(Updated with the morning's economic data and breaking corporate news)
North American stock markets are set to break their nearly week-long slump this morning, as bargain hunters are making a more prominent appearance.
The S&P 500 hit a one-month low on Wednesday, with Alcoa's weaker outlook on global aluminum demand keeping traders in a grumpy mood. Standard & Poor's kept the sour feelings going into the post market, when it downgraded Spain's sovereign credit rating two notches to just above junk status, citing the deepening economic recession.
But today, there are feelings the selloff may be overdone. That certainly is the view of Citigroup this morning, which upgraded U.S. equities to "overweight" due to "the combination of strong earnings-per-share momentum and a very aggressive central bank." Citi sees the S&P 500 gaining 12 per cent by the end of next year. They also forecast a 9 per cent rally in the MSCI AC world index by that time, too, suggesting the TSX will come along for the ride.
U.S. futures are firmly in positive territory and added to earlier gains after a batch of economic data at 830 a.m. (ET), including an unexpected drop in U.S. jobless claims last week to more than a four-year low. That added credibility to last week's non-farm payrolls report that surprisingly saw the unemployment rate drop below 8 per cent.
Canada released figures showing a smaller-than-expected trade deficit for August, which helped lift the loonie. It's now up nearly half a cent versus the U.S. currency.
Major commodities are pointing upwards this morning, too, which should add some extra support to the TSX.
Now, here's the rundown of what else you need to know before the trading day gets underway:
Futures: Dow +0.4 per cent, S&P 500 +0.5 per cent, Nasdaq +0.6 per cent
Hong Kong's Hang Seng index +0.38 per cent
Shanghai composite index -0.80 per cent
Japan’s Nikkei -0.57 per cent
London’s FTSE 100 +0.85 per cent
France’s CAC 40 +0.84 per cent
Germany’s DAX index +0.97 per cent
WTI (Nymex Nov) +1.44 per cent at $92.54 (U.S.) a barrel
Gold (Comex Dec) +0.22 per cent at $1,768.90 (U.S.) an ounce
Copper (Comex Dec) +1.05 per cent at $3.76 (U.S.) a pound
Canadian dollar up 0.0044, or 0.45 per cent, at $1.0225 (U.S.)
STOCKS AND ECONOMIC INDICATORS TO WATCH:
Statistics Canada said the trade deficit was $1.32-billion in August, smaller than the deficit of $1.9-billion projected by economists.
Statscan said August new house prices rose 2.4 per cent from a year earlier and 0.2 per cent from July. That was in line with Street forecasts.
The U.S. Commerce Department said the trade deficit widened in August to $44.2-billion (U.S.), a 4.1 per cent rise from July and the biggest gap since May. It was just slightly bigger than economists projected.
U.S. new jobless claims for last week dropped unexpectedly to 339,000, improving from the previous week's 367,000. Economists had expected 370,000.
Sprint Nextel shares are up about 16 per cent in premarket trade after Reuters quoted a source saying Japan's Softbank is in talks to acquire a majority stake in the No. 3 wireless carrier in the United States.
Alaska Airlines will buy 50 Boeing 737 single-aisle jetliners under a $5 billion deal, the largest purchase in the carrier’s history.
Earnings out today include Cargill Inc., NovaGold Resources Inc., Safeway Inc. and Winnebago Industries Inc.
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