A series of unsettling events in Spain, which arrived on the heels of the S&P 500's worst fall in about three months on Tuesday, had overnight markets seeing a lot of red. Stocks in China fell to their lowest levels since 2009 and Spain's IBEX is down nearly 3 per cent. Nevertheless, North American markets appear headed for only minor losses at the open.
Anti-austerity protests turned violent in Madrid, while the Catalonia region announced snap elections that raises the possibility that a key economic region may declare independence from Spain. The Bank of Spain warned of a deep recession.
In the meantime, the market continues to await word on whether Spain will announce a bailout, and there's speculation that the country may delay a request until Italy is also forced to seek aid. That would allow Spain to have more bargaining power and suffer less political stigma.
Spanish bond yields are making a delay more difficult, however, rising this morning by 21 basis points on the 10-year government bond to 5.922 per cent.
Thursday should bring more key news for the country, as it announces its 2013 budget and an economic plan.
The global stock sell-off began Tuesday after Federal Reserve member Charles Plosser suggested that quantitative easing may not be successful in helping the U.S. economy grow.
North American futures this morning are lower, but just modestly. There is hope that more U.S. home sales data today, to be released at 1000 a.m. (ET), will continue to point to a recovery and spark some optimism amid the gloomy developments in Europe.
Now, here's the rundown of what else you need to know as the investing day gets underway.
MARKETS:
Equities:
Futures: Dow -0.03 per cent, S&P 500 -0.05 per cent, Nasdaq -0.12 per cent
Hong Kong's Hang Seng index -0.82 per cent
Shanghai Composite index -1.25 per cent
Japan's Nikkei -2.03 per cent
London's FTSE 100 -1.16 per cent
France's CAC 40 -2.02 per cent
Germany's DAX index -1.56 per cent
Commodities:
WTI (Nymex Nov) -0.73 per cent at $90.70 (U.S.) a barrel
Gold (Comex Dec) -0.01 per cent at $1,766.40 (U.S.) an ounce
Copper (Comex Dec) -1.02 per cent at $3.72 (U.S.) a pound
Currencies:
Canadian dollar down 0.0006, or 0.06 per cent, at $1.0195 (U.S.)
STOCKS AND ECONOMIC INDICATORS TO WATCH:
(1000 a.m. ET) The U.S. Commerce Department reports on new home sales in August. Economists expect 380,000 annualized sales.
Onex Corp. is leading a $718-million deal to acquire a 4,000-employee German manufacturing company, the first European investment for the Toronto-based company's flagship private equity fund.
RadioShack said CEO James Gooch has agreed to step down immediately and is leaving its board of directors. The stock is up nearly 5 per cent in the premarket.
Earnings include AGF Management Ltd.
THIS MORNING'S TOP READS ON THE WEB:
Research In Motion is dangerously close to a distinction that few companies achieve: trading for less than its net current asset value.
Google's recent rally has catapulted the stock in the ranks of the biggest U.S. companies. It's now the fifth largest firm by market cap, ahead of General Electric, and is closing in on Microsoft, too.
.... So why is Google stock soaring to record highs? Just look at the cash flows.
... but just under a quarter of Google Android users are looking to switch to an Apple iPhone, according to a market research specialist.
Since mid-July, gold miner ETFs have been beating physically held funds like GLD handily. So what's going on?
A careful market analysis of the last three decades suggests that the Dow Jones Transportation Average is not the leading indicator that so many think it is.
Four common trading mistakes and how to avoid them.
General Motors has shed its legacy costs. So why is its market share still declining?
Four bullish U.S. stock charts worth watching.
Darcy Keith