A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 24, 2016.
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 will return.
U.S. and Canadian stock-index futures are inching higher, signaling a rebound in U.S. equities after they fell from a record on Thursday, as investors weighed earnings reports.
Advanced Micro Devices Inc. jumped 9.8 percent in premarket trading after the chipmaker reported quarterly revenue growth for the first time since 2014 and forecast another increase in the current period. Honeywell International Inc. added 1 percent before it reports results later today, along with General Electric Co., American Airlines Group Inc. and seven other S&P 500 firms.
Futures on the S&P 500 were up about 0.2 per cent and TSX 60 futures rose nearly 0.3 per cent. U.S. stocks fell from all-time highs Thursday amid disappointing results from companies including Intel Corp. and Southwest Airlines Co. But the S&P/TSX composite index managed a 32-point gain, thanks in part to better-than-expected earnings reports from Encana and Rogers Communications.
"We've had a major rise in global equities for almost a month almost, this has been accelerated during the earnings season," said Christian Gattiker, head of research at Julius Baer Group in Zurich. "This is now a time of digesting these rises. Next week is really a bumper in terms of earnings, so everyone is looking at that. Overall it's been a decent earnings season so far. Markets might enter the summer lull now."
The S&P 500 is poised for a fourth weekly advance, up 0.2 percent. The benchmark on Wednesday posted its sixth record in eight sessions, while the Dow rose for nine straight days, its longest rally since 2013, before halting the advance yesterday. Speculation that the Federal Reserve will push back its timeline for rate increases and signs of economic strength have propelled stocks higher in recent weeks, with the S&P 500 erasing its losses following the U.K.'s vote to leave the European Union.
The earnings season has also fueled optimism corporate results will support equities near records. About a fifth of S&P 500 firms have released figures so far, of which 81 percent exceeded profit forecasts and 58 percent of them beat sales expectations. The pace is set to accelerate next week, when some 195 companies are scheduled to report results. Analysts expect net income among S&P 500 members will slide 5.8 percent in the second quarter for a fifth straight decline.
A gauge of manufacturing activity tracked by Markit will offer investors clues on the health of the economy later today. In Europe, a composite measure for manufacturing and services showed stronger-than-forecast July data in Germany, while a similar index in the U.K. plunged to a seven-year low in the wake of Brexit.
Here is a closer look at morning markets and key corporate and economic news.
MARKET DATA: (as of about 7 a.m. ET)
Futures
Dow +0.18 per cent; S&P 500 +0.22 per cent; Nasdaq: +0.18 per cent; TSX 60: +0.28 per cent
Equities
Japan's Nikkei -1.09 per cent
Shanghai composite index -0.87 per cent
Hong Kong's Hang Seng -0.16 per cent
Germany's DAX +0.02 per cent
London's FTSE +0.42 per cent
France's CAC 40 +0.28 per cent
Commodities
WTI crude oil (Nymex Aug) +0.13 per cent at $44.81 (U.S.) a barrel
Gold (Comex Aug) -0.48 per cent at $1,324.60 (U.S.) an ounce
Copper (Comex July) -0.11 per cent at $2.256 (U.S.) a pound
Currencies
Canadian dollar -0.22 at 76.17 cents (U.S.)
U.S. dollar index +0.149 at 97.149
Bonds
Canada 10-year bond yield +0.016 at 1.119 per cent
KEY ECONOMIC RELEASES
Canada's annual inflation rate remained at 1.5 percent in June, staying below the Bank of Canada's 2.0 percent target for a fifth consecutive month, Statistics Canada data indicated on Friday. Analysts polled by Reuters had forecast the rate would dip to 1.4 percent. Prices rose by 0.2 percent from May. Prices rose in all major components in the 12 months to June, with the shelter index posting a 1.6 percent gain and food prices rising by 1.3 percent. The core inflation rate, which strips out the prices of some volatile items and is closely watched by the Bank of Canada, remained at 2.1 percent.
(9:45 a.m. ET) America reports its July Markit manufacturing PMI.
KEY STOCKS TO WATCH
Husky reported a loss of $196 million, or 20 cents per share, in the three months ended June, compared with a profit of $120 million, or 10 cents per share, a year earlier. Excluding items, the company's loss was 9 cents per share, according to Thomson Reuters I/B/E/S. Analysts' on average had estimated a loss of 21 Canadian cents per share.
General Electric Co. reported second-quarter profit that beat analysts' estimates as the industrial giant shed finance operations and refocused around equipment manufacturing. Adjusted earnings rose to 51 cents a share. That exceeded the 46-cent average of analysts' estimates compiled by Bloomberg. Sales of $33.3 billion compared with $31.9 billion expected by analysts.
Honeywell International Inc reported a better-than-expected quarterly profit, helped by higher sales in its automation and climate control systems division. Honeywell bumped up the bottom end of its full-year earnings forecast to $6.60 per share from $6.55. It kept the top end at $6.70 per share. The company however lowered it 2016 sales forecast to $40.0 billion-$40.6 billion from $40.3 billion-$40.9 billion.Analysts on average were expecting 2016 earnings of $6.66 per share and revenue $40.64 billion, according to Thomson Reuters I/B/E/S. Net income attributable to Honeywell rose 7.4 percent to $1.28 billion, or $1.66 per share, in the second quarter ended June 30.Analysts were expecting earnings of $1.64 per share. Revenue rose 2.2 percent to nearly $10 billion, but fell shy of analysts' estimates of $10.13 billion.
Puma Biotechnology Inc. surged 23 percent in premarket trading after saying its experimental breast cancer drug reduced the risk of invasive disease recurrence or death after 5 years.
Skechers U.S.A. Inc. tumbled 9.8 percent in the premarket after the shoemaker's second quarter revenue missed estimates.
Advanced Micro Devices Inc. jumped 9.8 percent in premarket trading after the chipmaker reported quarterly revenue growth for the first time since 2014 and forecast another increase in the current period.
Starbucks Corp. fell 2.8 percent after sales at the world's largest coffee-shop chain missed analysts' estimates.
Other earnings today include: American Airlines Group Inc.; BroadVision Inc.; Citizens Community Bancorp Inc.; Moody's Corp.; United Bancorp Inc.; Whirlpool Corp.
With files from Bloomberg and other wire services