By James Langton
(November 10 – 09:00 EST) – Despite big gains in Asian markets overnight and some buying in Europe the North American markets look uncertain heading up to the next decision on U.S. interest rates on Nov. 16th.
The big economic news today is the U.S. Producer Price Index, which confounded traders. It came in 0.3% up for the core rate. Economists expected a 0.1% increase . The higher-than-expected number sparked some fear among traders that the U.S. Federal Reserve Board will hike rates.
Statistics Canada announced the New Housing Price Index was up 0.2% in September. On an annualized basis the NHPI is up 1.2%, which is the highest annualized increase since the NHPI saw a 1.3% advance in December 1997. On a monthly basis, this index of contractors’ selling prices for new houses rose 0.2%.
Over in Europe, the continued rise in crude oil prices is driving the oil and oil service stocks higher, led by BP Amoco PLC. Also there is plenty of merger chatter in the drug and telecom sectors. London’s FTSE 100 is up 35 points so far. The German DAX has added 33 points, and the French CAC 40 is leading the way, up 38 points.
Overnight in Asia stocks rallied strongly on very positive and active futures trading in Japan, driving tech stocks higher. The Nikkei closed up 275 points, more than 1.5%; while that Hang Seng index rose 306 points on the enthusiasm in Japan.
In the cable business CanWest and Shaw have finally reached a deal on the assets of WIC Western Communications – Shaw and its spin-off Corus will receive $550 million, 75% of it going to Corus.