Surprisingly strong trade statistics out of China overnight has copper on the rebound this morning, pointing to gains later today in the resource sector of the TSX. Overall, stock futures suggest a flat to modestly higher opening in the U.S. and Canadian major indexes this morning.
Chinese exports jumped 5 per cent in July, beating market forecasts for a rise of 3 per cent, while imports surged 10 per cent - far surpassing economists' expectations for a 2 per cent boost.
The data indicate that domestic demand in the Chinese economy - which is key for the consumption of hard assets such as base metals - may be starting to pick up steam again. That has some market participants hoping that the slowdown in the growth of the Chinese economy may have bottomed out and may re-accelerate in the second half of this year. This is the second report this week to provide such optimism; China released stronger-than-expected figures on service sector activity a few days ago.
Copper is up more than 3 per cent to a nearly two-month high.
Japanese stocks overnight saw more losses after plunging 4 per cent on Wednesday. The Bank of Japan announced no changes to its monetary policy during Asian trading hours, which was widely expected. But the bank caught the market's attention by appearing content to support the Japanese government's plan for a tax hike early next year, which some worry could hold back the economic recovery.
European stocks this morning are higher despite the European Central Bank cutting its growth forecasts for the euro zone today. It now sees the region suffering an economic contraction of 0.6 per cent this year, instead of its previous view of 0.4 per cent. But it still expects a gradual recovery in the rest of this year and lasting into 2014.
Today is a big day for Canadian corporate earnings - and most stocks beat Street expectations. We detail many of those, and what else is going on this morning, below.
MARKETS:
Equities:
Futures: S&P 500 +0.33 per cent; Dow +0.32 per cent; Nasdaq +0.39 per cent; S&P Toronto -0.06 per cent
Hong Kong's Hang Seng +0.31 per cent
Shanghai composite index -0.09 per cent
Japan's Nikkei -1.58 per cent
London's FTSE 100 +0.35 per cent
Germany's DAX +0.42 per cent
France's CAC 40 +0.38 per cent
Commodities:
WTI crude oil (Nymex Sep) -0.15 per cent at $104.21 (U.S.) a barrel
Gold (Comex Dec) +0.34 per cent at $1,289.70 (U.S.) an ounce
Copper (Comex Sep) +3.09 per cent at $3.27 (U.S.) a pound
Currencies:
Canadian dollar at 96.08 (U.S.), versus 95.94 at yesterday's North American close.
U.S. dollar index down 0.13 at 81.14
Bonds:
U.S. 10-year Treasury yield 2.60 per cent, down 0.04
ECONOMIC INDICATORS TO WATCH:
U.S. jobless claims last week rose 5,000 to 333,000, a better reading than the 336,000 that economists expected.
Canada's new housing price index rose 1.8 per cent in June, a little higher than economists' forecasts for 1.7 per cent.
STOCKS TO WATCH:
Manulife reported adjusted earnings of 31 cents, 1 cent below the Street consensus.
Tim Hortons Inc. has amended its normal course issuer bid and can now repurchase up to 10 per cent of its common shares. It also posted a jump in second-quarter profit to 81 cents a share from 69 cents a year earlier.
BCE Inc. boosted its financial guidance for 2013 as it reported a second-quarter profit of $571 million that fell 22 per cent from the same period last year. The EPS beat Street forecasts by a penny.
Quebecor Inc. reported adjusted earnings of 85 cents per share in its latest quarter, up from 72 cents per share.
Canadian Natural Resources Ltd said adjusted net earnings in the second quarter totalled 42 cents per share, up from 82 cents a year ago.
Cineplex Inc. reported a $28.5-million profit, up 36 per cent from a year earlier, and its revenue beat market expectations.
Canadian Tire Corp. reported a 16 per cent rise in second-quarter profit, beating Street estimates.
Groupon shares are up 22 per cent in the premarket after announcing a share buyback plan late Wednesday and reporting better-than-expected quarterly earnings.
Tesla Motors Inc. shares are up 16 per cent in the premarket after its earnings blow past estimates late on Wednesday.
Other earnings today include: Allied Properties; Cascades; CI Financial; Dundee REIT; Extendicare Inc.; Finning International; Penn West Petroleum; Telus; Yellow Media; Cogent Communications Group Inc.; Elizabeth Arden Inc.; Orbitz Worldwide Inc.; Gap Inc.; and T-Mobile US Inc.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
Some useful investing tips from the new book, Trading: The Best of the Best.
Why housing stocks are diverging from the rebound in U.S. home prices.
Some Wall Street pros believe the stock market has experienced the sort of decisive, powerful liftoff from a generational low that should last for years to come, making every setback to come a buying chance.
The U.S. continues to take the lead in global stock market gains.
The science behind the Netflix algorithms that decide what you'll watch next.
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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.
Darcy Keith