Toronto's financial district is shrouded by fog on December 30, 2011. THE CANADIAN PRESS/Frank Gunn
January 06, 2014 - 5:33 AM
TORONTO - The Toronto stock market looked set to start a busy trading week little changed ahead of the release of top drawer economic data and the start to the U.S. corporate earnings season.
The Canadian dollar was off 0.02 of a cent to 93.97 cents US.
U.S. futures were positive with the Dow Jones industrial futures up 30 points to 16,437, the Nasdaq futures rose 3.5 points to 3,535 and the S&P 500 futures added 3.75 points to 1,829.25.
On the economic front, investors will take in the latest reading on the American non-manufacturing sector. It is expected the Institute for Supply Management's service sector index will come in at 55.1, an improvement from November's reading of 53.9.
Markets are also waiting to scrutinize the minutes of the Federal Reserve’s December meeting mid-week. The Fed announced at that meeting it would start to cut back on its monthly US$85 billion of bond purchases, a key stimulus measure that supported a strong rally on markets last year, by $10 billion starting in January.
Traders will look for indications of when the Fed accelerate that tapering and for the central bank’s latest take on the economy.
The Fed said in December further tapering would be linked to the economic recovery, in particular employment growth, so Friday’s U.S. non-farm payrolls report is of special interest. Economists look for the economy to have created about 195,000 jobs during December.
Canadian employment figures also come out on Friday and the consensus called for the economy to have cranked out 13,000 jobs during the month.
Overseas, traders will take in the latest trade, inflation and loans data from China later in the week. Two surveys last week showed manufacturing activity has weakened in December, which analysts said pointed to a downturn in business cycle.
Credit Agricole CIB in Hong Kong said it was increasingly clear that China’s growth has peaked and entering an economic downturn, which will hurt regional exports.
Investors will also start to focus on corporate earnings later this week when resource company Alcoa hands in fourth quarter data.
Expectations have been lowered in recent months with earnings from S&P 500 companies expected to have risen 6.3 per cent in the fourth quarter. That’s slower than the 9.3 per cent growth analysts expected, on average, at the end of September, according to FactSet.
Commodities were mixed with the February crude contract on the New York Mercantile Exchange up cents to US$ a barrel.
Crude fell six per cent last week due to growing inventories in the U.S. and an expected recovery in Libyan production.
February bullion dipped 60 cents to US$1,238 an ounce while March copper was down two cents to US$3.34 a pound.
North American markets closed little changed last week with the TSX down 39 points while the Dow shed eight points.
On the corporate feront, Men’s Wearhouse is raising its offer for Jos. A. Bank Clothiers to about $1.61 billion and taking the bid directly to its rival’s shareholders. Men’s Wearhouse Inc. is now offering $57.50 per share for Jos. A. Bank, up from its prior offer of $55 per share, or $1.54 billion. Jos. A. Bank rejected the previous offer in late December, saying it was too low.
European bourses were generally weak with London's FTSE 100 index ahead 0.05 per cent, Frankfurt's DAX was up 0.16 per cent while the Paris CAC 40 dipped 0.07 per cent.
Earlier in Asia, China’s benchmark Shanghai Composite Index tumbled 1.9 per cent, extending losses from last week. Tokyo’s Nikkei shed 2.4 per cent and Hong Kong’s Hang Seng fell 0.6 per cent. South Korea’s Kospi bucked the trend to add 0.4 per cent.
News from © The Canadian Press, 2014