The Before the Bell report is updated throughout the premarket to reflect the latest news developments and market moves. Check back later for updates.
Futures for the Dow, S&P 500, and TSX are pointing to mild gains for the major indexes at today's open. Crude oil its taking up where it left off Tuesday, rising more than 2 per cent to well above the $60 (U.S.) a barrel level, finding continued support from a weaker U.S. dollar and a disruption to crude exports from Libya. While that will be supportive to energy stocks today, market sentiment for Canadian oil and gas stocks could be weak after the NDP's win in the Alberta election Tuesday night.
The energy sector, the province's dominant industry and one that's been friendly with the Progressive Conservatives, will find itself dealing with a left-of-centre premier and ruling party that have been among its harshest critics on issues of royalties, taxes and environmental policy.
"A promise to review the royalties picture, raise the corporate income tax rate by 2 points to 12 per cent, and a commitment to stop publicly supporting pipeline initiatives like Keystone and Northern Gateway are among the factors that may motivate a significant repricing of energy stocks this morning," Scotiabank analysts said in a note this morning.
"After the immediate reaction settles, at least a partially offsetting influence will be that oil prices are higher again this morning and on a tear of late which stands in sharp contrast to the PCs aborted attempt to hike oil and gas royalties starting in 2009 and back in the depths of the global financial crisis. If oil is back on an upswing, then the effects could be at least partially offsetting along with the reasonable assumption that policy changes are likely to be pursued gradually and in balanced fashion with an eye on the next election," Scotia added.
Energy markets will also take in the latest crude inventories reading later this morning from the Energy Information Administration, after U.S. crude pierced through the $60 (U.S.) per barrel level on Tuesday for the first time this year. A Reuters poll said commercial crude stocks may have risen by nearly 2 million barrels last week, building for a record 17th straight week.
It's another heavy day of U.S. and Canadian earnings, highlighted by such names as Enbridge and Brookfield Asset Management in Canada, and Marathon Oil and Wendy's in the U.S. Enbridge's adjusted earnings per share missed the average analyst forecast by 3 cents, although the pipeline company did reaffirm its earnings outlook for this year.
The state of the U.S. labour market is also in focus, with the release of the ADP national employment report for April. It missed analysts' expectations, an ominous sign ahead of the all-important U.S. nonfarm payrolls report on Friday.
Fed watchers will be closely monitoring comments from chair Janet Yellen later this morning. The general feeling right now is that the Fed will hold off hiking interest rates at least until September, given the still wobbly domestic economy. Jeffrey Gundlach, chief executive of investment firm DoubleLine Capital and considered one of the world's top investors in bonds, said on Tuesday he believes the U.S. Federal Reserve will probably not raise interest rates this year, in part because of a lack of wage inflation.
In overseas markets, a worldwide selloff in government bonds deepened on Wednesday, with the rise in yields to their highest level this year spreading unease across all asset classes and putting stock markets around the world under pressure.
European equities struggled to stop the rot after a rout on Tuesday, as soaring bond yields dampened any relief from a growing consensus that the damaging threat of deflation across the continent may be disappearing. However, European equities have largely recouped losses as the morning bell approaches, thanks to strong euro zone services data and corporate earnings results.
The selloff pushed Asian stocks to two-week lows on Wednesday as investors worried it might trigger profit-taking in other asset classes, while the U.S. dollar stayed on the backfoot dogged by trade deficit concerns.
Here's a closer look at what's happening in markets and what lies ahead.
Futures:
S&P 500 +0.3 per cent; Dow +0.3 per cent; Nasdaq +0.1 per cent
Equities:
Hong Kong's Hang Seng -0.41 per cent
Shanghai composite index -1.62 per cent
Japan's Nikkei Closed for a holiday
London's FTSE 100 +0.03 per cent
Germany's DAX +0.82 per cent
France's CAC 40 +0.46 per cent
Stoxx 600 +0.08 per cent
Commodities:
WTI crude oil (Nymex Jun) +2.24 per cent at $61.75 (U.S.) a barrel
Natural gas (Nymex Jun) -0.54 per cent at $2.77
Gold (Comex Jun) -0.46 per cent at $1,187.80 (U.S.) an ounce
Copper (Comex Jul) -0.65 per cent at $2.92 (U.S.) a pound
Currencies:
Canadian dollar at 83.23 (U.S.), up 0.0037
U.S. dollar index -0.27 at 94.79
Bonds:
U.S. 10-year Treasury yield 2.20, +0.62 per cent
ECONOMIC DATA:
U.S. ADP national employment report for April. A net 169,000 private sector jobs were created, missing the consensus forecast of 185,000.
U.S. nonfarm productivity for the first quarter declined 1.9 per cent, in line with expectations.
(10 a.m. ET) Canada Ivey Purchasing Managers Index for April
MARKET EVENTS:
(9:15 a.m. ET) U.S. Fed chair Janet Yellen speaks on a panel in Washington
(10:30 a.m. ET) EIA petroleum status report
STOCKS TO WATCH:
Bloomberg reported just ahead of market close Tuesday that Pacific Rubiales Energy Corp., which operates Colombia's largest oil field, has received a takeover approach from its biggest shareholder. Alfa SAB and Harbour Energy Ltd. have made an all-cash offer that values Pacific Rubiales at about $6 (Canadian) a share including debt. Pacific Rubiales rose 18 per cent to $5.50 at the close of trading in Toronto.
Synageva BioPharma Corp. soared 125 per cent after Alexion Pharmaceuticals Inc. agreed to pay $8.4-billion for the biotechnology firm.
Enbridge reported Q1 adjusted EPS of 56 cents vs. the estimated 59 cents. It also reaffirmed its earnings outlook for this year.
Loblaw Companies Ltd. says its quarterly dividend will go up by two per cent, starting in July. The announcement comes as Canada's largest grocery company reported a big jump in first-quarter profit. Net income was up 21.7 per cent from the same time last year, rising to $146 million. Adjusted net income was up 96.7 per cent to $301 million.
Intact Financial reported Q1 operating EPS of $1.37 vs. the Street estimated $1.38.
Kinross Gold Tuesday night reported quarterly adjusted earnings of 1 cent a share, slightly better than the breakeven results expected by analysts.
Other earnings today include: 3D Syss Corp.; Alaris; Anheuser-Busch InBev; ANSYS Inc.; AuRico Gold;Brookfield Asset; Brookfield Renewable Energy Partners LP; Calloway REIT; Chesapeake Energy Corp.; Choice Hotels Intl Inc.; Continental Resources Inc.; Diamondback Energy Inc.; Enerflex; Energen Corp.; Finning; GlaxoSmithKline plc; Great Canadian Gaming; Great Panther; Husky Energy; Keurig Green Mountain Inc.; Kronos Worldwide Inc.; Linamar; Loblaw Cos.; Marathon Oil Corp.; MetLife Inc.; Motorola Solutions Inc.; Nu Skin Enterp Inc ; Prudential Fincl Inc.; Quantum Corp.; Spectra Energy Corp; Sunoco LP; Talisman Energy Inc.; Tesla Motors Inc.; Thompson Creek; Torstar; Transocean Ltd.; TripAdvisor Inc.; TS03; Twenty-First Century Fox Inc.; Wendy's Company; Whole Foods Market Inc.; Xtreme Drilling
MoneyGram soared 23 per cent in premarket trading after Bloomberg reported that Western Union was considering buying its smaller rival.
Herbalife jumped 14.3 per cent to $45.81 after the weight-loss and nutritional products maker raised its full-year profit forecast.
ANALYST ACTIONS:
Merrill Lynch downgraded TD Ameritrade to "neutral" from "buy".
DA Davidson downgraded Louisiana-Pacific to "underperform" from "neutral" with a price target of $14 (U.S.).
With files from wire services
Darcy Keith