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Premarket: Stock futures turn positive despite Nikkei thrashing Add to ...

U.S. and Canadian stock futures have climbed out of the red ahead of the opening bell after the release of stronger-than-expected jobless claims and retail sales data. They were earlier down around 0.3 per cent in the wake of a tough session overnight in Asia  - especially in Japan. 

The Nikkei plunged 6.4 per cent, spurred in part by a resurgence in the yen, and Chinese markets returned from several days of holidays and promptly turned red. The U.S. dollar fell as low as 93.76 yen in the Asian session - a two-month low - and isn't far off that level as North American markets prepare to open. Southeast Asian stocks are certainly not a haven - Singapore's Straits Time index lost 0.7 per cent and has now dropped more than 10 per cent from its May 22 high. Other indexes in the region have also been hurting.

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The selling spirit in Asia spread to Europe later, with the Stoxx Europe 600 index down just over 1 per cent. The European benchmark is down 7.5 per cent since reaching a high on May 22.

Once again, the culprit is worries among global traders that central banks are going to soon start easing back on their easy money policies, which helped economies to bounce back from the depths of the recession following the U.S. credit crisis that started about five years ago. The Fed has dropped hints it may soon taper its bond-buying program, the European Central Bank is showing reluctance to expanded measures to invigorate the euro zone and the Bank of Japan is also not piling on further stimulus measures.

And in a sign of just how fragile the global economy remains even with all the recent actions of central banks, the World Bank today cut its global growth forecast to 2.2 per cent for 2013, down from its last prediction of 2.4 per cent in January.

Market sentiment got a minor boost just ahead of the opening bell as the U.S. released better-than-expected jobless claims and retail sales data. We detail those and much more in our roundup below.

MARKETS:

Equities:

Futures: S&P Toronto -0.41 per cent; S&P 500 +0.09 per cent; Dow +0.01 per cent; Nasdaq +0.08 per cent

Hong Kong's Hang Seng -2.19 per cent

Shanghai composite index -2.84 per cent

Japan's Nikkei -6.35 per cent

London’s FTSE 100 -1.01 per cent

Germany’s DAX -1.43 per cent

France's CAC 40 -0.68 per cent

Commodities:

WTI crude oil (Nymex July) -0.31 per cent at $95.58 (U.S.) a barrel

Gold (Comex Aug) -0.42 per cent at $1,386.10 (U.S.) an ounce

Copper (Comex July) -1.02 per cent at $3.19 (U.S.) a pound

Currencies:

Canadian dollar up 0.0044, or 0.45 per cent, at $0.9841 (U.S.)

Bonds:

U.S. 10-year Treasury yield 2.23 per cent, up 0.03

Canada 10-year government bond yield 2.21 per cent, up 0.03

ECONOMIC INDICATORS TO WATCH:

U.S. jobless claims for last week fell 12,000 to 334,000, a better reading than the 350,000 that was forecast by economists.

U.S. retail sales in May rose 0.6 per cent, slightly better than the 0.5 per cent that was forecast.

U.S. import prices in May fell 0.6 per cent. They were expected to come in flat.

Canadian industrial capacity utilization rate rose to 81.1 per cent in the first quarter, up 0.6 of a percentage point from the fourth quarter, with the manufacturing sector seeing the first increase in three quarters.

Canadian new house prices rose 0.2 per cent in April from March, or a rise of 2.0 per cent on a year-over-year basis.

(10 a.m. ET) U.S. releases business inventories for April, forecast to rise 0.3 per cent.

STOCKS TO WATCH:

Safeway Inc. shares are up 25 per cent in the premarket after announcing late Wednesday it will sell its Canadian grocery division to Sobeys Inc., owned by Empire Co.

Transat A.T. Inc. reported a quarterly adjusted loss of 4 cents per share, far better than the 26 cents per share loss estimated by analysts. Revenue of $1.1-billion was in line with analysts' forecasts.

Gannett Co. Inc. said it agreed to pay $1.5-billion (U.S.) in cash to buy Belo Corp. in a deal that represents a 28.1 per cent premium on Belo's closing price on Wednesday. Belo shares are up 26 per cent in the premarket; Gannett shares are up 24 per cent.

THIS MORNING'S TOP INVESTING READS ON THE WEB:

Did you know that some elite traders get a head start on market-moving data with plenty of time to execute trades before the general public receives the same information? In this case, they certainly do.

Jim O'Neill, the former chief economist of Goldman Sachs, thinks bond yields are heading to near 4 per cent and not even Fed Chairman Ben Bernanke can stop to "inevitable shock" that's coming.

Relax: rising rates won't choke the economic recovery.

Why you may want to give the benefit of the doubt to the bull market sticking around.

Investors who bought into Apple's $17-billion bond offering are nursing big losses.

Non-transparent actively managed ETFs could be on the way.

CNBC's Jim Cramer thinks Wells Fargo is the single greatest play on the housing recovery.

-----

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.

 
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