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U.S. stock futures have made a dramatic recovery in the premarket, erasing earlier losses that at one point had suggested a deep plunge at today's market open.
Dow and S&P 500 stock futures are now hovering in close to unchanged after earlier being down around 0.7 per cent.
Nevertheless, it's an unsettling day in global markets and a bevy of key corporate earnings reports here at home will be keeping traders busy.
Globally, a selloff in European bonds is showing few signs of abating, rattling traders' nerves who were also given no comfort in Fed Chair Janet Yellen's comments Wednesday that stocks and bonds are now richly valued.
The yield on 10-year German bunds surged 15 basis points today to 0.74 per cent, the highest level so far this year, a signal that inflationary concerns are becoming a dominant market factor. Crude oil's bounceback over the past month to above the $60 (U.S.) per barrel level has been perceived as negative for sovereign bonds.
Many key Canadian earnings reports have been released in the premarket, and it's been a mixed bag. Bombardier, Magna, Canadian Natural Resources, and Telus all beat Street expectations for adjusted earnings per share, but Manulife, SNC-Lavalin and Quebecor missed.
The TSX energy sector today will no doubt be in the spotlight again after dropping 2.5 per cent on Wednesday following the New Democratic Party win in oil-rich Alberta.
The election win has brought uncertainty to the oil patch after 44 years of Conservative rule. Some observers suggest, however, that it's way too soon to know the real impact of the leadership change and investors may have overreacted on Thursday.
More broadly for markets today, the U.S. will release jobless claims numbers for last week - a precursor to the big nonfarm payrolls report on Friday. Strong numbers will ignite more speculation that the U.S. Federal Reserve is about to pull the trigger on hiking interest rates. Ms. Yellen Wednesday didn't offer a lot of comfort to investors, warning that both stocks and bonds are now richly valued. Ms. Yellen said bond yields "could see a sharp jump" when the Fed raises its benchmark interest rate. Most Fed officials predict that will happen this year for the first time since 2006.
Some have observed that the prospect of an adverse market reaction could make the Fed wary about raising rates too soon and too rapidly.
Nerves are still jangling in Europe and shares and bonds got off to another poor start on fears the recent surge in yields, the euro and energy costs could snuff out the only recently formed hopes of a solid euro zone recovery. Asia saw fresh selling overnight. MSCI's broadest index of Asia-Pacific shares outside Japan fell 1 per cent as shares retreated in China, Hong Kong, Australia, South Korean and Malaysia.
Now, here's a closer look at what's going on this morning and what is still to come.
Futures:
S&P 500 -0.3 per cent; Dow -0.3 per cent; Nasdaq -0.2 per cent
Equities:
Hong Kong's Hang Seng -1.27 per cent
Shanghai composite index -2.77 per cent
Japan's Nikkei -1.23 per cent
London's FTSE 100 -1.06 per cent
Germany's DAX -0.23 per cent
France's CAC 40 -0.71 per cent
Stoxx 600 -0.43 per cent
Commodities:
WTI crude oil (Nymex Jun) +0.39 per cent at $61.17 (U.S.) a barrel
Gold (Comex Jun) -0.59 per cent at $1,183.30 (U.S.) an ounce
Copper (Comex Jul) +0.19 per cent at $2.93 (U.S.) a pound
Currencies:
Canadian dollar at 82.82 (U.S.), down 0.0023
U.S. dollar index +0.01 at 94.10
Bonds:
U.S. 10-year Treasury yield 2.24, -0.16 per cent
ECONOMIC DATA:
Canada building permits for March rose 11.6 per cent from February versus expectations for a 2.0 per cent rise.
U.S. initial jobless claims for week were 265,000, vs. expectations for 278,000, but higher than the previous week's 262,000.
OTHER MARKET EVENTS:
UK General Election
U.S. monthly chain store sales
STOCKS TO WATCH:
Canada's Bombardier said it was preparing to list a minority stake in its railway unit and reported a quarterly profit that comfortably beat market expectations. The IPO is expected in the fourth quarter and the primary listing is likely to be in Germany. Excluding items, the company earned 9 cents per share in the quarter ended March 31, above average analysts' estimate of 5 cents per share.
Manitoba Telecom Services Inc said it would cut jobs by 25 per cent as part of a strategic review. The company also said that it would slash its annual dividend to $1.30 per share from $1.70. Manitoba also said it planned to reduce its capital expenditure by 20-30 per cent.
Canadian Natural Resources reported adjusted EPS of 2 cents a share vs. an expected 5 cent loss.
Telus reported adjusted EPS of 70 cents vs. the expected 66 cents.
SNC-Lavalin reported Q1 adjusted EPS of 38 cents vs. the estimated 49 cents.
Magna International reported Q1 EPS of $1.12 US vs. the estimated $1.10.
Molson Coors reported Q1 core EPS of 46 cents (U.S.) vs. the estimated 45 cents.
Alibaba Group Holding's American depository shares were up 7.5 per cent in premarket trading after reporting quarterly results. The company also said that CEO Jonathan Lu will step down, effective May 10, and would be replaced by chief operating Officer Daniel Zhang. Alibaba's revenue jumped to $2.81 billion in the quarter ended March 31, beating the average analyst estimate of $2.77 billion. Adjusted EPS of 48 cents beat the Street view of 42 cents.
Manulife Financial announced a 10 per cent increase to its quarterly dividend. Core earnings were 39 cents a share, missing the average analyst forecast of 42 cents.
Quebecor hiked its quarterly dividend to 3.5 cents from 2.5 cents and reported an adjusted EPS of 33 cents on revenues of $948.6-million. That missed Street estimates of 44 cents and $956.9-million, respectively.
Other earnings today include: Aeterna Zentaris; Alcatel-Lucent SA; Ameren Corp.; Apache Corp.; Aramark; ArcelorMittal SA; Artis REIT; AutoCanada; Black Diamond; Calgon Carbon Corp.; CBS Corp.; CDW Corp.; Claude Resources; Cominar REIT; Cott Corp.; Crescent Point Energy Corp.; Dorel Industries; Extendicare; Fortress Paper; Gluskin Sheff; Great-West Lifeco; Houghton Mifflin Harcourt Company; HudBay; Hyperion Therapeutics Inc.; Industrial Alliance; ING Groep NV; Jazz Pharms Plc; Kemper Corp.; Liberty Global Plc; Magna Intl Inc.; Monster Beverage Corp.; Norwegian Cruise Line Hldgs Ltd.; OGE Energy; Pengrowth Energy; Ritchie Bros.; Sierra Wireless; Silver Wheaton Corp.; SNC-Lavalin; Talisman; Timbercreek; Time Inc; Western Forest; Westport Innovations; Zynga Inc.
ANALYST ACTIONS:
Raymond James downgraded Finning International to "market perform" from "outperform" with a price target of $26 (Canadian).
Raymond James upgraded Savanna Energy Services to "outperform" from "market perform" and raised its price target to $2.75 (Canadian) from $2.25.
With files from wire services
Darcy Keith