Markets are behaving themselves quite well this morning, with long-term U.S. Treasury yields and the greenback a little softer, commodities generally a bit stronger, and global stock markets and futures mostly edging up. Credit concerns about China continue to ease, as the country's seven-day repo rate fell 5 basis points to 6.74 per cent, about half of the record high it reached last week.
For the moment, the surprisingly weak final reading on first-quarter U.S. gross domestic product Wednesday has put a floor on the market, as many players take it as a signal that the U.S. Federal Reserve may hold off on tapering its bond-buying program for some time. The quantitative easing measures have been a key factor behind the stock market rally of the past year, and the Fed's recent hints that it may pare asset purchases led to global equity markets losing more than $3-trillion (U.S.) this month.
A handful of U.S. economic reports today, on U.S. spending, jobless claims and housing, are coming out. So far, jobless claims met expectations and personal income was a little stronger than economists had forecast, helping U.S. stock futures to extend gains.
Overnight, the Nikkei put in a strong performance, rallying nearly 3 per cent, with sentiment there improving thanks to the U.S. GDP report and renewed signals of a continuation of central bank stimulus.
Gold prices overnight rose after the more than 3 per cent plunge on Wednesday, but those gains have been erased ahead of the opening bell on Wall Street, with traders skittish to buy into a market that's seen so much damage this year.
Now, here's a closer look at what's going on this morning and what's to come.
Futures: S&P 500 +0.5 per cent; Dow +0.4 per cent; Nasdaq +0.5 per cent; TSX Toronto +0.4 per cent
Hong Kong's Hang Seng +0.50 per cent
Shanghai composite index -0.08 per cent
Japan's Nikkei +2.96 per cent
London’s FTSE 100 +0.30 per cent
Germany’s DAX +0.03 per cent
France's CAC 40 unchanged
WTI crude oil (Nymex Aug) +0.23 per cent at $95.72 (U.S.) a barrel
Gold (Comex Aug) -0.02 per cent at $1,229.50 (U.S.) an ounce
Silver (Comex Sep) +0.12 per cent at $18.63 (U.S.) an ounce.
Copper (Comex Sep) +0.58 per cent at $3.06 (U.S.) a pound
Canadian dollar up 0.0016, or 0.15 per cent, at $0.9559 (U.S.)
U.S. dollar index down 0.04 at 82.92
U.S. 10-year Treasury yield 2.54 per cent, down 0.05
Canada 10-year government bond yield 2.50 per cent, down 0.04
STOCKS TO WATCH:
Canadian telecom stocks may come under further pressure after the Globe and Mail reported Wednesday that Verizon may be entering the Canadian wireles industry. RBC Dominion Securities has downgraded both Rogers Communications and Telus to "sector perform" ratings while also cutting its price targets on those two firms plus BCE.
Toronto-Dominion Bank is set to take over as the new provider of Aeroplan credit cards once Canadian Imperial Bank of Commerce’s contract with the rewards program expires at the end of the year.
Cineplex Inc. is buying certain Empire theaters for $200 million.
Barrick Gold Corp. shares are up 2.7 per cent in the premarket, with a bit of bargain hunting going on after its 8.2 per cent plunge on Wednesday.
Earnings today include: Shaw Communications Inc.; Empire Co. Ltd.; McCormick & Co. Inc.; KB Home' Nike Inc.
ECONOMIC INDICATORS TO WATCH:
U.S. jobless claims for last week fell 9,000 to 346,000, a little higher than the 345,000 that was expected.
The U.S. Commerce Department said personal income in May rose 0.5 per cent versus the 0.2 per cent rise economists had expected; personal pending rose 0.3 per cent, meeting expectations.
(10 a.m. ET) The U.S. National Association of Realtors reports on pending home sales in May. Economists expect an annual rise of 11.5 per cent.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
How markets would react if 10-year Treasury yields reach 4 per cent.
Some traders and hedge fund managers are now looking for more arcane opportunities to profit from the end of the commodities supercycle.
43 of 45 global markets are now oversold, according to bank of America.
One of last year's top-performing hedge fund managers is suffering a reversal of fortune
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. You can also be notified using our dashboard feature when new articles appear from this author. Read more on using this feature here.