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Premarket: Stock futures higher after Nikkei surges

Stocks are aiming for a higher opening in North America this morning, encouraged by stronger Asian and European markets overnight and generally favourable news on the macroeconomic front.

The Nikkei shot up 2.5 per cent as the Japanese yen weakened about 1 per cent against the U.S. dollar amid a newspaper report that Prime Minister Shinzo Abe is considering a corporate tax cut if he proceeds with a planned increase in sales taxes. On Monday, Japan released gross domestic product figures that were well short of economists' forecasts, throwing into question whether the tax hike will proceed.

In Europe, German investor confidence rose more than forecast, lending further confidence to investors that the euro zone is pulling out of its deep recession and leaving stock bargains in its wake. The ZEW Center for European Economic Research's index of investor and analyst expectations increased to 42 in August, well ahead of forecasts for 39.9.

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U.S. retail sales for July came in a little weaker than expected, and stock futures came off their highs.

Trading volumes are likely to stay on the thin side - especially given that the second-quarter earnings season is largely over - with many market players enjoying their holidays this month.

Now, here's a closer look at what's going on and what's to come later today.

MARKETS:

Equities:

Futures: S&P 500 +0.28 per cent; Dow +0.35 per cent; Nasdaq +0.32 per cent; S&P Toronto +0.19 per cent

Hong Kong's Hang Seng +1.21 per cent

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Shanghai composite index +0.22 per cent

Japan's Nikkei +2.57 per cent

London's FTSE 100 +0.60 per cent

Germany's DAX +0.80 per cent

France's CAC 40 +0.35 per cent

Commodities:

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WTI crude oil (Nymex Sep) +0.60 per cent at $106.75 (U.S.) a barrel

Gold (Comex Dec) -0.54 per cent at $1,327.00 (U.S.) an ounce

Copper (Comex Sep) +0.97 per cent at $3.34 (U.S.) a pound

Currencies:

Canadian dollar at 96.92 (U.S.), versus 97.06 at yesterday's North American close.

U.S. dollar index up 0.23 at 81.56

Bonds:

U.S. 10-year Treasury yield 2.66 per cent, up 0.03

ECONOMIC INDICATORS TO WATCH:

U.S. retail sales for July rose 0.2 per cent, a little weaker than estimates for a gain of 0.3 per cent. June retail sales were revised higher to 0.6 per cent from 0.4 per cent.

(10 a.m. ET) U.S. to release business inventories for June, forecast to rise 0.2 per cent from the previous month.

STOCKS TO WATCH:

J.C. Penney Co. Inc. said activist investor Bill Ackman, who has been pressuring the struggling department store operator to oust its chairman and chief executive, has resigned from the board. Shares are up 2.3 per cent in premarket trading.

BlackBerry Ltd. shares are up 1 per cent in the U.S. premarket following their nearly 11 per cent rally on Monday after the company announced it was considering strategic alternatives, including putting the company up for sale.

Apple Inc. shares are up 0.6 per cent in the premarket after rising nearly 2.8 per cent on Monday after reports surfaced the company will soon release its new iPhone.

The Toronto Star, owned by Torstar Corp., has begun charging a fee for non-subscribers who access its web site more than 10 times a month.

Earnings today include: Nautilus Minersals Inc. and Peyto Exploration.

THIS MORNING'S TOP INVESTING READS ON THE WEB:

Oracle CEO Larry Ellison is hinting Apple is doomed without Steve Jobs.

Bearish sentiment among U.S. investors is almost non-existent these days.

Bond investors trying to divine when the Federal Reserve will reduce its unprecedented monetary stimulus are increasingly looking to the riskiest parts of the debt market, which are booming like before the financial crisis.

The strength of the major indexes are defying the climate of declining earnings.

How will the new iPhones be priced?

Free online fitness trackers are taking a bite out of profits at companies like Weight Watchers and Jenny Craig.

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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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