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.
Upward momentum in stock markets started out strong overnight but has faded into the morning. The Hang Seng rallied 1.2 per cent while the Nikkei gained 1.0 per cent in Asia Pacific trading. In Europe, the FTSE is up 0.4 per cent while the Dax is up 0.2 per cent. U.S. index futures, however, are mixed, being only marginally up or down.
The biggest action overnight has been in crude oil with West Texas Intermediate and Brent falling 0.6 per cent after another huge increase in U.S. American Petroleum Institute crude oil inventories, this time 9.9 mmbbls (million barrels of oil). The market continues to be caught between falling OPEC production and rising U.S. production with something having to give eventually. Oil could be active again mid-morning around the weekly Department of Energy energy inventory reports.
In currency trading, the U.S. dollar continues to climb but the pace has slowed with the greenback posting moderate gains against other major currencies and gold. The street continues to view U.S. Federal reserve Chair Janet Yellen's testimony as indicating the potential for several rate hikes this year. Today's U.S. data including inflation, retail sales, Empire manufacturing and industrial is likely to be viewed through the lens of whether it adds to or takes away from the case for a March interest rate hike.
In other news, the European Union Parliament passed the Canada-EU trade agreement (CETA) by a 408-254 margin. On the flip side, Brexit continues to have a positive impact on the U.K. economy, with this month's jobless claims falling by a big 42,000 instead of the 1,000 increase the Street had expected.
Now, here is a closer look at key market data, and corporate and economic news.
MARKET DATA:
Futures (as of about 7:30 a.m. ET)
Dow +0.12 per cent; S&P 500 -0.03 per cent; Nasdaq: +0.02 per cent; TSX 60 +0.12 per cent
Equities
Japan's Nikkei +1.03 per cent
Shanghai composite index -0.16 per cent
Hong Kong's Hang Seng +1.23 per cent
Germany's DAX +0.22 per cent
London's FTSE +0.53 per cent
France's CAC 40 +0.57 per cent
Commodities
WTI crude oil (Nymex March) -0.64 per cent at $52.86 (U.S.) a barrel
Gold (Comex April) +0.17 per cent at $1,227.50 (U.S.) an ounce
Copper (Comex March) +0.26 per cent at $2.74 (U.S.) a pound
Currencies
Canadian dollar -0.04 at 76.41 cents (U.S.)
U.S. dollar index -0.09 at 100.71
Bonds
Canada 10-year bond yield +0.02 at 1.76 per cent
KEY ECONOMIC RELEASES
Euro Area trade surplus
U.K. jobless claims and rate and weekly earnings
(8:30 a.m. ET) Canada manufacturing sales and new orders for December. Estimates are increases of 0.5 per cent for both from November.
(8:30 a.m. ET) Canada new motor vehicle sales.
(8:30 a.m. ET) U.S. CPI for January. Consensus projection is an increase of 0.3 per cent from December and 2.4 per cent year over year. Excluding food and energy, the projections are increases of 0.2 per cent and 2.2 per cent.
(8:30 a.m. ET) U.S. retail sales for January. The consensus is an increase of 0.1 per cent from December. Excluding automobiles, the projection is a 0.4-per-cent rise.
(9 a.m. ET) Canada existing home sales and average prices for January. Estimates are increases of 2.0 per cent and 7.0 per cent year over year, respectively.
(9 a.m. ET) Canada MLS Home Price Index for January. Estimate is an increase of 14 per cent year over year.
(9:15 a.m. ET) U.S. industrial production for January. Consensus is unchanged from December.
(9:15 a.m. ET) U.S. capacity utilization for January. Consensus is 75.5 per cent, unchanged from previous month.
(10 a.m. ET) U.S. Fed's semi-annual monetary policy report to the House. Janet Yellen speaks.
(10 a.m. ET) U.S. business inventories for December (P). Estimate is an increase of 0.4 per cent from November.
(10:30 a.m. ET) EIA petroleum status report
(4 p.m. ET) U.S. net Treasury International Capital flows.
KEY STOCKS TO WATCH
Also see: Wednesday's small-cap stocks to watch
Pepsi inched up 0.22 percent to $10 in light premarket trading after the beverage maker reported a better-than-expected quarterly profit.
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Dow component Procter & Gamble rose 2.5 percent to $90.10 after activist investor Trian Fund disclosed a $3.5 billion stake in the consumer products company.
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Fortress Investment surged 28 percent to $7.95 after Japan's SoftBank agreed to buy the company for $3.3 billion.
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Watchmaker Fossil dropped 18.4 percent to $18.65 after posting fourth-quarter revenue that missed analysts' expectations.
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Berkshire Hathaway boosted its stake in Apple as of Dec. 31 to about 57.4 million shares worth roughly $6.64 billion, from just 15.2 million shares three months earlier. it also reporting significantly larger holdings in the four biggest U.S. airlines. Berkshire also disclosed new stakes in seed company Monsanto Co., which is being bought by Germany's Bayer AG, and satellite radio company Sirius XM Holdings Inc.
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Shopify Inc. continues to outperform market expectations, exceeding analyst forecasts for revenue and operating profit for its fourth quarter and introducing targets for 2017 well ahead of analyst targets. The company also posted an operating loss of $9.3-million, up from $6.5-million in the fourth quarter of 2015. But analysts were watching for the company's adjusted operating loss, which amounted to $0.8-million, less than half the loss analysts were expecting. The company posted a net loss of $8.9-million, or 10 cents per share in the quarter.
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Earnings include: Acadian Timber Corp.; Agnico Eagle Mines Ltd.; Analog Devices Inc.; Applied Materials Inc.; AuRico Metals Inc.; Barrick Gold Corp.; Bunge Ltd.; Capstone Mining Corp.; CBS Corp.; Cineplex Inc.; Cisco Systems Inc.; Conifex Timber Inc.; Constellation Software Inc.; Dundee Precious Metals Inc.; Enbridge Energy Partners LP; Gear Energy Ltd.; goeasy Ltd.; Goldcorp Inc.; Groupon Inc.; Hilton Worldwide Holdings Inc.; Kinross Gold Corp.; Kraft Heinz Co.; Marathon Oil Corp.; Marriott International Inc.; New Gold Inc.; Parker Drilling Co.; PepsiCo Inc.; Progressive Corp.; Shopify Inc.; Sun Life Financial Inc.; Targa Resources Corp.; TripAdvisor Inc.; Williams Companies Inc.; Williams Partners LP.; Wyndham Worldwide Corp.
With files from wire services