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Inside the Market

Premarket: Stocks mostly in retreat, but BlackBerry jumps Add to ...

Stock futures are pointing to a weaker start for U.S. and Canadian markets this morning, although the TSX may see some pockets of strength as most commodity prices are trending higher and BlackBerry Ltd. shares are soaring on a report that the company is warming up to the possibility of going private.

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Reuters quoted several sources in the report suggesting that CEO Thorsten Heins and the company's board is increasingly coming around to the idea that taking BlackBerry private would be a smart move. Although no deal is imminent and the suggestion of privatization appears speculative at this point, shares are up 8 per cent in premarket trading.

The Canadian dollar erased earlier gains against the greenback and turned lower after Statistics Canada reported a much weaker-than-expected jobs report for July - although the monthly report has been very volatile in recent months.

Also in focus this morning is more Chinese economic data that was released overnight. They come in the wake of surprisingly strong trade statistics released on Thursday and, for the most part, provided further signals that the Chinese economy may be starting to pick up steam again.

China's industrial production rose 9.7 per cent in July, the fastest pace since February and surpassing forecasts for a 9 per cent rise. Urban fixed-asset investment, an indication of construction spending, rose 20.1 per cent from January to July, just a touch better than economists' projection of 20 per cent. In another report today, retail sales rose a robust 13.2 per cent in July, although that was a touch weaker than market expectations.

Slowing growth in China has been a key concern for market players in recent months, especially in the commodity sector. Although many remain skeptical that the economy is starting to pick up significantly in terms of its growth rates, recent data over the past week are easing some of these worries.

Crude oil is especially getting a lift this morning, in part because of the Chinese data, but also due to the International Energy Agency predicting today that oil demand will accelerate in 2014 to 1.1 million barrels per day, compared with 900,000 a day in 2013.

After the avalanche of corporate earnings on Thursday, especially from Canadian names, it's a much quieter day today. The earnings season is nearly wrapped up in the U.S., with 447 companies in the S&P 500 index already having reported results. The tally continues to show good progress on the bottom line but much less so on the top line: 73 per cent of the firms that have already reported beat analysts' profit forecasts, and 56 per cent surpassed revenue projections.

Now, here's a closer look at what's going on.

MARKETS:

Equities:

Futures: S&P 500 -0.37 per cent; Dow -0.34 per cent; Nasdaq -0.22 per cent; S&P Toronto -0.39 per cent

Hong Kong's Hang Seng +0.70 per cent

Shanghai composite index +0.35 per cent

Japan's Nikkei +0.07 per cent

London’s FTSE 100 +0.27 per cent

Germany’s DAX -0.17 per cent

France's CAC 40 -0.16 per cent

Commodities:

WTI crude oil (Nymex Sep) +1.22 per cent at $104.66 (U.S.) a barrel

Gold (Comex Dec) +0.06 per cent at $1,310.70 (U.S.) an ounce

Copper (Comex Sep) +0.41 per cent at $3.28 (U.S.) a pound

Currencies:

Canadian dollar at 96.70 (U.S.), versus 96.86 at yesterday's North American close. It had been trading at around 97.10 prior to today's Canadian jobs data.

U.S. dollar index up 0.01 at 80.99

Bonds:

U.S. 10-year Treasury yield 2.58 per cent, down 0.01

ECONOMIC INDICATORS TO WATCH:

Canada housing starts for July rose 192,853 on an annualized basis, slower than June's 199,600 but surpassing economists' forecasts for 190,000.

Canada reported a net loss of 39,400 jobs in July, a much weaker reading than the net increase of 10,000 jobs economists were expecting. The unemployment rate ticked up to 7.2 per cent from 7.1 per cent. Economists were expecting it to hold steady.

STOCKS TO WATCH:

BlackBerry shares are up 8 per cent in premarket trading on a report that the company is considering taking the company private.

Auto parts maker Magna International reported a stronger-than-expected 19-per-cent rise in second-quarter profit and raised its sales forecast for the year, buoyed by increased vehicle production in North America.

Priceline.com shares are up 6 per cent after reporting earnings late Thursday of $9.70 a share, surpassing Street expectations of $9.38. Revenues also beat the Street view.

THIS MORNING'S TOP INVESTING READS ON THE WEB:

Meredith Whitney, who has run either really hot or really cold on her predictions over the last several years, now believes Wall Street will cut 15 per cent of its workforce - up to 100,000 jobs -- in the next 18 months.

Bill Gross urges investors to stick with bonds in a new note to clients that carries a metaphor termed tasteless by a Financial Times blog. .... but then there's James O'Shaughnessy, who is calling this a "generational" chance for bond investors to sell.

The always gloomy Marc Faber now sees U.S. stocks crashing 20 per cent by year end.

Five lessons for investors when it come to hyped IPOs.

Five actively managed ETFs in this year’s freshman class that are either unique or are getting a lot of buzz.

Bullish sentiment in the U.S. is rebounding slightly.

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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.

 

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