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Colin Cieszynski

The Before the Bell report is compiled by editors of The Globe and Mail and is updated throughout the morning to reflect latest developments. Colin Cieszynski, Chartered Financial Analyst and Chartered Market Technician, is chief market strategist with CMC Markets.

Confidence continued to return to world markets overnight and this morning. Mainland China markets stabilized overnight while the Hang Seng in Hong Kong rebounded to a 2.5 per cent gain, while a 1.5 per cent rally in copper confirmed Thursday's China selloff as an aftershock, not a new downturn.

Positive sentiment has continued into this morning's action, with U.S. index futures for the Dow, S&P 500 and Nasdaq up about 0.7 per cent and major European indexes like the FTSE and DAX rising 1.2 per cent to 2.0 per cent. The TSX should also open higher, though Goldcorp may be a notable exception. Its U.S.-listed shares are down more than 10 per cent in the premarket after the company late Thursday reported a surprise fourth-quarter loss and reduced its dividend.

Today's China rebound has mainly been attributed to comments from People's Bank of China Governor Zhou Xiaochuan, who indicated the central bank still has scope for more monetary support, that he expects fiscal policy to become more proactive, and that fundamentals don't support the Chinese yuan falling further. These comments along with a rise in property prices helped to dispel some of the economic fears related to China, removing one of the headwinds that had dragged down world markets at the start of the year.

Crude oil is also gaining ground again today, with West Texas intermediate and brent both rising more than 3 per cent, as traders anticipate more meetings in March to hammer out details of the proposed production freeze among major producers like Saudi Arabia, Russia, Iraq and Venezuela. Iran's participation remains unlikely as it continues to restore production with sanctions coming off. U.S. drill rig activity coming out this afternoon may also influence production expectations and how crude finishes the week.

Rising metal and energy prices may help boost energy producers and miners again today, although banks could be mixed with Royal Bank of Scotland down 8.0 per cent in the U.K. after it posted another annual loss and pushed out the resumption of dividends past the previous estimate of the first quarter of 2017.

There's still a lot of potential news coming out today that could move markets ahead of the weekend. The G20 finance ministers meeting continues with solutions for how to support the sputtering global economy front and centre, although there appears to be a lot of contention over how to deal with the problem. Negative interest rates and currency levels may also be a big topic as countries try to head off a currency devaluation war. U.S. Treasury Secretary Jack Lew already warned the Street not to expect a co-ordinated round of new stimulus to come out of the meeting, but we could get some supportive talk and maybe some small measures. As with oil, gains are likely to be incremental over time, not all at once.

Speculation on whether or not the Fed will raise interest rates again at its March meeting may also continue to today. First-quarter U.S. GDP numbers came in stronger than expected, suggesting that an interest rate hike by the Federal Reserve in coming months isn't off the table. U.S. futures held their gains as the report came out at 830 a.m. (ET).

Importantly are the monthly and quarterly core Personal Consumption Expenditures inflation reports, which come out later today. Many of the Fed members that have been talking more dovishly lately have done so from a concern over the impact of lower oil prices on inflation. Core PCE is a measure the Fed likes to use, so it could have a significant impact on their thinking. Also today, two of the permanent voters we don't hear from as often are speaking, Governors Jerome Powell and Lael Brainard. Dr. Brainard has been firmly in the dovish camp, even though she did vote the party line on the December increase, so any comments she has about March could be particularly telling.

Now, here is a closer look at key market data, and corporate and economic news.

MARKET DATA:

Futures

S&P 500 +0.7 per cent; Dow +0.7 per cent; Nasdaq: +0.8 per cent; TSX 60 +0.7 per cent

Equities
Hong Kong's Hang Seng +2.52 per cent
Shanghai composite index +0.94 per cent
Japan's Nikkei 225 +0.30 per cent
London's FTSE +1.35 per cent
Germany's DAX +2.06 per cent
France's CAC 40 +1.90 per cent

Commodities
WTI crude oil (Nymex April) +3.30 per cent at $34.15 (U.S.) a barrel
Gold (Comex April) -0.18 per cent at $1,236.60 (U.S.) an ounce
Copper (Comex May) +2.12 per cent at $2.12 (U.S.) a pound

Currencies
Canadian dollar +0.0003 at 73.90 cents (U.S.)
U.S. dollar index +0.423 at 97.710

Bonds
U.S. 10-year Treasury yield +0.04 at 1.76 per cent

KEY ECONOMIC RELEASES

The U.S. economy unexpectedly expanded at a faster pace in the fourth quarter than initially estimated, reflecting a higher value of business inventories. Gross domestic product, the value of all goods and services produced, grew at a 1 per cent annualized rate, compared with an initial estimate of 0.7 per cent, Commerce Department figures showed Friday in Washington. The median forecast in a Bloomberg survey called for a 0.4 per cent gain.

(10 a.m. ET) U.S. personal income and outlays for January. Consensus is for personal income to rise 0.4 per cent and consumer spending to rise 0.3 per cent.

KEY CORPORATE NEWS

Husky Energy Inc  posted a smaller-than-expected quarterly loss as cost cuts help cushion the impact from slumping crude oil prices. According to Thomson Reuters I/B/E/S, the company lost 5 Canadian cents per share, excluding items, while analysts on average had estimated a loss of 10 Canadian cents.

Goldcorp Inc. late Thursday reported a surprise fourth-quarter loss after writing down assets amid a decline in the price of the precious metal, and its U.S-listed shares are down nearly 12 per cent in the premarket. The loss excluding one-time items was 15 cents a share. Analysts predicted adjusted profit of 1 cent, 21 estimates tracked by Bloomberg show. Goldcorp said that this year's gold production will drop by as much as 19 percent as the company focuses on "profitable ounces," amid declining gold prices, it said. Goldcorp also changed its dividend structure. The annual dividend will be cut to 8 cents a share, paid on a quarterly basis. The company previously paid 2 cents a share monthly.

Magna International Inc reported a rise in quarterly sales, excluding the impact of a strong U.S. dollar, helped by healthy demand in Europe and North America. The company said on Friday that it also increased its quarterly cash dividend to 25 cents per share from 22 cents. Shares are up 3.8 per cent in the U.S. premarket.

Weight Watchers International Inc. tumbled 25 per cent in premarket trading after a high-profile partnership with Oprah Winfrey failed to reverse its financial decline last quarter. The company posted a loss of 3 cents a share in the fourth quarter, excluding some items. Analysts had estimated a gain of 2 cents on average. Weight Watchers' active subscribers fell 4.8 percent from a year earlier, though that was less of a decrease than the company experienced in the third quarter.

Hilton Worldwide Holdings Inc will spin off most of its real estate assets into a real estate investment trust, joining a list of companies turning to the tax-efficient structure to maximize shareholder returns. The company's shares rose 8 percent in light premarket trading. The company's latest earnings met Street expectations.

Shares of J.C. Penney were up 10 per cent in the premarket after the department store operator reported better-than-expected revenue.

Gap was down 3.3 per cent in the premarket after its full-year profit forecast missed estimates.

Other earnings today include: Africa Oil Corp.; American Tower Corp.; CenterPoint Energy Inc.; Foot Locker Inc.; GDI Integrated Facility Services Inc.; Liberty Interactive Corp.; Onex Corp.; Royal Nickel Corp.; Sempra Energy.

Also see: Friday's small-cap stocks to watch

With files from wire services

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