North American stock markets appear set for another choppy, nervous day of trading amid few signs of an imminent deal to resolve the U.S. "fiscal cliff" crisis.
U.S. stock index futures are flat this morning and the commodities-heavy TSX will have another headwind: prices for bullion and copper are both down near 1.5 per cent.
Gold is now perched just under $1,700 (U.S.) an ounce. The U.S. Federal Reserve's expanded monetary stimulus program announced Wednesday would seem to be positive for gold, given it keeps inflationary concerns alive. But the Fed's actions were largely expected and may have already been largely factored into the market. Bullion did immediately rise after the Fed said it would buy $45-billion of Treasuries per month starting in January, but profit takers are in control this morning.
Equity markets largely liked Fed Chairman Ben Bernanke's decision to keep key interest rates exceptionally low as long as the unemployment rate remained above 6.5 per cent. But gains earlier in the day on Wednesday were largely lost after he cautioned in a press conference that monetary policy can only go so far in counteracting the effects of automatic tax increases and spending cuts set to take hold at the end of this year should Washington not a agree on a budget.
Another concern for markets: that drop in the unemployment rate to 6.5 per cent could come sooner than many expect. That would ignite forward increases in borrowing costs even as the economy is still in recovery mode.
In Europe this morning, markets are lower, despite an announcement that finance ministers had reached agreement to grant the European Central Bank greater regulatory powers over the euro zone's biggest banks. Euro-area finance ministers also approved the release of the next aid payment to Greece today, with money expected to start flowing as soon as next week.
Here's a look at what else you need to know this morning.
MARKETS:
Equities:
U.S. futures: S&P 500, DJIA and Nasdaq all unchanged
Hong Kong's Hang Seng index -0.25 per cent
Shanghai composite index -1.04 per cent
Japan's Nikkei +1.69 per cent
London's FTSE 100 -0.27 per cent
Germany's DAX -0.34 per cent
France's CAC 40 -0.07 per cent
Commodities:
WTI (Nymex Jan) -0.74 per cent at $86.13 (U.S.) a barrel
Gold (Comex Feb) -1.42 per cent at $1,693.50 (U.S.) an ounce
Copper (Comex Mar) -1.57 per cent at $3.66 (U.S.) a pound
Currencies:
Canadian dollar up 0.0020, or 0.19 per cent, at 1.0175 (U.S.)
STOCKS AND ECONOMIC INDICATORS TO WATCH:
Statistics Canada said new housing prices rose 0.2 per cent in October from September.
Statscan said capacity utilization in the third quarter was 80.9 per cent, unchanged from the second quarter and a little higher than forecasts for 80.5 per cent.
The U.S. producer price index for November fell 0.8 per cent, versus economists' expectations for a monthly drop of 0.5 per cent.
U.S. retail sales rose 0.3 per cent in November, near expectations, and offsetting a decline of 0.3 per cent the previous month.
U.S. initial jobless claims fell 29,000 to 343,000 last week, better than the reading of 370,000 that was forecast. Claims are typically volatile this time of year.
Best Buy shares are up about 14 per cent in the premarket after the Minneapolis Star Tribune reported that founder Richard Schulze will renew efforts to purchase the big-box retailer this week with an offer said to be at least $5-billion.
Sprint Nextel Corp. said it is offering $2.1-billion (U.S.) to buy the rest of wireless internet provider Clearwire to get full ownership of its wireless spectrum. Clearwire shares are up 11 per cent in the premarket.
CVS Caremark Corp. said that its board approved a 38 per cent increase in the quarterly dividend as it laid out its expectations for higher earnings next year. Shares are up nearly 4 per cent in the premarket.
Earnings today include: Adobe Systems Inc. and Empire Co. Ltd.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
This structural change in the way the Fed communicates with the market has had a measurable effect on volatility and how traders trade around the announcement.
The New York Stock Exchange advance-decline chart is trading at a 52-week high with no signs of weakness.
After dismissing Russia for years as a dangerous investment destination, commodity bull Jim Rogers is now poking around the country looking for ways to profit.
Investors are rushing to fixed income ETFs - even as yields are awful. The answer why is complicated.
Why Dollarama has been unfairly discounted in the sector's downdraft.
In the medium term, a strong rally in the greenback is far more probable than most people believe.
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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