Luke KawaThe Globe and Mail
The Before the Bell report is updated throughout the premarket to reflect the latest news developments and market moves. Check back later for updates.
The positive reaction to the stellar U.S. jobs report quickly faded, and equity futures in the United States are trading below Friday's closing price ahead of the open.
In Europe, newly elected Greek Prime Minister Alexis Tsipras signalled he would follow through on promises made during the campaign, including a minimum wage hike, which would violate the terms of the nation's bailout package. European stocks are moving lower, setting the tone for a negative open in North America.
The recent round of surprising central bank stimulus may have run its course, while buoyant U.S. payrolls growth suggests the Federal Reserve may embark upon a tightening phase as soon as June.
"It seems we need to see a new catalyst other than just central bank policy, otherwise markets will show greater short-term vulnerabilities," said IG chief market strategist Chris Weston.
Stateside, earnings may prove to be the impetus that propel stock prices higher. Despite much focus on the deleterious effect a stronger U.S. dollar has on the profits of multinationals, earnings growth of S&P 500 companies is up roughly 4 per cent year-over-year, according to Dan Greenhaus, chief global strategist at BTIG.
Oil prices went on a tear last week, posting their biggest one-week advance since February, 2011, as traders point to declining rig counts as a sign that production will soon be curtailed, though mounting stockpiles tell a different story. West Texas Intermediate remains above $52 (U.S.) per barrel early on Monday morning. Though this offers some support for the S&P/TSX Composite index, the benchmark Canadian index is still poised to open in the red. OPEC has cut its estimate for supply growth coming from outside the cartel by approximately 400,000 barrels a day, with about a third of that decrease attributable to lower production in the United States.
Chinese exports unexpectedly declined by 3.3 per cent year-over-year in January, while imports tumbled by much more than analysts had anticipated. However, seasonal factors related to the Lunar New Year holiday, which falls in February this year rather than January in 2014, may have distorted the data somewhat. Asian markets were mixed on Monday.
Details on of upcoming earnings, market results and a preview of the day's key economic releases can be found below.
MARKETS:
Futures:
S&P 500 -0.6 per cent; Dow -0.53 per cent; Nasdaq -0.5 per cent
Equities:
Hong Kong's Hang Seng -0.66 per cent
Shanghai composite index +0.62 per cent
Japan's Nikkei +0.36 per cent
London's FTSE 100 -0.67 per cent
Germany's DAX -1.58 per cent
France's CAC 40 -1.19 per cent
Stoxx 600 -1.05 per cent
Commodities:
WTI crude oil (Nymex Mar) +2.26 per cent at $52.86 (U.S.) a barrel
Natural gas (Nymex Mar) +2.99 per cent at $2.656
Gold (Comex Apr) +0.33 per cent at $1,238.70 (U.S.) an ounce
Copper (Comex Mar) 0 per cent at $2.5855 (U.S.) a pound
Currencies:
Canadian dollar at 80.01 (U.S.), up 0.00013
U.S. dollar index down 0.025 at 94.673
Bonds:
U.S. 10-year Treasury yield 1.9028 per cent, down 0.0539
ECONOMIC INDICATORS:
(815 a.m. ET) Canada's housing starts for January. The seasonally adjusted annualized rate of starts was 187,300, above the consensus estimate of 178,500.
STOCKS TO WATCH:
Alibaba Group Holding Ltd. is making a $590-million (U.S.) investment in Meizu Technology Corp., a Chinese smartphone maker.
Toy maker Hasbro Inc. reported earnings that were largely in line with analysts' expectations, with management hiking the quarterly dividend by about 7 per cent and approving an additional $500-million in stock buybacks.
McDonald's Corp. said same-store sales at its locations outside the United States fell 1.8 per cent in January; analysts had expected a decline of 1.2 per cent.
Earnings expected: Diamond Offshore Drilling Inc., Loews Corp., Boardwalk Pipeline Partners LP, Hasbro Inc., Ligand Pharmaceuticals Inc. Synalloy Corp., WEX Inc., Oaktree Capital Group LLC, Motorcar Parts of America Inc., General Finance Corp., NAPCO Security Technologies Inc. Fifth Street Finance Corp., CNA Financial Corp., Panhandle Oil and Gas Inc., CBIZ Inc., Masco Corp. TECO Energy Inc. Mercury General Corp., Orion Energy Systems Inc., ICU Medical Inc. ESCO Technologies Inc. Computer Sciences Corp. Crown Holdings Inc. Yodlee Inc. Waste Connections Inc., Comstock Resources Inc., Coupons.com Inc., Primerica Inc., The Ensign Group Inc.
ANALYST ACTIONS:
Alcoa Inc. was cut to "neutral" from "overweight" by JPMorgan.
Pfizer Inc. was upgraded to "outperform" from "market perform" by BMO Nesbitt Burns.
Barclays initiated coverage on Valeant Pharmaceuticals Inc. with an "overweight" rating and price target of $200 (U.S.).
Citigroup initiated coverage on AbbVie Inc. with a "sell" rating and price target of $48 (U.S.).