North American stocks look set for gains this morning after Asian markets soared overnight on signals that China will take aggressive steps to keep its economy humming.
Hong Kong and Shanghai stock indexes rose more than 2 per cent as Chinese leaders eased restrictions on investing in banks and left markets with the impression that they'll take further supportive measures for the economy. China said it will actively promote urbanization to expand domestic demand and has abolished a rule that limits insurers' investments in commercial banks.
Recent data out of China have indicated that its economy was already starting to pick up steam after growth waned earlier this year. The latest actions provide further confidence that the recovery will continue. China is crucial to demand for several commodities, and not surprisingly, prices for copper and oil are up this morning. Gold has also retaken the $1,700 level after sliding Tuesday to four-week lows.
The TSX should benefit from all of this when it opens, although the ongoing "fiscal cliff" saga in the U.S. continues to dampen enthusiasm for equities. There are signs the uncertainty surrounding the negotiations to head off the tax increases and spending cuts on Jan. 1 is already starting to negatively impact the latest U.S. economic figures.
In Europe overnight, a gauge of business activity across thousands of companies showed some signs of improvement, rising in November to 46.5 from 45.7 in October. That's markedly higher than the preliminary reading of 45.8 reported 10 days ago, but still well below the 50 mark that divides growth and contraction.
Meanwhile, Britain this morning substantially cut its growth forecasts as the government hacks away at government spending. It expects GDP to fall by 0.1 per cent this year, against the last prediction, made in March, for 0.8-per-cent growth. In 2013, Britain now expects a mere 1.2-per-cent growth, down from 2 per cent.
Now, here's what else you need to know this morning.
U.S. futures: S&P 500 +0.3 per cent; DJIA +0.4 per cent; Nasdaq +0.2 per cent
Hong Kong's Hang Seng index +2.16 per cent
Shanghai composite index +2.88 per cent
Japan's Nikkei +0.39 per cent
London’s FTSE 100 +0.24 per cent
Germany’s DAX +0.28 per cent
France's CAC 40 +0.27 per cent
WTI (Nymex Jan) +0.20 per cent at $88.68 (U.S.) a barrel
Gold (Comex Feb) +0.49 per cent at $1,704.10 (U.S.) an ounce
Copper (Comex Mar) +0.44 per cent at $3.67 (U.S.) a pound
Canadian dollar up 0.0007, or 0.07 per cent, at 1.0076 (U.S.)
STOCKS AND ECONOMIC INDICATORS TO WATCH:
A consortium led by KingSett Capital is making an all-cash $4.4-billion offer for Primaris Retail Real Estate Investment Trust. The $26 per unit offering price represents a premium of about 12.8 per cent to Tuesday's closing price.
Freeport-McMoRan Copper & Gold Inc. said it would acquire Plains Exploration & Production Co. and McMoRan Exploration Co. in two separate deals for $9-billion (U.S.) in cash and stock. Freeport shares are down 13 per cent in the premarket; Plains Exploration is up 26 per cent; and McMoRan Exploration shares are up 74 per cent.
Citigroup Inc. shares are up 3.2 per cent in the premarket after announcing a $1-billion (U.S.) charge and 11,000 job cuts.
Pandora Media Inc. shares should fall sharply today after the Internet-radio firm's quarterly and yearly forecasts missed Street forecasts late Tuesday.
Canadian Pacific shares should see heavy volumes after the railway late Tuesday announced it will slash about one-quarter of its work force over four years as part of a sweeping restructuring plan.
Starbucks Corp. unveiled a new accelerated global growth plan that will double its international locations by 2015, with special emphasis on China. Shares are up 1.4 per cent in the premarket.
Earnings today include Laurentian Bank of Canada.
U.S. ADP private payroll employment rose 118,000 in November, down from October's 158,000 and a little less than economists' forecasts for 125,000.
(1000 a.m. ET) The U.S. Institute for Supply Management publishes its non-manufacturing index for November. Economists expect a reading of 53.5.
(1000 a.m. ET) U.S. releases October factory orders. Economists are expecting a contraction in orders of 0.1 per cent.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
Trading in CBOE Volatility Index futures hit an all-time high for the third month in a row in November, even as the market’s so-called fear gauge itself remains muted by historical standards.
The New York Stock Exchange is padding its lead over Nasdaq in terms of listings.
Famed hedge fund manager David Einhorn has been increasing his exposure to equity markets over the past few months.
Chinese closed-end fund discounts are evaporating, a further signal that investor opinion on stocks there are growing more favourable.
How Sprott's Flatiron bet went bad.
For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities