Before the bell: Stocks poised for further gains

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Jennifer Dowty, a Chartered Financial Analyst, writes exclusively for Globe Unlimited subscribers. The Before the Bell report is updated throughout the premarket to reflect latest developments.

Overseas markets and U.S. stock futures are up in Thursday's trading action amid optimism that a resolution to the debt situation in Greece may be resolved shortly.  At Wednesday's summit meeting in Brussels, Greek elect Prime Minister Alexis Tsipras indicated to the European Union leaders that he is firmly committed to working with creditors to resolve its debt situation. Germany and France also expressed a strong commitment to work closely with Greece. German Chancellor Merkel said, "The goal is to keep Greece in the euro zone."

U.S. markets rallied Wednesday on this news and European markets are following suit today. Most major European indexes are showing modest gains today, generally under 1 per cent. However, it is the Athens Stock Exchange General Index that is benefiting the most from this news and leading the euro zone rally, currently up 6.8 per cent.

In North America, a key report on U.S. retail sales was released this morning. They came out exactly in-line with expectations - a rise of 1.2 per cent. And the prior month was revised up from zero per cent to 0.2  per cent. U.S. jobless claims also came in relatively in-line with expectations at 279,000 compared to expectations of 275,000.

This is good news for the markets. While it sets the stage for the Fed to lift rates, the Fed will not be pressed to take action at next week's meeting or even at the July meeting with these numbers.  This numbers confirm that the U.S. economy is recovering and second-quarter gross domestic product (GDP) will bounce back into the 2 per cent range, after reporting -0.7 per cent GDP in the first quarter. Post the release of this economic data, futures remain in positive territory.

Global economic conditions remain unsteady. Central banks in two overseas markets cut rates overnight. The Reserve Bank of New Zealand cut in interest rates by a quarter point for the first time since 2011 as the latest economic data has been soft. South Korea also trimmed interest rates for the second time this year to a record low of 1.5 per cent.

Now, here's the rundown on what's going on this morning.

MARKET DATA:

Futures
S&P 500 +0.1 per cent; Dow +0.1 per cent; Nasdaq +0.2 per cent
Equities
Hong Kong's Hang Seng +0.83 per cent
Shanghai composite index +0.31 per cent
Japan's Nikkei +1.68 per cent
London's FTSE 100 +0.23 per cent
Germany's DAX +0.68 per cent
France's CAC 40 +0.49 per cent
Stoxx 600 +0.57 per cent
Commodities
WTI crude oil (Nymex Jly) -1.33 per cent at $61.00 (U.S.) a barrel
Gold (Comex Aug) -0.66 per cent at $1,178.80 (U.S.) an ounce
Copper (Comex Jul) -1.98 per cent at $2.69 (U.S.) a pound
Currencies
Canadian dollar at 81.20 (U.S.), -0.0032
U.S. dollar index +0.390 at 95.03
Bonds
U.S. 10-year Treasury yield 2.48 per cent, +0.003

ECONOMIC INDICATORS:

Canada new housing price index for April. Prices rose 0.1 per cent from March versus expectations for a 0.2 per cent rise.

U.S. initial jobless claims for week of June 6. They came in at 279,000, versus expectations for 275,000.

U.S. retail sales for May. They rose 1.2 per cent, in line with expectations.

(10 a.m. ET) U.S. business inventories for April. Estimate is an increase of 0.2 per cent from March

OTHER MARKET EVENTS:

(10:30 a.m. ET) Bank of Canada financial system review

(11:15 a.m. ET) Bank of Canada governor Stephen Poloz holds press conference on financial system review

STOCKS TO WATCH:

Lululemon  founder Chip Wilson and his family plans to cash out its remaining 15 per cent stake in the yogawear company. The former chairman has spent the past 4 1/2 years paring down his stake, from 46 million share to 20 million now. Shares of the clothing retailer are down 1.75 per cent in the premarket.

Transat reported a quarterly loss of 17 cents a share vs. a 21 cents loss estimate a year ago.

Com Dec reported a Q2 loss of 5 cents a share vs. an estimated EPS of 6 cents.

BRP reported a Q1 adjusted EPS of 31 cents vs. an estimated EPS of 15 cents.

Other earnings today include include: Restoration Hardware Holdings Inc. and Transcontinental.

ANALYST ACTIONS:

Canaccord Genuity downgraded Cineplex to "hold" from "buy" and cut its price target to $49 (Canadian) from $52.

Desjardins Securities downgraded Dollarama to "hold" from "buy" but raised its price target to $76 (Canadian) from $75.

Raymond James upgraded Toromont Industries to "outperform" from "market perform" and maintained a $34.25 (Canadian)price target.

TD Securities upgraded Enerplus Corp. to "buy" from "hold" and hiked its price target to $16 (Canadian) from $14.