Global stock markets and U.S. index futures are modestly higher this morning, suggesting that the winning streak in equities is likely to stretch into a sixth day.
There's a wild card today, however, that could shake up markets in either direction. The Federal Reserve will announce its latest decision on interest rates this afternoon, as well as its projections on the U.S. economy. Chairman Ben Bernanke will also hold a news conference.
Key to all this will be the Fed's latest quantitative easing plans. The market expects the Fed will announce about $45-billion (U.S.) in monthly medium- to long-dated Treasury purchases, in addition to its program to buy $40-billion in mortgage bonds each month.
Markets will therefore be sensitive to the Fed announcing Treasury purchases below the consensus view of $45-billion, or any hints that Mr. Bernanke is altering his outlook for how long quantitative easing measures will continue. So far, he has given no clear end date.
Fiscal cliff negotiations, meanwhile, may continue to sway market sentiment today. President Barack Obama reportedly has reduced his demand for tax increases in a new budget to $1.4-trillion from $1.6-trillion as talks continued Tuesday with House Speaker John Boehner.
There are strong indications that the talks are going to go down to the wire, with Senate Majority Leader Harry Reid stating Tuesday that it was unlikely a deal could be reached before Christmas. More than $600-billion (U.S.) in spending cuts and tax hikes are scheduled to kick in at the start of 2013 unless a deal is reached. A major area of friction in the talks now appears to be whether a deal should include an increase in the debt limit - and by how much.
There was more dismal news out of Europe overnight, although investors are pretty used to that by now. Industrial production in the euro zone fell 1.4 per cent in October, new figures revealed. Many economists were expecting modest growth.
Now, here's a look at what else you need to know this morning.
MARKETS:
Equities:
U.S. futures: S&P 500 +0.2 per cent; DJIA +0.1 per cent; Nasdaq +0.3 per cent
Hong Kong's Hang Seng index +0.80 per cent
Shanghai composite index +0.40 per cent
Japan's Nikkei +0.58 per cent
London's FTSE 100 +0.20 per cent
Germany's DAX +0.24 per cent
France's CAC 40 -0.14 per cent
Commodities:
WTI (Nymex Jan) +0.56 per cent at $86.27 (U.S.) a barrel
Gold (Comex Feb) +0.32 per cent at $1,715.00 (U.S.) an ounce
Copper (Comex Mar) +0.54 per cent at $3.71 (U.S.) a pound
Currencies:
Canadian dollar up 0.0004, or 0.04 per cent, at 1.0146 (U.S.)
STOCKS AND ECONOMIC INDICATORS TO WATCH:
(1230 p.m. ET) The U.S. Federal Reserve Board makes its interest rate announcement. Economists expect the rate to remain unchanged at 0.25 per cent.
(200 p.m. ET) U.S. Fed releases its latest economic forecasts, followed by a press conference with Chairman Ben Bernanke at 215 p.m.
Shares of rare-earth producer Molycorp Inc. will come under pressure after it said late Tuesday that CEO Mark Smith has left the company.
Costco Wholesale Corp. shares are up 0.3 per cent in the premarket after it reported a 30 per cent surge in quarterly earnings.
DuPont Co. shares should rise today after the chemical maker announced a share buyback and forecast 2012 earnings to come in at the high end of expectations.
Other earnings today include Whistler Blackcomb Holdings Inc.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
Barron's 10 favourite stock picks for 2013.
After a decade of navigating a massive patent cliff, Big Pharma firms are reaching the other side with rich dividend yields and opportunities for growth.
Why Facebook's much-touted 1 billion users may be less than 500 million.
Why Apple CEO Tim Cook is suddenly talking to media.
Strategists and economists at Bank of America Merrill Lynch laid out their vision of 2013 on Tuesday, and it includes much to tantalize investors.
Ten of the most overlooked ETFs, according to indexuniverse.com.
China's money supply growth is arguably the best leading indicator for Canadian mining stock performance. It fell short of expectations this week. But is this really bad news for miners?
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The premarket report is constantly updated to reflect the latest news developments and market moves. For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities
Darcy Keith