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Premarket: Stock futures edge higher as 'fiscal cliff' deadline nears

The continued lack of progress in heading off the "fiscal cliff" of tax hikes and spending cuts set to take hold in less than a day is giving investors little reason to celebrate this New Year's Eve. But so far this morning, markets are putting on a brave face, with U.S. stock futures slightly higher and overseas markets mixed.

Weekend talks failed to produce any breakthroughs in the U.S. negotiations. U.S. Senate Majority Leader Harry Reid said Sunday that there are still "significant differences" between Democrats and Republicans. He rejected the latest Republican offer to resolve the deadlock in Washington as Mitch McConnell, the top Republican in the Senate, appealed to Vice President Joe Biden to try to break the impasse. The Senate is expected to resume meeting today at 11 a.m. (ET.)

Republicans have been extremely reluctant to allow any tax increases unless they are accompanied by other concessions on the spending side that Democrats are fighting hard against.

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Although legislation can be passed well into the new year that can offset some of the impact of the "fiscal cliff" that threatens to push the U.S. economy back into recession, the uncertainty over how and when a deal will materialize is keeping traders highly cautious.

Elsewhere, China is ringing in 2013 with considerable optimism about the year ahead. The Shanghai composite index rose 1.6 per cent overnight to a six-month high after fresh data from HSBC and Markit showed that the nation's factory activity hit a 19-month high in December. The year's final purchasing managers' index hit 51.5, up from 50.5 in November when the figure returned to growth after 12 consecutive months of contraction.

The data is helping copper to chalk up gains this morning, which, in addition to some modest strength in gold, should help bolster the materials sector of the TSX.

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

MARKETS:

Equities:

U.S. futures: S&P 500 +0.9 per cent; DJIA +0.7 per cent; Nasdaq +0.6 per cent

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Hong Kong's Hang Seng index -0.04 per cent

Shanghai composite index +1.60 per cent

Japan's Nikkei (closed)

London's FTSE 100 -0.46 per cent

Germany's DAX -0.57 per cent

France's CAC 40 +0.57 per cent

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Commodities:

WTI (Nymex Feb) -0.41 per cent at $90.43 (U.S.) a barrel

Gold (Comex Feb) +0.35 per cent at $1,661.70 (U.S.) an ounce

Copper (Comex Mar) +0.46 per cent at $3.61 (U.S.) a pound

Currencies:

Canadian dollar up 0.0020, or 0.20 per cent, at 1.0054 (U.S.)

ECONOMIC INDICATORS TO WATCH:

No major reports scheduled

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THIS MORNING'S TOP INVESTING READS ON THE WEB:

Barron's suggests it's a good time to buy Apple shares.

Why Microsoft may be a classic 'value trap'

Bloomberg Businessweek's list of the best and worst investments of 2012.

Tickers that the StockTwits community has swarmed around over the past year. Some of the tickers are hugely popular while others are stocks and stories you might have missed with little mainstream media coverage even as they captured the energy of real market participants.

If you throw out the three-times leveraged exchange-traded stuff that plunges as quickly next year as it rose this year, you end up with a home-construction ETF as the top performer of 2012.

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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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