Stock futures suggest the U.S. and Canadian major indexes will slip well into the red at the open, as surprisingly weak Japanese gross domestic product figures today have served as a reminder that the global economic recovery is still on shaky grounds.
On the TSX, BlackBerry Ltd. will be a major focus. The company officially put itself on the auction block today, announcing a special committee to explore "strategic alternatives." The smartphone manufacturer said in a statement the committee's direction could include "possible joint ventures, strategic partnerships or alliances, a sale of the company or other possible transactions." Shares have resumed trading in the U.S. premarket after earlier being halted, with the stock up about 7 per cent.
Overseas markets are mixed, with major European indexes lower, while Chinese stocks rallied overnight. Gold is up about 1 per cent and trading near one-month highs.
Japan's GDP rose 2.6 per cent in the second quarter, well below the 3.6 per cent figure economists were looking for. The report raised speculation that the Bank of Japan could further ease monetary policy in the second half of this year or announce new stimulus measures. The yen fell 0.5 per cent to 96.71 per U.S. dollar after the report, which helped to ease the pressure on the Nikkei, which closed down 0.7 per cent. A weaker yen is helpful for the country's huge export sector. The weaker GDP report has also created speculation that the government will delay plans for a significant sales tax hike later this year.
Chinese stocks rose more than 2 per cent, with traders' spirits there still buoyed by better-than-expected trade and industrial production reports earlier this month that pointed to a possible bottoming out of the country's recent slowdown in economic growth. There was also a report in the South China Morning Post out of Hong Kong today that suggested Beijing was quietly offering financial stimulus to key cities and provinces to support local economies.
Most major commodities are flat so far today, but gold is seeing good gains as the widely held SPDR Gold Trust Fund last week saw an increase in its holdings for the first time in June - a signal that bullion may be regaining some its investment appeal.
Now, here's a closer look at what's going on and what's to come later today.
MARKETS:
Equities:
Futures: S&P 500 -0.50 per cent; Dow -0.40 per cent; Nasdaq -0.47 per cent; S&P Toronto -0.50 per cent
Hong Kong's Hang Seng +2.13 per cent
Shanghai composite index +2.38 per cent
Japan's Nikkei -0.71 per cent
London's FTSE 100 -0.29 per cent
Germany's DAX -0.76 per cent
France's CAC 40 -0.41 per cent
Commodities:
WTI crude oil (Nymex Sep) +0.04 per cent at $106.01 (U.S.) a barrel
Gold (Comex Dec) +1.06 per cent at $1,326.10 (U.S.) an ounce
Copper (Comex Sep) -0.09 per cent at $3.30 (U.S.) a pound
Currencies:
Canadian dollar at 97.01 (U.S.), versus 97.14 at Friday's North American close.
U.S. dollar index up 0.23 at 81.36
Bonds:
U.S. 10-year Treasury yield 2.59 per cent, up 0.01
ECONOMIC INDICATORS TO WATCH:
No major reports scheduled.
STOCKS TO WATCH:
BlackBerry Ltd. shares are up 7 per cent in the U.S. premarket. The company announced it has formed a special committee to explore strategic alternatives "to enhance value and increase scale in order to accelerate BlackBerry 10 deployment." These alternatives could include possible joint ventures, strategic partnerships or alliances, a sale of the company or other possible transactions.
The AllThingsD blog is quoting unnamed sources as saying Apple will unveil its latest iPhone on Sept. 10. Also, analysts at Needham cut their target on Apple today to $595 from $710, citing an increasingly competitive environment for smartphones.
Earnings today include Alterra Power Corp.; Fortuna Silver Mines Inc.; Magellan Aerospace Corp.; Total Energy Services Inc.; BNC Bancorp; and Iamgold Corp.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
Why your bond ETF is probably not losing as much money as you think.
Marc Faber - who overall is expecting a market crash this year - is quite bullish on gold stocks right now - and likes three bullion gold miners in particular.
There are almost no true stock bears among U.S. strategests any more, and that is worrisome.
The CEO of Brookfield Asset Management is very bullish on American stocks right now.
14 of 15 of the most popular valuation metrics suggest the S&P 500 is fair to undervalued.
Successful market timing is an urban legend.
-----
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.
Darcy Keith