U.S. stock futures and European equity markets are a bit softer this morning, as traders monitored the latest developments out of Cyprus and braced for a barrage of U.S. data.
The European Central Bank today set a Monday deadline for Cyprus to agree to a bailout plan. If it fails to do so, funding could be cut off to the country's cash-strapped banks, resulting in a financial meltdown that would create further economic upheaval in the euro zone.
The Cyprus government on Tuesday voted against a levy on bank deposits that was part of an earlier bailout plan. Cyprus's president is now working on a new plan to obtain the European bailout, and there are reports Cyprus politicians have agreed to set up an investment fund to do so.
Fresh data out of Europe overnight weren't lifting any spirits. The Markit preliminary composite purchasing-managers' index for the euro zone dropped to 46.5 in March from 47.9 in February (A level below 50 indicates a contraction in activity). Many had expected March's number to be higher than February; instead, the latest report suggests the downturn may be intensifying.
And while Germany has been a bright spot among European economies - relatively speaking - a separate purchasing managers' index for that country's manufacturing industry unexpectedly fell to 48.9 this month from 50.3 in February.
More upbeat was China's latest manufacturing purchasing managers' index. It rose to 51.7 in March from 50.4 in February, suggesting the sector in that country is expanding at a healthy clip. That news helped Chinese stocks rise modestly overnight.
But the key to trading in North America today may very well be how U.S. economic data, which includes jobless claims, home sales and manufacturing, come in. The Dow hit a fresh record intraday high on Wednesday, and the S&P 500 is only 6 points short of its record high closing. A further push upward may very well need a bit of encouragement from data showing the world's biggest economy continues to be on the mend.
Now, here's a closer look at what else is going on this morning and what's to come.
MARKETS:
Equities:
U.S. futures: S&P 500 + 0.1 per cent; Dow +0.1 per cent; Nasdaq -0.1 per cent
Hong Kong's Hang Seng index -0.14 per cent
Shanghai composite index +0.29 per cent
Japan's Nikkei +1.35 per cent
London's FTSE 100 -0.76 per cent
Germany's DAX -0.79 per cent
France's CAC 40 -1.14 per cent
Italy's FTSE MIB -0.20 per cent
Commodities:
WTI (Nymex May) -0.53 per cent at $93.00 (U.S.) a barrel
Gold (Comex Apr) -0.02 per cent at $1,607.20 (U.S.) an ounce
Copper (Comex May) +0.19 per cent at $3.45 (U.S.) a pound
Currencies:
Canadian dollar up 0.0035, or 0.36 per cent, at $0.9781 (U.S.)
ECONOMIC INDICATORS TO WATCH:
Statistics Canada said retail sales rose 1 per cent in January from December, slightly better than the 0.9 per cent rise economists had forecast.
U.S. initial jobless claims last week rose 2,000 to 336,000, up modestly from the 332,000 the previous week, but below the 340,000 that was forecast.
(858 a.m. ET) U.S. releases the final reading of the PMI manufacturing index for March, forecast to come in at 55.0.
(10 a.m. ET) The U.S. National Association of Realtors reports on existing home sales in February. Economists expect 5 million annualized sales.
(10 a.m. ET) U.S. releases the Philadelphia Fed Survey and its general business conditions index, forecast to come in at negative 1.5.
STOCKS TO WATCH:
Lululemon Athletica Inc. reported quarterly profit of 75 cents a share, beating analysts' estimates by 1 cent. Revenue rose to $485.5-million from $371.5-million, also a little above analysts' expectations of $482.9 million. Shares are up nearly 1 per cent in the premarket.
Research In Motion Ltd. said the BlackBerry 10 now offers more than 100,000 apps. Shares are up 0.5 per cent in the premarket after rallying 7 per cent on Wednesday.
Oracle Corp. shares are down 7 per cent in the premarket after the software maker reported much worse-than-expected revenues in its third quarter.
Other earnings today include: Athabasca Oil Corp.; Nike Inc.; Semafo Inc.; and Silver Wheaton Corp.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
Why investors would be better focusing on Norway, and not Cyprus.
What the charts say is ahead for Chinese equities.
When money is scared and wants to come out of risk assets, what is the safest place? Oddly, lately it's been the Japanese yen.
Where to look for the best returns right now in emerging markets.
Another reason to diversify into the U.S. market. Health care, a sector that there is little of in Canada, has been the top performer down south year-to-date.
Gold would be ripping higher if Cyprus truly worried investors.
Even if you never click on Facebook ads, they are making you buy things.
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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