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Premarket: TSX set to rise as commodities firm

Markets are steady this morning in rather subdued activity, as traders absorb some key corporate earnings and the latest inflation figures from the U.S. Most major commodities are trending up, suggesting the resource-heavy TSX could open with gains.

While Asian markets edged up overnight, European equities are trending in the opposite direction after a German economic sentiment survey unexpectedly declined in July. The ZEW Center for European Economic Research said its index of investor and analyst expectations dropped to 36.3 from 38.5 in June, the first decline in three months and below the 40 reading that was expected.

In other European data, the euro zone's trade surplus widened in May from a year earlier, driven mainly by falling imports rather than export growth. And the annual inflation rate in June for the region rose to 1.6 per cent from 1.4 per cent in May.

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So far, the U.S. corporate earnings season has been favourable overall, with 73 per cent of S&P 500 companies that have reported results prior to today beating analysts' forecasts, according to Bloomberg data.

We detail today's key earnings and economic reports, and much more, in our morning rundown below.

MARKETS:

Equities:

Futures: S&P 500 -0.04 per cent; Dow -0.02 per cent; Nasdaq +0.07 per cent; TSX Toronto +0.39 per cent

Hong Kong's Hang Seng +0.04 per cent

Shanghai composite index +0.32 per cent

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Japan's Nikkei +0.64 per cent

London's FTSE 100 +0.06 per cent

Germany's DAX -0.40 per cent

France's CAC 40 -0.61 per cent

Commodities:

WTI crude oil (Nymex Sep) +0.5 per cent at $106.51 (U.S.) a barrel

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Gold (Comex Aug) +0.6 per cent at $1,291.40 (U.S.) an ounce

Copper (Comex Sep) +0.7 per cent at $3.17 (U.S.) a pound

Currencies:

Canadian dollar at 96.02 (U.S.), unchanged from Monday's North American close.

U.S. dollar index down 0.29 at 82.74

Bonds:

U.S. 10-year Treasury yield 2.56 per cent, down 0.04

ECONOMIC INDICATORS TO WATCH:

The U.S. Bureau of Labour Statistics said consumer prices in June rose 0.5 per cent from May, a touch above the analyst consensus of 0.4 per cent. Excluding volatile food and energy costs, inflation rose 0.2 per cent, matching the Street view.

Canadian factory sales in May advanced 0.7 per cent. Economists were anticipating a gain of 0.8 per cent.

(915 a.m. ET) U.S. industrial production for June. Economists expect a rise of 0.2 per cent from May, with a capacity utilization rate of 77.7 per cent.

(10 a.m. ET) The National Association of Home Builders housing market index is released, expected to stay at a reading of 52.

STOCKS TO WATCH:

Goldman Sachs reported second-quarter profit of $3.70 a share, beating analysts' forecasts of $2.83. Revenue of $8.6-billion also beat forecasts for $8-billion. Shares are up 1.2 per cent in the premarket.

Johnson & Johnson earned $1.48 per share on an adjusted basis, beating the Street view of $1.39. Shares are up 0.7 per cent in the premarket.

Coca-Cola Co. said its adjusted earnings were 63 cents per share, in line with the average analyst estimate, as revenues dropped 3 per cent to $12.75-billion. Shares are down nearly 3 per cent in the premarket.

Other earnings today include: Charles Schwab Corp.; Mosaic Co. and Yahoo! Inc.

THIS MORNING'S TOP INVESTING READS ON THE WEB:

Does 'smart beta' really beat cap-weighting?

ETF investors are turning to short-term junk bonds as a way to balance the risk of higher rates with the desire for high yield.

China is a case in point that great GDP doesn't mean a great stock market.

Railway stocks could be on the verge of a breakout to new multi-year highs.

When it comes to U.S. Federal Reserve bond-buying tapering, global markets are all reacting in sync, as this chart shows.

The pressure is on Bill Ackman to score this week.

The price of U.S. ethanol credits has notched a new high as oil companies scramble to comply with a biofuels mandate that Washington has given no hint of easing.

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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. You can also be notified using our dashboard feature when new articles appear from this author. Read more on using this feature here.

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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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