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Premarket: Stocks to post further gains, loonie jumps Add to ...

Stock futures suggest a modestly higher opening for U.S. and Canadian markets this morning, although most key commodities are a little lower, threatening to hold back the resource-heavy TSX from a more significant rally.

Overseas markets were higher overnight, led by a rally in Chinese shares, buoyed by comments from Premier Li Keqiang that China's "bottom line" for economic growth is 7 per cent. His comment followed a recent meeting with economists and business leaders, and reassured investors that they didn't have to worry about a severe economic downturn. 

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A higher ending today for the S&P 500 would be its 24th record close this year. While that may sound like a market getting overheated, the large number of record highs this year is not unusual during a bull market period. The benchmark index has now climbed 151 per cent from its March 2009 low.

Stocks generally have been in rallying mode since Federal Reserve Chairman Ben Bernanke last week pledged to maintain ultra-loose monetary policies for the foreseeable future and reiterated the tapering of its bond purchases is not on a preset course.

Other than Canadian retail sales, which came in much stronger than expected and boosted the Canadian dollar, there's little economic news on the agenda today - but lots of corporate earnings. Key highlights are below in the stocks to watch section. So far, corporate results have been positive from an earnings perspective, but the top line hasn't been that impressive. For the 111 companies that have already posted results for the second quarter, 72 per cent have beat analysts' profit forecasts as of the end of day on Monday - but only 51 per cent surpassed sales projections, according to Bloomberg.

Now, here's a closer look at what's going on and what's to come later today.

MARKETS:

Equities:

Futures: S&P 500 +0.16 per cent; Dow +0.15 per cent; Nasdaq +0.23 per cent; TSX +0.10 per cent

Hong Kong's Hang Seng +2.33 per cent

Shanghai composite index +1.96 per cent

Japan's Nikkei +0.83 per cent

London’s FTSE 100 +0.21 per cent

Germany’s DAX +0.11 per cent

France's CAC 40 +0.13 per cent

Commodities:

WTI crude oil (Nymex Sep) -1.2 per cent at $106.70 (U.S.) a barrel

Gold (Comex Dec) -0.6 per cent at $1,328.40 (U.S.) an ounce

Copper (Comex Sep) -0.2 per cent at $3.18 (U.S.) a pound

Currencies:

Canadian dollar at 97.05 (U.S.), versus 96.67 at Monday's North American close.

U.S. dollar index up 0.10 at 82.32

Bonds:

U.S. 10-year Treasury yield 2.51 per cent, up 0.03

ECONOMIC INDICATORS TO WATCH:

Statistics Canada said Canadian retail sales for May rose 1.9 per cent from April, far surpassing the 0.5 per cent rise expected by economists.

STOCKS TO WATCH:

Telus Corp. shares should rise after announcing later Monday it is doubling the size of its share buyback program.

Wendy's Co. shares are up 7.7 per cent in the premarket after announcing it will boost its quarterly dividend by 25 per cent and sell 425 company-owned restaurants to franchise operators. It reported adjusted earnings of 8 cents a share, beating the Street estimate of 6 cents.

Freeport McMoRan Copper & Gold Inc. reported quarterly earnings of 49 cents a share, beating the Street view of 41 cents. Shares are up 1 per cent in the premarket.

United Parcel Services Inc. reported earnings of $1.13 a share, matching Street estimates.

Dupont reported a 12 per cent drop in second-quarter earnings and said it is exploring strategic alternatives for its performance chemicals arm. Shares are up 2.6 per cent in the premarket.

Travellers Cos. Inc. reported second-quarter adjusted profit of $2.13, beat the $1.59 Street estimate. Shares are up 3.5 per cent in the premarket.

Canadian National Railway late Monday reported adjusted earnings per share of $1.66, beating the Street view of $1.63.

Texas Instruments Inc. shares are up 2.8 per cent in the premarket after late Monday forecasting third-quarter sales and profit that may exceed Street views.

TD Ameritrade Holding Corp. reported quarter profit of 33 cents a share, compared with Street estimates of 31 cents. Revenues of $725-million beat the Street view of $706-million.

Netflix shares are down 6 per cent in premarket trading after the company's subscriber growth in its latest quarter disappointed the Street despite profit growth.

Other earnings today include: Apple Inc.; AT&T Inc.; Discover Financial Services; Domino’s Pizza Inc.; JetBlue Airways Corp.; Lexmark International Inc.; Lockheed Martin Corp.; Panera Bread Co.; RadioShack Corp.

THIS MORNING'S TOP INVESTING READS ON THE WEB:

Goldman Sachs has choreographed an aluminum warehouse maneuver to exploit pricing regulations - and it has cost consumers billions over the long haul, according to a New York Times investigation.

Oil's recent rally is raising 'flash-crash' fears.

The U.S. stock market appears to be entering a dangerous euphoria stage of the bull market.

Some fund managers are holding more cash, worried that equity values are getting overheated and the bond market is less than appealing.

The "great rotation" from bonds and into equities is now undeniable. To further illustrate the point, note that the Dow is just 6 per cent from a 10,000-point rally.

-----

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.

 
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