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Bay Street peeks in the cabinet

TERRY WEBER

Friday, December 12, 2003

Wall Street will hold its breath and hope for the best Friday as the Dow starts above the 10,000 mark for the first time in roughly 18 months, while Bay Street looks ahead to the formal announcement of a new federal cabinet in Ottawa.

Heading into the week's final session, U.S. stock futures pointed to a flat opening.

At 7:20 a.m. EST, Nasdaq 100 futures were unchanged, sitting 2.45 points above fair value, signalling an unconvincing start for the Nasdaq Stock Market's composite index.

Standard & Poor's futures were also flat, holding 1.90 points above fair value, pointing to a similar start for the Dow Jones industrial average and S&P-500.

On Thursday, the Dow finished 10,008.16. The last time the index crossed that mark was in May, 2002.

On Bay Street, the S&P/TSX composite index -- which does not have a futures contract tied specifically to opening direction -- will take another swing at the key 8,000 mark Friday. It starts the session at 7,956.18, on the back of a 69.06 point gain Thursday.

In Canada, all eyes will be on Ottawa this morning as incoming prime minister Paul Martin announces his new cabinet. Media reports have already lifted the veil on the roster, with Anne McLellan seen taking over as deputy prime minister and Ralph Goodale taking on finance responsibilities.

For Bay Street, Mr. Goodale's appointment is likely to cause few waves, with most expecting Mr. Martin -- himself a former finance minister who made a name for himself slaying this country's deficit -- keeping a close eye on the portfolio.

Mr. Goodale's biggest challenge will be mounting a budget within months of taking office against the backdrop of an uncertain economy and weaker government revenues.

Elsewhere, Statistics Canada releases figures on October international trade. The trade surplus is expected to be $5.5-billion, bolstered by strong global demand and a healthy U.S. recovery.

South of the border, markets will get another reading on how consumers were holding up heading into the holiday season. Around 10 a.m. EST, the University of Michigan releases its closely watched consumer sentiment index. Analysts polled by Briefing.com are expecting the index to rise to 96 from 93.7 in October.

On Thursday, the U.S. Department of Commerce gave the markets an early upside gift with news that November retail sales rose 0.9 per cent, beating forecasts.

The Canadian dollar, meanwhile, managed to hoist itself back above the 76 cent (U.S.) mark in early trading after losing nearly three-quarters of a cent on Thursday. Just ahead of 7:30 a.m. EST, the dollar was at 76.20 cents (U.S.).