecasts for the quarter are the most negative in years, with S&P 50 companies expected to see a 1.8 per cent decrease in earnings, according to Bloomberg. That would be the first year-over-year drop in profit since 2009.
The positive tone in European markets this morning was partly supported by a report showing a rebound in German industrial production in February. That provided some relief after disappointing reports last week on euro zone services output and retail sales. The stock market in Portugal was an exception - it fell today after a high court there struck down some of the nation's austerity measures. Greek stocks also were under pressure after its government halted merger plans by National Bank of Greece SA and Eurobank Ergasias SA.
Asian markets were rather subdued overnight, except for Japan, which continued to see a rally thanks to unprecedented stimulus measures revealed by its central bank last week. The yen weakened again overnight and fell through the 99 per U.S. dollar level for the first time in four years.
While copper has been performing dismally of late, today is an exception, with prices for the metal up more than 1 per cent after miners in Chile said they will hold a nationwide strike.
Now, there's a closer look at what's going on this morning.
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 -0.04 per cent
Shanghai composite index -0.60 per cent
Japan's Nikkei +2.80 per cent
London’s FTSE 100 +0.26 per cent
Germany’s DAX +0.33 per cent
France's CAC 40 +0.72 per cent
Italy's FTSE MIB +0.57 per cent
WTI (Nymex May) +0.90 per cent at $93.53 (U.S.) a barrel
Gold (Comex Jun) +0.07 per cent at $1,577.20 (U.S.) an ounce
Copper (Comex May) +1.24 per cent at $3.39 (U.S.) a pound
Canadian dollar up 0.0007, or 0.07 per cent, at $0.9836 (U.S.)
STOCKS TO WATCH
Alcoa to report first-quarter earnings after markets close.
General Electric has agreed to buy Lufkin Industries for $3.38-billion in cash, or $88.50 a share. Lufkin shares are up 37 per cent to $87.98 in the premarket.
ECONOMIC INDICATORS TO WATCH:
(10:30 a.m. ET) The Bank of Canada publishes its Business Outlook and Senior Loan Officer surveys for the first quarter.
STOCKS TO WATCH:
Alcoa Inc. to report first-quarter earnings.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
Ottawa to probe RBC job outsourcing
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Beyond the windfall: The art of making an inheritance last
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