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Premarket: FedEx reignites global growth worries

Investors' appetite for riskier assets such as stocks is continuing to be on the wane, with markets overnight posting modest losses and U.S. stock futures pointing to a lower start in North America.

A few things have traders worried this morning. Spain is showing reluctance to seek help from the euro zone's rescue funds, an indication that it could be a bumpy road in the overall fight to ease the euro zone debt crisis. Rising political tensions between China and Japan is raising concern about their trade relationship. And a key earnings report from bellwether FedEx this morning has once again put the slowing global economy back in focus.

Fedex reduced its 2013 guidance to $6.20 from $6.60 a share, compared to an earlier prediction of $6.90 to $7.40. It did, however, actually beat its first-quarter forecast, earning $1.45 a share in the period versus its expectations of $1.40. Shares in FedEx are down 2.3 per cent in the premarket at $87.20 (U.S.)

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One bright spot in the world of equities, as it often has been lately, is Apple. In the post market on Monday, its shares breached the $700 mark for the first time ever after announcing earlier in the day it had sold out of pre-orders for the new iPhone 5. In the premarket this morning, shares are up 0.3 per cent at $701.85.

Now, here's the rundown of what else you need to know as the investing day gets underway.


Futures: Dow -0.02 per cent, S&P 500 -0.2 per cent, Nasdaq -0.2 per cent

Hong Kong's Hang Seng index -0.27 per cent

Shanghai Shenzhen CSI 300 -0.89 per cent

Japan's Nikkei -0.39 per cent

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London's FTSE 100 -0.65 per cent

France's CAC 40 -1.00 per cent

Germany's DAX index -0.94 per cent

WTI (Nymex Oct) -0.51 per cent at $96.13 (U.S.) a barrel

Gold (Comex Dec) -0.66 per cent at $1,759.00 (U.S.) an ounce

Copper (Comex Dec) -0.91 per cent at $3.76 (U.S.) a pound

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Canadian dollar down 0.0009, or 0.09 per cent, at 1.0250 (U.S.)


Advanced Micro Devices should come under heavy selling pressure this morning after its CFO, Thomas Seifert, resigned late Monday. AMD said he stepped down "to pursue other opportunities" but investors appear concerned, with the stock down 4.7 per cent in the premarket.

Shares of Dole Food jumped more than 5 per cent in premarket trading after the company struck a deal to sell its global packaged-foods unit and its Asia fresh produce business for nearly $1.69-billion (U.S.) to Japan's Itochu Corp.

Other earnings out today include Manchester United.

The U.S. Commerce Department reported that the current account deficit narrowed to $117.4-billion, shrinking more than the $126.8-billion that economists had forecast.  It was the narrowest since the third quarter of 2011 as the country imported fewer goods while income earned on U.S. assets abroad increased.

(1000 a.m. ET) The U.S releases its housing market index. It's expected to climb 1 point to 38.


Bill Gross, the co-Chief Investment Officer of Pimco, and manager of the world's largest bond funds, has weighed in on recent central bank action with a scathing tweet.

Boosted by the iPhone 5, exports of Apple products will give the Chinese economy a monster lift in the fourth quarter, according to Barclays.

Stock sectors that could do well if Democrats win in November have been outpacing those that might be in favor if Republicans get control of the White House and Senate.

Wall Street pros pick the No. 1 thing that could wreck this rally.

Michael Pettis, a finance professor at Peking University and a former managing director with Bear Stearns, believes hard commodity prices will collapse by 2015.

Leading international fund managers have reduced their holdings in South Africa's natural resources sector since fighting at Lonmin's Marikana mine resulted in the deaths of 44 people last month.

U.S. retailers believe it's going to be a merry Christmas, with sales in the second half of this year forecast to rise 3.6 per cent from 2011, the biggest increase in at least four years.

The boom in American corporate profits, which has far outpaced the gains in the broader economy since the end of the last recession, is faltering.

This week marks the one-year anniversary of the Occupy Wall Street movement. These figures may not make demonstrators too happy. Over the past year, the S&P 500 has risen 20 per cent. The S&P 500 financial sector? 25 per cent.

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About the Author
Investment Editor

Darcy Keith is The Globe and Mail's Investment Editor. He has been a business journalist since 1992 and joined the Report on Business in 2010 from Yahoo! Canada, where he was the senior editor of finance. More


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