Canadians didn't miss much while enjoying an extended summer weekend: Wall Street saw its quietest day of the year on Monday based on trading volumes, with the S&P 500 backing away from record highs to close down 0.16 per cent. Today is also shaping up to be a rather subdued session.
U.S. and Canadian stock futures are just a touch lower, major commodities are mixed, and currency and bond markets aren't seeing much action either.
Chicago Fed President Charles Evans will be speaking at 1 p.m. (ET), and traders are anxious to hear more hints on when the tapering of the Federal Reserve's bond-buying program could begin. On Monday, Dallas Fed president Richard Fisher said the Fed is nearer to scaling back the so-called quantitative easing program after the U.S. unemployment rate dropped last month.
Fed chairman Ben Bernanke has already suggested the tapering actions could begin as early as next month. With many traders on holidays in August and Fed actions not expected at least until September, this final full month of summer could mostly see consolidation in equity markets - in other words, mostly rangebound trading.
There were some encouraging economic reports overnight out of Europe, although they didn't shake up equity markets much. German industrial orders rose a healthy 3.8 percent in June from May on a seasonally adjusted basis - but orders declined 0.7 per cent when some big-ticket orders were excluded, especially from the Paris air show. British industrial production rose 1.1 per cent in June, nearly double forecasts and the highest reading since January of 2011.
Elsewhere overnight, the Reserve Bank of Australia cut its benchmark interest rate to a record low of 2.5 per cent from 2.75 per cent. That was widely expected, but the central bank also dropped hints it could cut rates further.
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 -0.19 per cent; Nasdaq -0.06 per cent; S&P Toronto -0.39 per cent
Hong Kong's Hang Seng -1.34 per cent
Shanghai composite index +0.51 per cent
Japan's Nikkei +1.00 per cent
London's FTSE 100 -0.19 per cent
Germany's DAX -0.03 per cent
France's CAC 40 +0.05 per cent
Commodities:
WTI crude oil (Nymex Sep) +0.32 per cent at $106.90 (U.S.) a barrel
Gold (Comex Dec) -0.80 per cent at $1,292.00 (U.S.) an ounce
Copper (Comex Sep) +0.98 per cent at $3.20 (U.S.) a pound
Currencies:
Canadian dollar at 96.37 (U.S.), versus 96.25 at Friday's North American close.
U.S. dollar index down 0.11 at 81.75
Bonds:
U.S. 10-year Treasury yield 2.65 per cent, up 0.01
ECONOMIC INDICATORS TO WATCH:
The U.S. trade deficit in June narrowed to $34.2-billion (U.S.) from May's $45.0-billion, the smallest gap since 2009. That was also narrower than the $43.0-billion trade deficit expected by economists.
Canada's trade deficit in June shrank to $469-million (Canadian) from a revised deficit of $781-million in May. The Street was expecting a $560-million deficit.
STOCKS TO WATCH:
Washington Post Co. agreed to sell its namesake newspaper to Amazon.com CEO Jeff Bezos for $250-million (U.S.). Shares are up 5 per cent in the premarket.
American Eagle Outfitters Inc. late Monday slashed its second-quarter outlook due to weaker-than-expected sales and margins. Shares plunged 17 per cent in extended trading.
Sony said it sent a letter Monday to Daniel Loeb's Third Point LLC that rejects a bid to spin off the Sony entertainment unit. Sony's U.S.-listed shares are down nearly 4 per cent in the premarket.
Earnings today include Amerigo Resources; Brookfield Infrastructure; Canaccord Financial; Canam Group; Endeavour Silver; FP Newspapers; Ritchie Brothers; Saputo; Archer Daniels Midland Co.; Molson Coors Brewing; MGM Resorts International; Dish Network Corp.; Oasis Petroleum Inc.; Sotheby's; Avis Budget Group Inc.; and Marathon Oil Corp.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
This sentiment indicator suggests investors are unusually reluctant to commit money to the current rally.
Key breadth indicators are confirming the underlying strength of the U.S. market rally.
New research backs up Warren Buffett's belief that an excellent company at a decent price makes a better buy than a fair company at an excellent price.
The returns of equities and commodities have become more integrated in the aftermath of the subprime crisis, a result that questions the diversification benefits of commodities.
The IPO market is entering a new golden era.
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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.
Darcy Keith