Stock futures are suggesting modest losses at the open of Canadian and U.S. stock markets this morning, as the volatility in global markets on Thursday has convinced many investors to book some profits after this year's nearly unstoppable bull run on Wall Street.
European markets are also a little lower this morning after a mixed performance in Asia, with Japan's Nikkei index seeing wild swings of more than 3 per cent on both sides of unchanged before closing up just shy of 1 per cent. On Thursday, Japanese stocks plunged more than 7 per cent, as traders lost confidence in equity markets following a rise in bond yields, an unexpected drip in Chinese manufacturing and ambiguous signals from the Federal Reserve as to how long its massive bond-buying program will continue.
Japanese stocks today were making headway in paring some of Thursday's losses, but went into retreat after Bank of Japan Governor Haruhiko Kuroda said the central bank had announced sufficient monetary easing and stated he has no target for the nation's equity and currency markets.
In Europe this morning, a focus was on a business confidence survey in Germany that showed a rise for the first time in three months. The Ifo institute's business climate index, which is based on feedback from 7,000 executives, rose to 105.7 in May from 104.4 in April, beating economists' expectations for a flat reading.
In the U.S., durable goods orders for April came in stronger than expected, helping U.S. stock futures to come off their lows.
Monday is the Memorial Day holiday in the U.S. It's likely markets will struggle to make gains today as many investors position themselves for the long weekend by taking some profits - especially after Thursday's market volatility served as a reminder that the climb of U.S. stocks into record territory won't go on forever.
Now, here's the rundown of what else is happening this morning and what's to come.
Futures: S&P Toronto -0.51 per cent; S&P 500 -0.39 per cent; Dow -0.22 per cent; Nasdaq -0.41 per cent
Hong Kong's Hang Seng -0.22 per cent
Shanghai composite index +0.59 per cent
Japan's Nikkei +0.88 per cent
London’s FTSE 100 -0.64 per cent
Germany’s DAX -0.51 per cent
France's CAC 40 -0.03 per cent
Italy's FTSE MIB -0.67 per cent
WTI crude oil (Nymex Jly) -0.67 per cent at $93.62 (U.S.) a barrel
Gold (Comex Jun) -0.42 per cent at $1,385.90 (U.S.) an ounce
Copper (Comex July) +0.08 per cent at $3.31 (U.S.) a pound
Canadian dollar down 0.0038, or 0.39 per cent, at $0.9667 (U.S.)
ECONOMIC INDICATORS TO WATCH:
U.S. durable goods orders in April rose 3.3 per cent, beating forecasts for a rise of 1.1 per cent. Excluding the transportation sector, orders rose 1.3 per cent, also beating forecasts calling for a rise of 0.5 per cent.
STOCKS TO WATCH:
National Bank of Canada reported adjusted earnings that were up 6 per cent from a year ago, beating analysts' expectations, as it announced a dividend increase and share buyback.
Manitoba Telecom Services Inc. should see heavy trading after announcing this morning it struck a $520-million deal to sell its Allstream division to an investment firm controlled by Egyptian billionaire Naguib Sawiris.
Sears Holdings Corp. shares are down 14 per cent in the premarket after the U.S. retailer late Thursday reported a deep loss of $279-million in its latest quarter and a drop in revenues. It also said it was exploring strategic alternatives, including a possible sale.
Proctor & Gamble Co. shares are up more than 3 per cent in the premarket after announcing the appointment of Alan George Lafley as CEO. He was the CEO of the company from 2000 to 2009 and replaces outgoing CEO Robert McDonald.
Pandora Media Inc. late Thursday reported adjusted first-quarter losses of 10 cents a share as revenues beat Street expectations. Shares are up 11 per cent in the premarket.
Other earnings today include: Abercrombie & Fitch Co.; Foot Locker Inc.; and Heroux-Devtek Inc.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
The defensive utility sector isn’t looking very safe at the moment.
Why you shouldn't count on the U.S. housing sector to drive the U.S. market recovery.
Equity index funds for the socially responsible.
Extreme fear - both for those fully invested, and those that aren't - is prevalent among investors right now. Some tips on how to deal with it.
Lumber prices are diverging from the housing sector.
The vast majority of S&P 500 stocks are above their 200-day moving average. Here's what to make of it.
Hedge fund performance has been pretty dreadful this year.
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.