By James Langton
(September 12 – 09:00 ET) – With no major economic releases on either side of the border today traders are left dwelling on sky-high oil prices as today’s focus. Almost no one seems to believe that the weekend’s OPEC boost will be enough to push oil prices down. The head of OPEC Ali Rodriguez hinted that oil could hit US$40 per barrel, noting, “we are approaching a crisis of great proportions because oil production capacity is reaching it limit.”
The fear is that the U.S. Federal Reserve Board and Bank of Canada will be forced to hike rates to combat oil price inflation in the face of what is otherwise an economic boom.
In Europe stocks are mostly down with the euro weakening every day. Traders are awaiting testimony from European Central Bank president Wim Duisenberg that may support the euro, or even herald intervention.
Tech stocks such as Alcatel are leading the slide in Europe, with some help from banks. The FTSE is off 18 points to 6,564. The CAC 40 is off 38 to 6,637. The DAX is down 71 points to 7,143.
The latest rumoured financial merger has Dresdner Bank AG buying a U.S. M&A specialist Wasserstein Perella & Co. for US$1.5 billion, according to a report by the Wall Street Journal.
PRI Automation Inc. said its fourth-quarter earnings will miss forecasts because of manufacturing problems. This is helping push premarket trading down.
In Asia stocks fell in sympathy with Nasdaq. The Nikkei dropped 91 points to 16,040. The Hang Seng fell harder, dropping 378 points to 16,629.
Loblaw Cos. Ltd. is reporting that the strike at its subsidiary Zehrs Markets is over, the 46 stores in Southwestern Ontario that were affected by the strike action will re-open today.