Earnings season is in full swing today in the U.S., an onslaught of profit and revenue figures and fourth-quarter guidance that so far is showing that the corporate sector is holding up well amid a cloudy macroeconomic picture.
Several components of the Dow Jones industrial average are reporting their third-quarter results today. Goldman Sachs and Johnson & Johnson are among companies that have beat analysts' forecasts.
As of Monday, nearly 59 per cent of the 34 S&P 500 companies that reported their third-quarter results so far beat earnings expectations, according to Thomson Reuters data. About 24 per cent came in below forecasts and almost 18 per cent reported earnings in line with consensus. But outlooks for the fourth quarter have been more negative than positive.
(For a run down of companies reporting today and results so far, see stocks and economic indicators to watch below.)
For now, U.S. futures suggest North American stocks are heading for gains at the open, and the TSX should benefit as well from commodity prices that are edging up this morning.
A report in the Financial Times is also drawing attention. The newspaper reported that the Spanish government is prepared to make a rescue request that would allow the European Central Bank to begin buying its debt, seen as the next key step for Europe to pull itself out of its financial crisis. But the report also said the request is being delayed by concerns over what impact it would have on other euro zone members such as Italy.
On the domestic front, Statistics Canada reported much-stronger-than-expected manufacturing shipments for August. The loonie is down about two-thirds of a cent.
Now, here's the rundown of what else you need to know before the trading day gets underway:
MARKETS:
Equities:
Futures: Dow +0.4 per cent, S&P 500 +0.4 per cent, Nasdaq +0.5 per cent
Hong Kong's Hang Seng index +0.28 per cent
Shanghai composite index +0.01 per cent
Japan's Nikkei +1.43 per cent
London's FTSE 100 +0.99 per cent
France's CAC 40 +1.02 per cent
Germany's DAX index +1.21 per cent
Commodities:
WTI (Nymex Dec) +0.24 per cent at $92.54 (U.S.) a barrel
Gold (Comex Dec) +0.40 per cent at $1,744.60 (U.S.) an ounce
Copper (Comex Dec) +0.38 per cent at $3.72 (U.S.) a pound
Currencies:
Canadian dollar down 0.0068, or 0.66 per cent, at $1.0124 (U.S.)
STOCKS AND ECONOMIC INDICATORS TO WATCH:
Statscan said manufacturing shipments rose 1.5 per cent in August from July, well ahead of economists' expectations for a monthly increase of 0.4 per cent.
Statistics Canada said foreigners bought $6.90-billion of Canadian securities in August, while Canadians sold $1.69-billion of foreign securities.
The U.S. Commerce Department said consumer prices rose 0.6 per cent in September, unchanged from the previous month and close to expectations for a 0.5 per cent gain. Higher energy prices were largely behind the increase.
The U.S. Federal Reserve Board said industrial production rose 0.4 per cent in September, double the increase that was expected. Capacity utilization was as expected at 78.3 per cent.
(1000 a.m. ET) The National Association of Home Builders releases its U.S. housing market index for October. Economists expect a reading of 41.
Citigroup said Vikram Pandit is stepping down its CEO, to be replaced by Michael Corbat. COO John Havens also quit. Shares are down 3 per cent in the premarket.
Goldman Sachs reported third-quarter net earnings of $2.85 (U.S.) a share, compared to a loss of 84 cents a year ago, and beating expectations for $2.19 in profit. Shares are up 0.4 per cent in the premarket.
Coca-Cola Co reported quarterly earnings in line with Wall Street estimates, but revenue fell slightly short, and its shares fell nearly 1 per cent in premarket trading.
Johnson & Johnson said its third-quarter profit, excluding one-time charges, were $1.25 per share. Revenue rose 6.5 per cent to $17.05 billion. That beat Wall Street expectations for $1.21 per share on revenue of $17.01 billion and shares are up 1 per cent in the premarket.
UnitedHealth Group reported third-quarter earnings of $1.50 a share, up from $1.17 a year ago, and exceeding forecasts of $1.31. The stock is up 2.5 per cent in the premarket.
Mattel Inc. reported earnings of $1.04 a share, up from 86 cents a year ago, and beating expectations for 99 cents in profit. Shares are up 5 per cent in the premarket.
Other earnings to come include: Apollo Group Inc., CSX Corp., Intel Corp., and International Business Machines Corp.
Murphy Oil said it will spin off to its shareholders its U.S. refining and marketing unit, Murphy Oil USA. Shares are surging 7 per cent in the premarket.
Harry Winston Diamond said the 2012 production target for the Diavik mine has been reduced to 7.4 million carats from the last estimate of 8 million.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
U.S. high yield bonds have been seeing "bubble-like" inflows. Be careful if you're thinking of joining this party.
....Meanwhile, First Trust announced plans for an actively managed long/short exchange-traded fund focused on high-yield, mostly U.S., corporate debt.
Interest to short stocks on the NYSE has fallen to a five-month low.
10 signs that the stock market rally of recent months isn't over.
Barry Ritholtz's 12 rules of investing.
Darcy Keith