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 moved higher this morning after the Bank of England cut its key interest rate, pointing to modest gains at today's open. A number of earnings reports - including several in Canada - will keep stock trading interesting through the day.
The BoE lowered its main lending rate to a record-low of 0.25 per cent from 0.5 per cent and said it would buy 60 billion pounds of government debt to ease the blow from Britain's vote to leave the European Union. The news immediately sent the FTSE 100 in London up more than 1 per cent, pressured sterling, and put a bid in U.S. and Canadian index futures, which had been trading flat earlier.
While Manulife missed analysts estimates on earnings, BCE, SNC-Lavalin, Tim Hortons' owner Restaurant Brands International, Canadian Natural Resources and Canadian Tire all beat expectations this morning.
The S&P 500 has hovered near a record in the past few weeks, and is trading at 18.4 times the projected earnings of its members, close to its highest in more than a decade. Some stronger-than-estimated financial results and speculation that central banks will maintain loose monetary policies have helped equities erase their losses following the U.K.'s vote to leave the European Union, and rally to all-time highs.
Investors are looking for clearer signs of economic progress in the U.S., with recent data including last week's growth report damping optimism. Reports are expected later today on initial jobless claims and factory orders, with the Labor Department's July payrolls data due tomorrow.
Of the S&P 500 companies that have reported earnings so far, 78 per cent beat earnings predictions and 57 per cent topped sales projections. Analysts have tempered their estimates for a decline in second-quarter net income at S&P 500 companies to 3.2 per cent.
"Stocks are probably taking a breather before gaining further," said Ross Yarrow, director of U.S. equities at Robert W. Baird & Co. in London. "A lot of people are worried about valuation. It wouldn't be good to take this as a sell signal. The S&P 500 is still in the territory where we've seen upside historically, but the risk-reward is now less attractive."
Now, 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 +0.31 per cent; S&P 500 +0.31 per cent; Nasdaq: +0.14 per cent; TSX 60: +0.13 per cent
Equities
Japan's Nikkei +1.07 per cent
Shanghai composite index +0.14 per cent
Hong Kong's Hang Seng +0.43 per cent
Germany's DAX +0.69 per cent
London's FTSE +1.26 per cent
France's CAC 40 +0.41 per cent
Commodities
WTI crude oil (Nymex Sep) -0.76 per cent at $40.52 (U.S.) a barrel
Gold (Comex Dec) -0.18 per cent at $1,362.20 (U.S.) an ounce
Copper (Comex July) -1.50 per cent at $2.1655 (U.S.) a pound
Currencies
Canadian dollar +0.03 at 76.47 cents (U.S.)
U.S. dollar index +0.141 at 95.704
Bonds
Canada 10-year bond yield -0.023 at 1.074 per cent
KEY ECONOMIC RELEASES
The number of Americans filing for unemployment benefits unexpectedly rose last week, but the trend continued to point to a healthy labor market. Initial claims for state unemployment benefits increased 3,000 to a seasonally adjusted 269,000 for the week ended July 30, the Labor Department said on Thursday. Claims for the prior week were unrevised. Economists polled by Reuters had forecast initial claims edging down to 265,000 in the latest week.
Still to come:
(10 a.m. ET) U.S. factory orders for June. Consensus is a decline of 1.9 per cent from May.
KEY STOCKS TO WATCH
Manulife Financial Corp., Canada's largest life insurer, reported second-quarter earnings that missed analysts' estimates as hedging costs and lower investment gains hampered growth. Second-quarter profit excluding some items was 40 cents a share, according to a statement Thursday, below the 45-cent average estimate of 13 analysts surveyed by Bloomberg. Net income increased 17 percent from the prior-year period to $704 million, or 34 cents a share. The Toronto-based firm kept its dividend at 18.5 cents a share. The company also said it could take a charge of as much as $500 million, based on preliminary indications from an actuarial review.
BCE's net income attributable to shareholders rose to 2.5 percent to $778 million in the second quarter, from $759 million a year earlier. On an adjusted basis, the company earned 94 Canadian cents per share. Analysts on average had expected a profit of 91 Canadian cents per share, according to Thomson Reuters I/B/E/S.
Restaurant Brands International Inc., the owner of Burger King and Tim Hortons, reported second-quarter profit that beat analysts' estimates as new items helped the company weather a rough patch for the fast-food industry. Profit was 41 cents a share, excluding some items, the Oakville, Ontario-based company said Thursday in a statement. Analysts estimated 35 cents, on average. Revenue was little changed at $1.04 billion (U.S.), in line with analysts' $1.05 billion average projection.
Canadian Natural Resources Ltd., the nation's largest heavy-oil producer, reported a narrower second-quarter loss as lower costs helped offset the slump in crude prices. The loss was $339 million, or 31 cents a share, compared with a loss of $405 million, or 37 cents, a year earlier, the Calgary-based company said in a statement on Thursday. Excluding one-time items, the 19-cent per-share loss was smaller than the 27-cent average of 18 analysts' estimates compiled by Bloomberg.
Canadian Tire said net income attributable to the company rose 8.1 percent to $179.4 million, or $2.46 per share, beating the average analyst estimate of $2.33, according to Thomson Reuters I/B/E/S. Total revenue increased nearly 3 percent to $3.35 billion, topping the average estimate of $3.31 billion.
SNC-Lavalin reported Q2 adjusted EPS of 48 cents vs. Street expectations of 36 cents.
Mobile-payment firm Square Inc. jumped 17 per pent and fast-food restaurant operator Jack in the Box Inc. rallied 5.9 percent after both boosted their full-year earnings projections.
Tesla fell 0.8 per cent to $224 in the premarket after the electric carmaker posted a steeper-than-expected loss, but said it was on track for future deliveries.
Randgold's U.S.-listed shares dropped 10.6 per cent to $106.30 after it reported flat quarterly profit from its mining business and a drop in gold production.
Other earnings today include: ACADIA Pharmaceuticals Inc.; Activision Blizzard Inc.; Advantage Oil & Gas Ltd.; Alcatel Lucent SA; Algoma Central Corp.; AMC Networks Inc.; Apache Corp.; B2Gold Corp.; Boralex Inc.; Callidus Capital Corp.; Canam Group Inc.; Canam Group Inc.; Cara Operations Ltd.; Carrizo Oil & Gas Inc.; CI Financial Corp.; Conifex Timber Inc.; Consolidated Edison Inc.; Cott Corp.; Duke Energy Corp.; Enerflex Ltd.; Heroux-Devtek Inc.; IGM Financial Inc.; Industrial Alliance Insurance and Financial Services Inc.; Innergex Renewable Energy Inc.; Inter Pipeline Ltd.; Kellogg Co.; Kemper Corp.; Kirkland Lake Gold Inc.; Labrador Iron Ore Royalty Corp.; Lucara Diamond Corp.; MGM Resorts International; Nokia Corp.; Norsat International Inc.; Parkland Fuel Corp.; Pembina Pipeline Corp.; Pengrowth Energy Corp.; Penn West Petroleum Ltd.; The Priceline Group Inc.; Primero Mining Corp.; Re/Max Holdings Inc.; Redline Communications Group Inc.; Regeneron Pharmaceuticals Inc.; Siemens Ltd; SMART Technologies Inc.; SNC-Lavalin Group Inc.; Spin Master Corp.; Stantec Inc.; Starwood Property Trust Inc.; Symantec Corp.; Time Inc.; Universal Corp.; Viacom Inc.; Westshore Terminals Investment Corp.; Whitecap Resources Inc.; Xtreme Drilling Corp.; ZCL Composites Inc.
With files from Bloomberg and other wire services