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Premarket: Apple under pressure after Citi downgrade

U.S. stock index futures are a little higher this morning, with overseas markets mixed, pointing to another cautious day of trading as the deadline nears to avoid the U.S. "fiscal cliff."

Apple shares are under pressure again after Citigroup downgraded the tech giant to "neutral" and cut its price target. Shares earlier this morning were down more than 2 per cent, but have since bounced back, last trading in the premarket up 0.5 per cent at $512.68 (U.S.)

There were hints of progress in the budget negotiations over the weekend. House Republican leader John Boehner reportedly told President Barack Obama that he might accept higher taxes on millionaires in exchange for scaling back spending for entitlement programs such as Medicare. While that may be the first time the Republicans expressed a willingness to raise taxes, the White House has been pressing for tax increases for individuals making more than $200,000.

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There's only about two weeks remaining to reach a budget deal that would avert the more than $600-billion in tax hikes and spending cuts set to take hold at the start of next year. But there is also now increasing talk in Washington about the benefits of extending the talks into January.

Japan was in the spotlight overnight after the Liberal Democratic Party decisively won weekend elections. That's expected to usher in new monetary easing and economic stimulus measures in the country. The Nikkei rose to its highest in eight months and the yen fell against the greenback.

Now, here's a look at what else you need to know this morning.

MARKETS:

Equities:

U.S. futures: S&P 500 +0.4 per cent; DJIA +0.2 per cent; Nasdaq +0.4 per cent

Hong Kong's Hang Seng index -0.41 per cent

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Shanghai composite index +0.44 per cent

Japan's Nikkei +0.94 per cent

London's FTSE 100 -0.54 per cent

Germany's DAX -0.01 per cent

France's CAC 40 -0.36 per cent

Commodities:

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WTI (Nymex Feb) -0.01 per cent at $87.24 (U.S.) a barrel

Gold (Comex Feb) -0.20 per cent at $1,693.60 (U.S.) an ounce

Copper (Comex Mar) -0.54 per cent at $3.67 (U.S.) a pound

Currencies:

Canadian dollar down 0.0027, or 0.26 per cent, at 1.0130 (U.S.)

ECONOMIC INDICATORS TO WATCH:

Statistics Canada reported on international securities transactions in October. Foreigners bought $13.26-billion of Canadian securities, while Canadians bought $3.19-billion of foreign securities.

The Canadian Real Estate Association said sales over the Multiple Listing Service fell 1.7 per cent in November from October, with activity last month coming in 11.9-per-cent lower than last November. It lowered its sales forecast for this year and 2013.

STOCKS TO WATCH:

Apple shares are up 0.5 per cent in the premarket after Citigroup downgraded the company to "neutral" late Sunday and cut his price target to $575 from $675 (U.S.). Citigroup is questioning the strength of the iPhone 5 launch.

Sun Life Financial has agreed to sell its U.S. annuity unit and certain life insurance businesses for $1.35-billion (U.S.) to Delaware Life Holdings, a company owned by shareholders of Guggenheim Partners.

First Quantum Minerals Ltd. has made a hostile, but improved, takeover bid for Inmet Mining, now offering to buy the company at $72 per share, up from $70.

Sprint Nextel said it reached a deal to buy out the minority shareholders of Clearwire for $2.2-billion, or $2.97 a share, up from $2.90. Sprint shares are up 2.5 per cent in the premarket; Clearwire is down 8.6 per cent.

Earnings today include Patheon Inc.

THIS MORNING'S TOP INVESTING READS ON THE WEB:

A top in the stock market may be closer than you think, based on an analysis that looks at the relative performance of the market's various sectors prior to tops.

Three unloved, but financially sound, dividend companies to watch in 2013.

Bottom fishing in Chinese equities is only advisable via larger-cap Chinese shares that are undisputed leaders in their industries and can survive any further slowdown should Q3's stabilization turn out to be a false dawn. Some companies that fit the bill.

Emerging markets have staged a late-year comeback and may just outperform the S&P 500 for the year.

Was Benjamin Graham skillful or lucky?

Why Wal-Mart will be hurt by the fiscal cliff.

The key differences between Apple CEOs Steve Jobs and Tim Cook.

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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

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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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