North American stock markets appear set for a mildly stronger start this morning amid signs of progress at last in the negotiations aimed at averting the U.S. "fiscal cliff."
The Wall Street Journal is reporting that the talks to ease the burden of tax hikes and spending increases set to take hold at the start of next year have been making steady progress in recent days. While big differences remain, the Journal quoted unnamed sources in both the Republican and Democratic camps as saying there has been a significant shift and more "serious" behind closed doors discussions are under way.
U.S. monetary policy will also be in focus over the next two days as the Federal Reserve holds its monthly meeting. Chairman Ben Bernanke, at the conclusion of the get together on Wednesday, is widely expected to announce a further $45-billion in monthly Treasury buying. The Fed has promised to continue that open-ended method of boosting economic growth until there is substantial improvement in employment levels.
Markets also received some welcome news this morning out of Europe, where German investor confidence unexpectedly rose in December. The ZEW Centre for European Economic Research said its index of investor and analyst expectations rose to 6.9 from minus 15.7 in November. The index aims to forecast economic conditions six months in advance, and economists were expecting a reading more like minus 11.5.
Now, here's a look at what else you need to know this morning.
MARKETS:
Equities:
U.S. futures: S&P 500 +0.2 per cent; DJIA +0.2 per cent; Nasdaq +0.2 per cent
Hong Kong's Hang Seng index +0.21 per cent
Shanghai composite index -0.42 per cent
Japan's Nikkei -0.09 per cent
London's FTSE 100 +0.24 per cent
Germany's DAX +0.73 per cent
France's CAC 40 +0.84 per cent
Commodities:
WTI (Nymex Jan) +0.50 per cent at $85.99 (U.S.) a barrel
Gold (Comex Feb) -0.16 per cent at $1,711.70 (U.S.) an ounce
Copper (Comex Mar) -0.12 per cent at $3.70 (U.S.) a pound
Currencies:
Canadian dollar up 0.0001, or 0.01 per cent, at 1.0140 (U.S.)
STOCKS AND ECONOMIC INDICATORS TO WATCH:
Statistics Canada reported a trade deficit of $169-million in October as exports rose 1.0 per cent and imports fell 1.2 per cent. The report surprised economists, who had expected a deficit of $1.2-billion.
The U.S. Commerce Department reported a trade deficit of $42.24-billion (U.S.) in October, close to forecasts of $42.7-billion, and widening from a deficit of $40.3-billion in September.
Shares in American International Group Inc. are up 1.3 per cent in the premarket at $33.76 after the U.S. government announced this morning it will sell all of its remaining 234.2 million shares at $32.50 per share. That should raise about $7.6-billion (U.S.).
Hudson's Bay Co. shares will be in play after reporting a $2-million third-quarter loss from continuing operations on Tuesday as it initiated a quarterly dividend.
Delta Air Lines shares are up 1.5 per cent in the premarket after announcing it will acquire Singapore Airline's Virgin Atlantic stake for $360-million (U.S.).
Earnings today include Dollar General Corp.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
While dozens of companies are paying special one-time dividends ahead of a potential jump in taxes, Apple probably won't join in partly because so much of its $121.3-billion (U.S.) in cash is held overseas
It's that time of year when everyone makes their S&P forecasts for next year. The end result is fairly worthless, if not for the entertainment value of it all.
The 30 best performing stocks in the S&P 500 since the bull market began on March 9th, 2009. If any stocks are ripe for capital gains selling, these are the ones.
Investors have fallen so far out of love with stocks that assets in fixed income hedge funds are poised to overtake those in equity trading strategies for the first time in the history of the $2tn industry.
Three lessons on better investing from a star fund manager.
Wall Street's five worst trades of 2012.
The vast majority of takeovers inked in the past few years in Canada would have received the green light even under Ottawa's new restrictions.
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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
Darcy Keith