Luke KawaThe Globe and Mail
The Before the Bell report is updated throughout the premarket to reflect the latest news developments and market moves. Check back later for updates.
North American equity markets are poised to open higher on Thursday despite renewed turmoil in Europe that has raised the odds of Greece exiting the currency union.
The European Central Bank delivered a shot across the bow to Greece on Wednesday afternoon amid the nation's attempt at renegotiating its bailout loans, suspending the eligibility of Greek debt for use as collateral beginning on Feb. 11. As Greek banks do not have an outsized amount of exposure to this sovereign debt, the potential for this move to have a notable and instant impact on the country's financial system appears to be limited, but it serves as a signal that European authorities wish for Greece to soften its position. The new government in Greece does not look to be willing to cave under pressure from the ECB, with the Finance Ministry reaffirming its quest for debt relief.
Shares in Greek banks sold off after the ECB's move while yields on the nation's debt rose, and most European markets moved lower on Thursday. In the midst of the selloff, however, the European Commission upgraded the euro area's growth forecast to 1.7 per cent from 1.5 per cent, with policy makers highlighting the stimulus provided by cheaper oil and a lower currency.
In England, Governor Mark Carney maintained the status quo, keeping the Bank of England's benchmark rate at 0.5 per cent and announced no alterations to its asset purchasing program.
Meanwhile, during a speech in Germany, Boston Fed president Eric Rosengren opined that the Federal Reserve ought to hold off on rate hikes for the time being until there is more proof that inflation is rising. The "policy of patience in the United States continues to be appropriate" in light of persistently low inflation across advanced economies, he said. Mr. Rosengren is not a voting member of the Federal Open Market Committee in this year and is considered to be one of the more dovish members of the central bank.
The risk-on trade in North America began around 2:00 a.m. ET, with gold falling while equity futures and crude oil rose. The active futures contract for West Texas Intermediate crude remains below $50 per barrel after prices crumbled on Wednesday leading up to and following the release of a stronger-than-expected build of U.S. stockpiles. Supported by the move in oil, S&P/TSX 60 futures are pointing to a higher open on Bay Street. Wednesday's rout, which was preceded by a four-day rally that pushed the commodity into a bull market, may have forced out many of the weak hands on both sides of the trade and foster a stretch of more stable trading.
Details on a busy day of earnings, market results, and a preview of the day's key economic releases can be found below.
MARKETS:
Futures:
S&P 500 +0.7 per cent; Dow +0.5 per cent; Nasdaq +0.4 per cent
Equities:
Hong Kong's Hang Seng +0.35 per cent
Shanghai composite index -1.2 per cent
Japan's Nikkei -1 per cent
London's FTSE 100 -0.33 per cent
Germany's DAX -0.25 per cent
France's CAC 40 -0.49 per cent
Stoxx 600 -0.35 per cent
Commodities:
WTI crude oil (Nymex Mar) +1.96 per cent at $49.40 (U.S.) a barrel
Natural gas (Nymex Mar) +0.45 per cent at $2.674
Gold (Comex Apr) -0.18 per cent at $1,262.20 (U.S.) an ounce
Copper (Comex Mar) -1.93 per cent at $2.541 (U.S.) a pound
Currencies:
Canadian dollar at 79.93 (U.S.), down 0.0039
U.S. dollar index down 0.085 at 93.901
Bonds:
U.S. 10-year Treasury yield 1.8015 per cent, up 0.0503
ECONOMIC INDICATORS:
(830 a.m. ET) Canada's merchandise trade deficit came in at $649-million in December, which was smaller than the $1.1-billion deficit economists had forecast. November's deficit was also revised downwards to $335-million from $600-million.
(830 a.m. ET) U.S. goods and services trade deficit for December was $46.6-billion, much higher than the consensus estimate of $38.0-billion.
(830 a.m. ET) U.S. initial jobless claims for last week were 12,000 lower than anticipated at 278,000.
STOCKS TO WATCH:
Suncor Energy Inc. , Canada's largest energy firm, reported operating earnings of $0.27 on Wednesday night, which came in below the consensus estimate of $0.35. This marks a decrease of 60 per cent relative to the fourth quarter of 2013. Management indicated that cash operating costs per barrel at its oil sands locations declined on an annual basis, and are expected to continue to decline in 2015.
Twitter Inc. has reached a deal with Google Inc. that will see tweets from the micro-blogging platform appear in searches immediately after publishing. This agreement is likely to see Twitter gain data-licensing revenue. The company reports its quarterly results today after the market closes.
BCE Inc., one of the Big Three telecoms, posted profits that exceeded analysts expectations and announced that it was hiking its quarterly dividend by 5.3 per cent to $0.65 per share.
Pfizer Inc. has reached a deal to buy Hospira Inc., which provides injectable drugs and infusion technologies, for roughly $16-billion (U.S.).
Earnings expected: BCE Inc., Gluskin Sheff, Heroux-Devtek, Manitoba Telecom, MEG Energy, Resolute Forest, Saputo, Sierra Wireless, Toromont Industries, Alliance Data Systems Corp., American Science and Engineering Inc., ARC Group Worldwide Inc., athenahealth Inc., bebe stores inc., Brightcove Inc., Brooks Automation Inc., Buffalo Wild Wings Inc., Carlisle Co. Inc. Channeladvisor Corp., Charter Communications Inc., Cigna Corp., Delphi Automotive PLC, DeVry Education Group Inc., Dunkin' Brands Grp Inc., DuPont Fabros Tech Inc., Elizabeth Arden Inc., Entergy Corp., Estee Lauder Co. Inc., Expedia Inc., Flowers Foods Inc., Gartner Inc., GoPro Inc., GrubHub Inc., Hercules Offshore Inc., Invacare Corp., Kemper Corp., LeapFrog Enterprises Inc., LinkedIn Corp., Lions Gate Entertainment Corp., Magellan Midstream Partners L.P., Michael Kors Holdings Ltd., MSCI Inc., NETGEAR Inc., News Corp., Nu Skin Enterprises Inc., Nuance Communications Inc., Och-Ziff Capital Management Group LLC, Olin Corp., Pandora Media Inc., Paylocity Holding Corp., Philip Morris Intl Inc., Pixelworks Inc., PPL Corp., Prestige Brands Holdings Inc., Prospect Capital Corp., Q2 Holdings Inc., Sally Beauty Holdings Inc., Sirius XM Holdings Inc., Snap-on Inc., Southern Copper Corp., Sprint Corp., Standard Pacific Corp., Symantec Corp., Tempur Sealy, Twitter Inc., Ubiquiti Networks Inc., Universal Technical Institute Inc., USG Corp., VeriSign Inc., Wesco Aircraft Holdings Inc., Xylem Inc., Yelp Inc., YRC Worldwide Inc.
ANALYST ACTIONS:
Macy's Inc. was cut to "equal weight" from "overweight" by Morgan Stanley.
Imax Corp. was downgraded to "neutral" from "overweight" by JP Morgan, which hiked its price target to $35 (U.S.) from $33.
Ralph Lauren Corp. was cut to "neutral" from "buy" over at Goldman Sachs.