By James Langton
(October 22 – 09:00 EST) – Markets look poised for an up opening today. A late day rally on Wall Street yesterday fuelled buying in the overseas markets and pushed the S&P futures up this morning. With no major economic data to spoil the fun, earnings remain the focus. But the day is likely to be rather quiet ahead of the weekend.
In Europe markets have been very buoyant, with almost 2% increases across the region. London’s FTSE 100 is up 68 points, the German DAX has added 100 points, while the CAC 40 is up about 70 points.
Telecom stocks are driving the rally in Europe. Strong earnings out of Ericsson AB, as well as takeover talk is making that sector the place to be this morning. In the wake of Mannesmann’s US$30-odd billion takeover of Orange PLC, there is now talk that British cell giant Vodafone/AirTouch will in turn take out the German giant for somewhere around US$68 billion.
On the data front it was reported that the U.K. economy grew 0.9% in the third quarter, faster than expected, and raising fears of an interest rate hike there soon.
In Asia results were mixed. Japan gave up earlier gains after the Yen sabotaged buying. The Nikkei closed down 9.5 points. But over in Hong Kong the markets bid aggressively to close up 340 points, or 2.75%. Bullishness bled through from Wall Street. And next week the government is launching a huge unit trust.
There may be some optimism surrounding U.S. financial stocks after Congress reached a deal to dismantle depression era banking laws, the U.S. equivalent of Canada’s four pillars laws. Although it seems likely that President Clinton will strike down the proposal.
In earnings news, Air Canada is reporting earnings of 65¢ per share, fully diluted, compared to a 32¢ loss in the quarter last year, although last year’s results included the effect of a pilot’s strike.
Doman Industries Ltd. is reporting a 10¢ loss in its recent quarter, up from last year’s 47¢ loss.