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Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange September 3, 2012. (Lizza May David/REUTERS)
Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange September 3, 2012. (Lizza May David/REUTERS)

Market Blog

Premarket (update): Stocks to open higher as ECB doesn't disappoint Add to ...

Markets are set for a higher open as the European Central Bank agreed to a new bond-buying program on Thursday, as expected, to lower borrowing costs in struggling euro zone countries.

U.S. stock futures are holding firm this morning amid a rush of U.S. economic and euro zone policy news, pointing to a higher start for the North American trading day.

More Related to this Story

ECB head Mario Draghi is holding a news conference detailing the ECB plans. The program doesn't exactly have a catchy title. Called "Monetary Outright Transactions," or MOT, it will focus on the secondary sovereign bond market and Draghi said it was necessary to deal with "severe distortions" in the bond markets.

As markets digest the ECB news, they received some encouragement this morning from the ADP private-sector payrolls report, which rose 201,000 in August, well ahead of the 145,000 that was forecast. U.S. jobless claims data weren't nearly as bright, falling 12,000 to 365,000 for the week ended Sept. 1.

The more significant U.S. payrolls report comes out Friday morning.

The TSX should also see support from higher commodities this morning. Gold, in particular, is having a good day, pushing through the $1,700 (U.S.) overnight to its highest levels since March. 

Now, here's the run down of what else you need to know as the investing day gets underway.

MARKETS:

Equities:
Futures: Dow +0.5 per cent, S&P 500 +0.6 per cent, Nasdaq +0.6 per cent

Hong Kong's Hang Seng index +0.3 per cent

Shanghai Shenzhen CSI 300 +0.7 per cent

Japan’s Nikkei +0.01 per cent

London’s FTSE 100 +0.5 per cent

France’s CAC 40 +0.9 per cent

Germany’s DAX index +1.2 per cent

Commodities:
WTI (Nymex Oct) +1.1 per cent at $96.00 (U.S.) a barrel

Gold (Comex Dec) +1.0 per cent at $1,711 (U.S.) an ounce

Copper (Comex Dec) -0.4 per cent at $3.51 (U.S.) a pound

Currencies:
Canadian dollar up  0.0024, or 0.2 per cent, at 1.0122 (U.S.)

STOCKS AND ECONOMIC INDICATORS TO WATCH:

(10 a.m. ET): The U.S. Institute for Supply Management issues its non-manufacturing index for August. Economists expect a reading of 53.0.

Grain handler Viterra Inc. says a big one-time income tax charge and costs associated with the early redemption of company bonds drove down profits in the third quarter.

Inmet Mining Corp. said late Wednesday it plans a takeover offer for Vancouver-based Petaquilla Minerals Ltd. worth about $112-million (Canadian).

WestJet has reported its highest load factor in its 16-year history.

Among companies also reporting earnings are: ADF Group Inc.; Com Dev International Ltd.; Descartes Systems Group Inc.; North West Co. Inc.; and Transcontinental Inc.

Amazon is expected to announce at least one new version of its 7-inch Kindle Fire at a press conference near Los Angeles.

THIS MORNING'S TOP READS ON THE WEB:

A new study finds that the majority of the ultra-wealthy plan to buy more stocks in the next 12 months. In fact, stocks beat out all other asset classes when it comes to where the rich plan to put their money in 2012.

European stocks, which have been in a broad upswing for the past three months, could retreat by up to 20 per cent, presenting an opportunity to move back into the market, says Marc Faber, author of “The Gloom, Boom & Doom Report.”

With Apple now making up nearly 5 per cent of the S&P 500, its rally of more than 60 per cent in 2012 is driving much of the divergence between the Dow and the S&P 500 this year.

Precious metals have moved well into overbought territory over the last week when looking at their 50-day moving averages.

...but also note that September is the best month of the year for the metal historically. Since 1980, gold has averaged a gain of 1.7% during the month

The most shorted (i.e. hated) stocks in the volatile Russell 2000 Index - and how investors may be able to profit from the list.

CNBC's Jim Cramer doesn't admit he's wrong very often. But he did Wednesday, after his prediction that the market would fall on Fedex's profit warning didn't come true. He says markets just aren't reacting to bad news right now the way they used to.

The action of the stock market in the two months preceding election day – from Thursday through November 6 — carries a 90 per cent probability of forecasting whether the incumbent party will retain the White House or lose it, according to the editor of the Investech newsletter.

 

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