North American markets appear set for a flat open, despite some positive news out of Europe that euro-area finance ministers agreed to a Greek aid deal.
Some U.S. economic reports this morning, including a stronger-than-expected reading on durable goods, did little to sway market sentiment.
The finance ministers and the International Monetary Fund agreed late Monday that Greek public debt should fall to 124 per cent of GDP in 2020 through a package of extra debt-cutting measures totalling 20 per cent of GDP. Euro member states are now expected to disburse €43.7 billion ($56.8-billion (U.S.) of aid to Greece in several tranches.
While a welcome development in the European debt crisis, it's seen as only a temporary fix for the longer-term challenges to come for the region. The OECD put these risks in the spotlight this morning by slashing its global growth forecasts, warning that the debt crisis in the recession-hit euro zone is the greatest threat to the world economy. The Paris-based think-tank forecast that the global economy would grow 2.9 per cent this year before expanding 3.4 per cent in 2013. The estimate marked a sharp downgrade since the OECD last estimated a rate in May of 3.4 per cent for this year and 4.2 per cent in 2013.
Meanwhile, traders are focused on the fiscal cliff of tax increases and spending cuts set to take hold Jan. 1 unless the U.S. political parties can agree to terms to avert it. There have been a number of comments from Republicans in recent days that suggest they may be flexible on allowing taxes to rise, but only through axing certain tax loopholes for the wealthy rather than actual tax rate increases.
European markets overnight were stronger on the debt deal, but Asian markets were mixed. Tokyo shares reached seven-month highs, but the Shanghai index fell more than 1 per cent on worries that corporate profit growth in China may be slowing.
Now, here's what else you need to know before markets open this morning.
MARKETS:
Equities:
U.S. futures: DJIA -0.1 per cent; S&P 500 -0.1 per cent; Nasdaq +0.1 per cent
Hong Kong's Hang Seng index -0.08 per cent
Shanghai composite index -1.31 per cent
Japan's Nikkei +0.36 per cent
London's FTSE 100 +0.40 per cent
Germany's DAX +0.48 per cent
France's CAC 40 +0.29 per cent
Commodities:
WTI (Nymex Jan) +0.17 per cent at $87.89 (U.S.) a barrel
Gold (Comex Dec) -0.18 per cent at $1,746.40 (U.S.) an ounce
Copper (Comex Mar) +0.18 per cent at $3.56 (U.S.) a pound
Currencies:
Canadian dollar up 0.0006, or 0.06 per cent, at 1.0078 (U.S.)
STOCKS AND ECONOMIC INDICATORS TO WATCH:
The U.S. Commerce Department said durable goods orders in October were unchanged. Economists had expected a drop of about 1 per cent.
The S&P Case-Shiller Home Price Index for September rose 3 per cent, in line with expectations.
(1000 a.m. ET) The U.S. Conference Board issues its index of consumer confidence for November. Economists expect a reading of 73.
Bombardier Inc. has scored the biggest business-jet sale in its history, signing a $7.8-billion (U.S.) deal with VistaJet for up to 142 global business aircraft.
Manulife Financial Corp. appointed Marianne Harrison to head the company's Canadian division. She had been president of Manulife's John Hancock Long Term Care Insurance in the United States since 2008.
ConAgra is buying Ralcorp Holdings Inc. for $4.95-billion (U.S.). Ralcorp shares are up 26 per cent in the premarket.
Earnings today include Alimentation Couche-Tard Inc.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
While there are still some mixed signals for stocks, some very powerful signals have lined up so that the bulls once again have a chance to take control of this market.
To get higher returns, say the traditional models, you must accept more risk. There's just one problem with that idea: it's not borne out by history.
Gold's technical charts right now are suggesting higher prices ahead.
People who buy market matching index funds have more investment skill that those who try to beat the markets by picking actively-managed mutual funds. The proof is in performance.
Android users aren't shopping on their smartphones at nearly at the rate iPhone users are.
Zero U.S. IPOs are on the docket for the coming week and the week after. If issuers don't get moving, December is likely to be an uncharacteristically quiet month for IPOs.
Why emerging market bonds are strong, cheap – and safe
________
For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities
Darcy Keith