With little to ignite the bulls this morning, North American stock markets appear set to start the trading day as they ended off on Tuesday -- mildly in the red.
The real fireworks will likely have to wait until Thursday's ECB meeting at which bank president Mario Draghi is expected to announce a bond-buying program to help countries such as Spain and Italy to lower their borrowing costs. This will be followed up by Friday's key U.S. jobs report.
The news overnight wasn't encouraging. The Purchasing Managers' Index in the euro zone fell even further in August for its seventh straight month of contraction, indicating the region is likely to have slipped back into recession in the current quarter.
Here at home, currency and bond markets will be the ones to watch today. The Canadian dollar is down about two-tenths of a cent this morning in a rather muted reaction to the separatist Parti Québécois winning the provincial election. With only a minority win, currency traders are assuming the win poses little political risk in Canada.
At 9 a.m. (ET), the Bank of Canada announces its interest rate decision. It'll most likely hold the benchmark overnight rate at 1 per cent, but as Michael Babad points out in today's top business stories, the question is whether Governor Mark Carney and his colleagues change their signal that the next move in the overnight rate will be up, rather than down.
Indications the next move is up could add some fuel to the loonie's rise above parity.
Now, here's the run down of what else you need to know as the investing day gets underway.
MARKETS:
Equities:
Futures: Dow -0.2 per cent, S&P 500 -0.2 per cent, Nasdaq -0.2 per cent
Hong Kong's Hang Seng index -1.4 per cent
Shanghai Shenzhen CSI 300 -0.2 per cent
Japan's Nikkei -1.1 per cent
London's FTSE 100 -0.2 per cent
France's CAC 40 +0.1 per cent
Germany's DAX index +0.6 per cent
Commodities:
WTI (Nymex Oct) -0.2 per cent at $95.05 (U.S.) a barrel
Gold (Comex Dec) -0.1 per cent at $1,693.40 (U.S.) an ounce
Copper (Comex Dec) -0.2 per cent at $3.46 (U.S.) a pound
Currencies:
Canadian dollar down 0.0025, or 0.2 per cent, at 1.0118 (U.S.)
STOCKS AND ECONOMIC INDICATORS TO WATCH:
Facebook Inc. shares are enjoying a rare rally, rising 3.6 per cent in the pre-market at $18.37 (U.S.), after news late Tuesday that CEO Mark Zuckerberg and two company directors do not plan to sell any of their shares following the expiration of a lockup period. Facebook also promised not to sell stock to cover a nearly $2-billion tax bill.
FedEx is down 3.2 per cent at $84.74 in the pre-market after late Tuesday lowering its first-quarter earnings outlook to between $1.37 a share and $1.43 a share, citing a weak global economy pressuring express service revenues. Analysts expected earnings of $1.56 a share.
Nokia plans to unveil its new line of smartphones with Microsoft's Windows Phone 8 today, as well as disclosing a new strategic direction to gain back market share.
Among companies reporting earnings are: Alimentation Couche-Tard Inc.; Dollar General Corp.; H&R Block Inc.; Harry Winston Diamond Corp.; and Major Drilling Group International Inc.
THIS MORNING'S TOP READS ON THE WEB:
A Goldman Sachs' equity strategist is predicting a big sell-off in the stock market within 10 days. He thinks the market is going to be disappointed with upcoming meetings of the Federal Reserve and the European Central Bank.
Even though the odds point to a down September for stocks, the market most likely will be higher at year-end than it is today, suggests Marketwatch's Mark Hulbert after crunching September to December data since 1896.
For the second straight week, bears outnumbered bulls by a 10+ percentage point margin in Bespoke Investment Group's weekly Bespoke Market Poll, which asks whether the S&P 500 will be higher or lower one month from now.
When it comes to Apple's iPhone, forget the old adage "buy the rumour, sell the fact." The stock has historically risen in the five days after a new iPhone product announcement. Apple is expected to make the announcement on the iPhone 5 on Sept. 12.
... Meanwhile, leaked images are showing off Apple's latest mini tablet for the first time, according to the Daily Mail.
Pimco's Bill Gross earned his reputation as a star fund manager by easily beating U.S. bond indexes over the long term. From frequent trading to leveraging, here's how he did it
U.S. hedge funds were up 0.5 per cent for the month of August, according to numbers compiled by Hedge Fund Research, and up about 2.23 percent for the year. Those modest, if positive, returns, reflected a decline in the overall appetite for risk.
... Speaking of which, a study has found that Canada's hedge funds and mutual funds produced almost the same returns in bull markets. But hedge funds here are markedly superior to mutual funds in level or bearish markets.
Darcy Keith