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Premarket: Stocks set to tack on more gains Add to ...

Markets are poised to open with modest gains, with traders taking an optimistic view that Europe will be able to dig itself out of its debt crisis. It would be the second day in a row major indexes have advanced.

Reuters quoted European officials this morning as saying that Spain is ready to request a euro zone bailout for its public finances as early as next weekend. Most believe that action would be positive for markets, as it would trigger European Central Bank buying of Spain's bonds and help recharge the sagging European economy.

However, as is often the case in Europe, there's a but. Germany is signalling it wants Spain to hold off on a bailout, with Chancellor Angela Merkel not anxious to present another euro zone bailout to an acrimonious parliament.

The precarious state of economic conditions in Spain was on full display this morning. The country's jobless rate rose further in September as its services sector layoffs accelerated at the end of a busy summer tourist season, suggesting one in four of the country’s workforce is now unemployed.

Meanwhile, the Reserve Bank of Australia surprised markets overnight, cutting its key lending rate amid weakening demand for its exports.

Here in North America, auto sales will be monitored for signals that consumers are spending more aggressively on goods. Other than that, it's a quiet day in terms of economic data.

Now, here's the rundown of what else you need to know before the trading day gets underway:

MARKETS:

Equities:
Futures: Dow +0.44 per cent, S&P 500 +0.60 per cent, Nasdaq +0.53 per cent

Hong Kong's Hang Seng index +0.37 per cent

Shanghai Composite index +1.44 per cent

Japan’s Nikkei -0.12 per cent

London’s FTSE 100 +0.27 per cent

France’s CAC 40 +0.35 per cent

Germany’s DAX index +0.56 per cent

Commodities:
WTI (Nymex Nov) +0.18 per cent at $92.65 (U.S.) a barrel

Gold (Comex Dec) -0.12 per cent at $1,781.20 (U.S.) an ounce

Copper (Comex Dec) +0.25 per cent at $3.80 (U.S.) a pound

Currencies:
Canadian dollar down 0.0008, or 0.08 per cent, at $1.0174 (U.S.)

STOCKS AND ECONOMIC INDICATORS TO WATCH:

Monthly sales are released by the major auto makers.

U.S. bank stocks could rise after Credit Suisse upgraded them to "overweight" from "benchmark," believing that loan growth and asset quality will "surprise on the upside."

J.P. Morgan Chase & CO. could come under pressure though after the New York Attorney General late Monday filed a lawsuit against the bank, alleging widespread fraud in the sale of mortgage-backed securities.

PetSmart Inc. is rising in the premarket after S&P said late Monday that the pet retailer will replace Sunoco Inc. in the S&P 500.      

Consulting firm Interbrand said Research In Motion's BlackBerry has lost a staggering 39 per cent of its brand value and has fallen to No. 93 on the global list of the 100 most valuable brands, from No. 56. RIM shares are unchanged in the premarket.    

Earnings include Mosaic Co.                   

THIS MORNING'S TOP INVESTING READS ON THE WEB:

An interesting argument on why you shouldn't be scared to purchase individual junk bonds, something most advisers would suggest is too risky for retail investors.

Google's market cap passed Microsoft’s in early trading on Monday, making the search engine giant the second most valuable technology company in the world behind Apple.

David Bianco, the chief U.S. equity strategist at Deutsche Bank, believes the third-quarter earnings season will be one of the most disappointing earnings season since the economic recovery began.

The risks of a big sell-off are higher now that we're in the fourth quarter. Selectivity in buying stocks will be more important than ever.

The market is pricing in a rally in natural gas prices in December and January, based on the futures curve.

The top-performing commodity in the third quarter? Silver.

Social media stocks that might be ready for a bounce after a recent sell-off.

Your attitude toward the stock market in October, and whether or not you decide that it’s time to take money off the table, is dependent at least in part on who you think will win the upcoming election.

Where we are in the volatility cycle.

Why the day of the month really does matter when it comes to seasonality trades.

Follow on Twitter: @eyeonequities

 
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