The TSX is heading for a higher opening this morning after Chinese stocks surged overnight thanks to an upbeat reading on factory activity in that country.
The Shanghai composite index rallied 4.3 per cent, the most in three years, after the HSBC Flash PMI report came in at 50.9 so far in December, a 14-month high and providing one of the clearest signals yet that the recovery in the Chinese economy is starting to pick up momentum.
China is key to the demand picture for several commodities and, not surprisingly, crude oil and copper this morning are trading higher. Equities markets overseas, however, are uneven. Japanese stocks finished slightly negative as a report showed weaker-than-expected sentiment among big manufacturers just as the country prepares for general elections this weekend.
European stock markets were close to unchanged. Manufacturing data in the euro zone wasn't nearly as rosy as China's, with disappointing German factory figures overshadowing a small pick-up in the wider euro zone purchasing manager index.
Investors are still reluctant to load up on more equities as negotiations drag on to avert the U.S. "fiscal cliff" of tax hikes and spending cuts set to take hold at the start of January. There continues to be few concrete signs that any deal is imminent. A meeting between House Speaker John Boehner and U.S. President Barack Obama late Thursday was said to be "frank" and the two sides are keeping the lines of communication open. Mr. Obama may have a bit of an upper hand in negotiations given several recent public opinion polls show broad support for his position, and Republicans could get the majority of the blame if a deal isn't reached.
Now, here's a look at what else you need to know this morning.
U.S. futures: S&P 500 +0.1 per cent; DJIA +0.1 per cent; Nasdaq +0.4 per cent
Hong Kong's Hang Seng index +0.71 per cent
Shanghai composite index +4.34 per cent
Japan's Nikkei -0.05 per cent
London’s FTSE 100 -0.03 per cent
Germany’s DAX +0.25 per cent
France's CAC 40 unch
WTI (Nymex Feb) +0.35 per cent at $86.74 (U.S.) a barrel
Gold (Comex Feb) -0.04 per cent at $1,696.10 (U.S.) an ounce
Copper (Comex Mar) +0.34 per cent at $3.67 (U.S.) a pound
Canadian dollar up 0.0001, or 0.01 per cent, at 1.0157 (U.S.)
ECONOMIC INDICATORS TO WATCH:
Statistics Canada said manufacturing shipments fell 1.4 per cent in October from September, weaker than the flat reading economists were predicting.
The U.S. Commerce Department said its index of consumer prices dropped 0.3 per cent in November, the first decline since May. The core rate rose 0.1 per cent.
The U.S. Federal Reserve Board said industrial production rose 1.1 per cent in November, a stronger reading than the rise of 0.2 per cent that economists predicted. Capacity utilization was 78.4 per cent, versus the consensus of 78 per cent.
STOCKS TO WATCH:
Inmet Mining Corp. shares may rise after the company reported a 27 per cent rise in reserves at its massive Cobre Panama copper project in Central America.
Best Buy shares are down 10 per cent in the premarket after the company extended the bid window for founder Richard Schulze to make a takeover offer.
Standard & Poor's has downgraded Bank of Nova Scotia and National Bank of Canada, as well as four smaller Canadian financial institutions, amid a slumping economy and high consumer debt.
Apple shares are down about 2 per cent in the premarket after the company released the iPhone 5 in China. There are reports of lacklustre interest in stores in Beijing, though winter weather there may have kept consumers away.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
Bond guru Jeff Gundlach believes Japanese stocks may jump 30 per cent next year.
How the Fed is pushing investors to buy junk bonds.
Money managers have turned very bullish on equities, according to a new sentiment survey.
How much do Facebook interns make? A lot.
The oil sands connection to Encana's PetroChina deal.
Some well-known investors are saying good-bye to bonds.
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