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.
U.S. Stock markets continue to retreat from last week's all-time highs with traders taking profits as the euphoria fades. U.S. indexes are down 0.2 per cent while the FTSE and Dax are down 0.4 per cent.
Part of this decline may be due to enthusiasm over U.S. President Donald Trump's economic programs fading. Markets are still waiting for details on tax and spending priorities, which could take a while to fully crystallize and some traders may be starting to move on. Also, the weekend accusations by President Trump on Twitter against his predecessor over wiretapping, ongoing questions about the new Administration's relationship with Russia, and reports a new border control order could be coming this week remind traders that there a number of other areas that could take the President's attention away from the economy.
Risk appetite also took a hit on rising geopolitical tensions in East Asia. North Korea fired four ballistic missiles early in the day, while a spat between China and South Korea over missile defense deepened.
In currency action, there have been some defensive flows. The Japanese yen is top dog today catching up to the rally gold staged Friday afternoon. The U.S. dollar is outperforming the other majors today coming out of Federal Reserve Chair Janet Yellen's speech Friday afternoon. She came as close as a Fed member can get to signalling a rate hike, indicating that at this month's meeting progress on inflation and employment will be reviewed with an adjustment in rates possible. Today is the last day for Fed speakers before the pre-meeting blackout kicks in. Because of this, Wednesday's ADP report and Friday's nonfarm payrolls could attract particular attention.
It's otherwise a lighter week for economic news, but we could see more political developments. China's government announced over the weekend that it is targeting 6.5 per cent GDP growth this year, maybe a bit more. In Europe, the focus remains on very close election races in the Netherlands, Framce and Germany with the Netherlands voting next week. Developments related to Brexit could keep the pound active through the week.
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 -0.24 per cent; Nasdaq: -0.18 per cent; TSX 60 -0.09 per cent
Equities
Japan's Nikkei -0.46 per cent
Shanghai composite index +0.50 per cent
Hong Kong's Hang Seng +0.18 per cent
Germany's DAX -0.38 per cent
London's FTSE -0.33 per cent
France's CAC 40 -0.40 per cent
Commodities
WTI crude oil (Nymex April) -0.68 per cent at $52.97 (U.S.) a barrel
Gold (Comex April) +0.46 per cent at $1,232.20 (U.S.) an ounce
Copper (Comex May) -1.45 per cent at $2.66 (U.S.) a pound
Currencies
Canadian dollar -0.17 at 74.62 cents (U.S.)
U.S. dollar index +0.00 at 101.54
Bonds
Canada 10-year bond yield +0.10 at 1.68 per cent
KEY ECONOMIC RELEASES
China foreign reserves
Euro Area PMI
(10 a.m. ET) U.S. factory orders for January. The consensus projection is an increase of 1.0 per cent from December.
KEY STOCKS TO WATCH
Also see: Monday's small-cap stocks to watch
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Netflix rose nearly 2 percent to $141.90 in premarket trading after UBS raised the stock to "buy" from "neutral".
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Tyson Foods was down 2.3 percent at $61.30 after a strain of bird flu was detected in a chicken breeder flock on a Tennessee farm contracted with the company.
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Overseas, PSA Group has agreed to buy Opel from General Motors in a deal valuing the business at €2.2-billion ($2.3-billion), the companies said on Monday, creating a new regional car giant to challenge market leader Volkswagen. The maker of Peugeot and Citroen cars vowed to return Opel and its British Vauxhall brand to profit, targeting an operating margin of 2 per cent within three years and 6 per cent by 2026 underpinned by €1.7-billion in joint cost savings. GM shares were off 1.3 per cent in premarket trading.
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German banking giant Deutsche Bank's U.S.-listed shares slipped before the bell after Deutsche announced an $8.5 billion capital increase. Its U.S.-listed shares were off 1 per cent.
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Analysts at Needham initiated coverage of the social media firm Snap Inc.'s stock with an "underperform" rating. Still, its shares rose 4 per cent in premarket trading.
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Wells Fargo upgraded HP Inc. shares to "outperform" from "market perform." Its shares were up nearly 1 per cent in premarket trading.
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Investment firm Standard Life agreed Monday to buy Aberdeen Asset Management for 3.8 billion pounds ($4.7-billion U.S.) to create Britain's largest asset management company.
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Delta Air Lines Inc. said it expected passenger unit revenue, a closely watched revenue metric which compares sales to flight capacity, to be about flat in the quarter, compared with the flat to up 2 percent the company had estimated earlier. Its shares fell 1.3 per cent in premarket trading.
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Earnings include: Athabasca Oil Corp.; Currency Exchange International Corp.; Ensign Energy Services Inc.; Gamehost Inc.; Geodrill Ltd.; Kelt Exploration Ltd.; North West Company Inc.; Nuvista Energy Ltd.; Raging River Exploration Inc.; Savaria Corp.; Thor Industries Inc.
With files from wire services