TORONTO - The Toronto stock market headed for a strong open Monday amid hopes for a revival of growth in Japan, the world's third biggest economy.
The Canadian dollar was lower for a sixth session, down 0.17 of a cent to seven-month lows of 97.79 cents US.
U.S. futures advanced as Prime Minister Shinzo Abe prepared to nominate Asian Development Bank President Haruhiko Kuroda to head Japan’s central bank.
He is thought to back Abe’s strategies for seeking to revive Japan’s economy by fighting deflation through monetary easing and hefty government spending.
The Dow Jones industrial futures were higher as the Dow Jones industrial futures ran ahead 61 points to 14,042, the Nasdaq futures were up 21 points to 2,756.8 while the S&P 500 futures advanced 7.25 points to 1,521.75.
Traders also looked to the eurozone on the final day of a general election in Italy that has proven to be closer than many thought.
Italy has the second-highest level of debt among the 17 eurozone countries as a proportion of its annual gross domestic product. Only Greece’s is higher.
And analysts say the concern is that difficulties hammering together another coalition government could seriously hamper progress on financial reforms.
Stock markets closed little changed last week after the minutes from the Federal Reserve’s last policy meeting sparked concern over how long the central ban will carry on with its monetary stimulus.
They showed that some policy-makers were worried that the bank’s US$85 billion in monthly bond purchases could eventually unsettle financial markets or cause the central bank to take losses.
There's plenty to keep investors focused this week, including the looming March 1 deadline when the sequester takes place. That's the term for a series of automatic, across-the-board spending cuts worth US$85 billion set to take place unless Republicans and Democrats can arrive at a more measured alternative.
The worry is that the cuts would depress already weak economic growth.
On Monday, a survey showed that business economists expect 2013 will be another year of sub-par growth for the U.S. economy.
But the National Association for Business Economics says they also believe the economy will improve as the year progresses and by 2014 will grow at the fastest pace in nine years.
The best bit of news this week could come from the big banks. Traders will take in quarterly earnings from Bank of Montreal (TSX:BMO), Royal Bank (TSX:RY), TD Bank (TSX:TD) and CIBC (TSX:CM).
They're expected to be impacted by the slowdown in the housing market. At the same time, analysts expect dividend increases from most of the banks.
Commodity prices were higher with the April crude contract on the New York Mercantile Exchange ahead $1.04 to US$94.17 a barrel.
March copper gained two cents to US$3.56 a pound while April bullion jumped $18.60 to US$1,591.40 an ounce.
It's also a busy weak for economic reports.
Statistics Canada is expected to report Friday that Canadian gross domestic product grew by 0.7 per cent in the fourth quarter. But it looks like growth started to flatten at the end of the year as the economy likely contracted by 0.1 per cent in December after rising 0.3 per cent in November.
In the U.S., investors will take in January data on new home sales and prices on Tuesday, durable goods orders on Wednesday, and the second look at U.S. economic growth during the fourth quarter which economists expect will show the economy actually grew by an annualized rate of 0.5 per cent as opposed to the original reading showing a 0.1 per cent dip.
Finally, on Friday, the Institute for Supply Management issues its February survey on the manufacturing sector on Friday, which is expected to show continued expansion but at a level unchanged from January.
On the corporate front, home improvement retailer Lowe’s Cos. said Monday that cleanup efforts after Superstorm Sandy and its new pricing strategy helped its fourth-quarter net income surpass expectations.
Lowe’s quarterly net income totalled $288 million, or 26 cents per share, down from $322 million, or 26 cents per share, a year ago. Analysts expected 23 cents per share, according to FactSet.
Revenue fell five per cent to $11.05 billion but exceeded expectations of $10.85 billion.
Inmet Mining Corp. (TSX:IMN) and Petaquilla Minerals Ltd. (TSX:PTQ) have reached a US$150-million commercial agreement for the two Canadian companies’ projects in Panama. The deal comes as Vancouver-based First Quantum attempts to acquire Inmet through a $5.1-billion hostile takeover bid that expires Wednesday.
European bourses advanced as London's FTSE 100 index gained 1.32 per cent, Frankfurt's DAX advanced 2.33 per cent and the Paris CAC 40 rose 1.82 per cent.
Earlier in Asia, Japan’s benchmark Nikkei 225 surged 2.4 per cent, Hong Kong’s Hang Seng rose 0.2 per cent while South Korea’s Kospi ended 0.5 per cent lower.
In mainland China, the Shanghai Composite Index climbed 0.5 per cent and the smaller Shenzhen Composite Index ended 0.8 per cent higher.
Chinese stocks rose even though a survey showed manufacturing activity this month declined to a four-month low, a reminder of possible threats to recovery in the world’s second biggest economy.