What you need to know before markets open


Canadian stocks were set to open slightly higher on Monday, helped by hope about upcoming U.S. corporate earnings, but worries over Europe’s banks and the uncertain prospects for the region’s debt sales kept investors wary.

German and French leaders were set to meet to discuss ways to boost growth and jobs and finalise a deal to increase fiscal coordination within the currency union.

FACTORS TO WATCH

* Canadian equity futures pointed to a higher open.

* U.S. stock index futures were little changed as Germany and France sought ways to tackle a sovereign debt crisis and as investors prepared for the start of the latest round of U.S. corporate earnings.

* European shares were flat, with some optimism about the imminent fourth-quarter U.S. earnings season offset by GlaxoSmithKline leading the healthcare sector down after the release of a mixed batch of clinical trials results on a key new lung drug.

COMMODITY PRICE MOVES

* The Thomson Reuters-Jefferies CRB index, a global commodities benchmark, fell 0.13% in early trade.

* Brent crude futures slipped, reversing earlier gains to trade below US$113 a barrel, as worries about the economic health of the eurozone offset a premium related to Iran’s threat to shut a key oil-shipping route.

* Gold prices steadied in Europe as a retreat in the dollar took some early selling pressure off the metal, with trading cautious ahead of a meeting between the French and German leaders on the euro zone economy later in the day.

* Copper edged down as more negative news flow on Europe’s debt crisis dimmed prospects for metals demand and overshadowed signs of improved growth in the United States, the world’s largest economy.

CANADIAN STOCKS TO WATCH

* Anvil Mining: Chinese group Minmetals Resources extended its US$1.3-billion takeover offer for Africa-focused Anvil Mining to Jan. 11, 2012, its second extension as it needs more time to resolve a dispute over contracts with Congo.

* Lululemon Athletica Inc.: The Yogawear retailer said on Friday that its founder Chip Wilson will step down from his post as chief innovation and branding officer effective Jan. 29, and stay on as chairman of the board.

* Sea Dragon Energy Inc.: Egyptian private equity firm Citadel Capital said it is selling National Petroleum Co Egypt to Sea Dragon Energy in a cash and stock deal valued at US$147.5-million.

ANALYST RECOMMENDATIONS

Following is a summary of research actions on Canadian companies reported by Reuters.

* B2Gold Corp price target raised to $5.50 from $5.00 at Canaccord Genuity

* Canam Group Inc price target cut to $4.50 from $5 at NBF

* Jean Coutu Group (PJC) Inc price target raised to $15 from $13 at CIBC

* Leisureworld Senior coverage started with sector performer rating at CIBC

* TransForce Inc price target raised to $18 from 15 at NBF

UNITED STATES

U.S. stock index futures pointed to a mixed open for equities on Wall Street on Monday, with futures for the S&P 500 down 0.1%, for the Dow Jones up 0.1 % and for the Nasdaq 100 up 0.1%.

* The unofficial start of corporate earnings season kicks off on Monday when Alcoa, the largest U.S. producer of aluminum, reports after the bell.

* Bristol-Myers Squibb Co. has agreed to acquire Inhibitex Inc.for about US$2.5-billion to gain access to its promising hepatitis C treatment, the companies said on Saturday.

* The Conference Board releases its employment trend index for December at 1500 GMT. In the previous report, the index read 103.7.

* The Federal Reserve issues consumer credit data at 2000 GMT. Economists forecast consumer credit will rise US$7-billion versus a US$7.65-billion increase in October.

* The Federal Reserve has launched a potentially controversial push to revive the battered U.S. housing market, calling on other government officials to act after largely exhausting its own tools to support the fragile economic recovery.

* China’s banks ratcheted up lending in the last month of 2011 on the back of stronger money supply, reinforcing perceptions that the central bank is gently easing policy to cushion the impact of the global economic slowdown.

* Best Buy Co. appeared to gain market share from rivals in the United States during the key holiday season and stood by its profit outlook for the financial year, despite a 1.2% same-store sales decline in December.

* Analysts and executives at the Detroit auto show expect 2012 U.S. auto sales to grow 4% to 9%, the third consecutive annual gain. The only reason automakers are not more bullish is the risk that the sovereign debt crisis in Europe may trigger a broader slowdown.

* General Motors and its joint ventures sold 2.55 million vehicles in China in 2011, up 8.3% from a year earlier, the U.S. automaker said on Monday.

* Oracle Corp. can’t appeal an order slashing its US$1.3-billion copyright infringement verdict against SAP AG until it decides whether it will reject the lower, court-imposed damages award, a U.S. judge ruled on Friday.

* Venezuelan President Hugo Chavez said on Sunday that his country would not recognize any ruling by a World Bank tribunal in a multibillion-dollar arbitration case with Exxon Mobil Corp.

* Lions Gate Entertainment Corp. is nearing a deal to buy “Twilight” movie producer Summit Entertainment for about US$400-million, two people familiar with the matter said on Sunday.

* European shares fell 0.3% in choppy trading on Monday, with heavyweight GlaxoSmithKline GSK.L leading the healthcare sector lower after the release of a mixed batch of clinical trials results on a key new lung drug.

* U.S. indexes closed mixed on Friday on worries about higher bond yields in Italy and Spain. The Dow Jones industrial average dropped 0.45%, the S&P 500 Index fell 0.25% while the Nasdaq Composite gained 0.16%.

* Japanese markets were closed on Monday for a national holiday.

© Thomson Reuters 2011

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