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.
World stock markets have kicked off a holiday-shortened and light news flow week by trading neutral to positive. Mainland China indexes rose 2 per cent on reports margin lending is about to resume, a sign the recent crisis has passed. Indexes in Europe. along with U.S. index futures, have been drifting on sides of unchanged. Germany's Dax had been up three-quarters of a percentage point early this morning, but has since lost steam and has slipped below the 10,000 level.
One stock that will see major price action today on the TSX is Bankers Petroleum Ltd. On Sunday, it announced it has agreed to be acquired by affiliates of China's Geo-Jade Petroleum Corp for $575 million (Canadian). Bankers Petroleum said it will be bought by firms owned by the Chinese oil and gas exploration and production company for $2.20 per share, which is nearly double what Bankers Petroleum closed at on Friday on the TSX.
Crude oil has stabilized today, with West Texas intermediate trading near $39 (U.S.) per barrel, after failing to hold above $40 on Friday - a sign of possible near-term exhaustion. Gasoline, meanwhile, is up 1.5 per cent as traders start to look ahead to the summer driving season. A last gasp of winter this week in the highly populated U.S. Northeast has natural gas up 0.5 per cent, but really it looks too little, too late, to save this year's home heating season and this bounce could be short-lived.
The main action in currency markets today has been a moderate 0.3 per cent decline in the British pound relative to the U.S. dollar, euro and Canadian dollar. Uncertainty over a close Brexit vote and questions over the recent budget have been overhanging sterling after Iain Duncan Smith, a former Conservative party leader, resigned his post as Works and Pensions secretary in opposition to a government plan to cut benefits for disabled people. There also have been suggestions Mr. Smith's support for Brexit - Britain's withdrawal from the European Union - may have led to tensions with senior cabinet members as well. This development hasn't had any impact on London's FTSE, which has been trading similar to U.S. markets so far today.
On the other hand, reports out of Australia that the country's budget has been moved up to early May and a double dissolution election (house and senate) may be held in early July in a bid to break a political stalemate has boosted the Australian dollar in overnight trading.
In North America today, the focus is on speeches from Federal Reserve members who are back out on the road with the pre-FOMC meeting blackout lifted. Traders may look to comments on inflation for signs of when central bankers are thinking about raising interest rates again, which could influence trading in the U.S. dollar, gold and major forex pairs. Comments hinting at rising energy prices or inflationary pressures could be seen as hawkish, although it seems from last week's meeting that the Fed may be willing to risk falling behind the curve on inflation to keep the economy humming.
Now, here is a closer look at key market data, as well as the main corporate and economic news of the morning.
MARKET DATA:
Futures
Dow -0.11 per cent; S&P 500 -0.13 per cent; Nasdaq: -0.12 per cent
Equities
Japan's Nikkei 225 Closed for holiday
Shanghai composite index +2.20 per cent
Hong Kong's Hang Seng +0.06 per cent
Germany's DAX +0.38 per cent
London's FTSE -0.10 per cent
France's CAC 40 -0.28 per cent
Commodities
WTI crude oil (Nymex April) -1.19 per cent at $38.97 (U.S.) a barrel
Gold (Comex April) -0.55 per cent at $1,247.70 (U.S.) an ounce
Copper (Comex May) +0.57 per cent at $2.29 (U.S.) a pound
Currencies
Canadian dollar -0.0006 at 76.69 cents (U.S.)
U.S. dollar index -0.012 at 95.074
Bonds
U.S. 10-year Treasury yield +0.001 at 1.88 per cent
KEY ECONOMIC RELEASES
(10 a.m. ET) U.S. existing home sales for February. The consensus estimate is for a drop of 2.9 per cent to an annual rate of 5.31 million, down from January's 5.47 million.
KEY CORPORATE NEWS
Canada's Bankers Petroleum Ltd said on Sunday it has agreed to be acquired by affiliates of China's Geo-Jade Petroleum Corp for $575 million (Canadian). Bankers Petroleum said it will be bought by firms owned by the Chinese oil and gas exploration and production company for $2.20 per share. Shares of Bankers Petroleum closed at $1.11 in Toronto on Friday.
Valeant said Bill Ackman is joining its board and is searching for a new CEO. Michael Person will remain as CEO in the interim. It also announced misstatements on its past financial disclosures. Shares have been halted in U.S. premarket trading.
Data providers IHS and Markit are combining in an all-stock deal worth more than $13 billion (U.S.). IHS Inc. shareholders will own about 57 per cent of the company, with Markit Ltd. shareholders owning 43 per cent.
Marriott International Inc said it made a higher offer for Starwood Hotels and Resorts Worldwide Inc that was accepted by the owner of the Sheraton and Westin hotel brands. The new stock-and-cash offer is worth $79.53 per share, or $13.6 billion, and tops an all-cash $78 per share, or $13.16 billion, offer from a group led by China's Anbang Insurance Group Co.
Sherwin-Williams Co., the largest U.S. paint retailer, said it agreed to buy rival Valspar Corp. for about $9.3-billion (U.S.) in cash to become the world's biggest coatings maker. Sherwin-Williams will pay $113 a share, the companies said Sunday. The price is about 35 per cent higher than Valspar's closing price of $83.83 on Friday.
Earnings include: AGT Food and Ingredients Inc.; Carnival Corp.; YY Inc.
Also see: Monday's small-cap stocks to watch
With files from wire services