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Jennifer Dowty

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

Good Tuesday morning to you. Markets appear set to open higher, with North American futures in positive territory after Monday's market mayhem. But it may not be enough to erase Monday's losses. The S&P/TSX composite declined over 300 points on Monday, or just over 2 per cent, wiping out its year-to-date gains. The Dow Jones industrial average, the S&P 500 index, and the Nasdaq composite index all experienced their worst day in 2015.  S&P 500 futures this morning are up about 0.5 per cent.

Today marks the halfway point of the trading year and the S&P/TSX composite index hasn't exactly been on fire, posting a year-to-date loss of 0.97 per cent. Markets south of the border have also delivered paltry returns for the first half of 2015. The Dow Jones industrial average is down 1 per cent and the S&P 500 Index is relatively unchanged.

Major European markets are seeing some stability today although they are down slightly. France's CAC Index is down 0.39 per cent, Germany's DAX Index is down 0.33 per cent, and London's FTSE Index is down 0.56 per cent.

There are media reports that European Commission President, Jean-Claude Juncker, made an offer to Greece. However, for now, there is just hope and speculation, not any clear indicators that an agreement will be reached today as the country is poised to default on its debt obligations.

Even though they were overshadowed by Greece, there were several European economic reports out today. June euro zone inflation data were released and showed a rise of 0.2 per cent from a year ago, in-line with expectations. Germany's unemployment rate was 6.4 per cent, in-line with expectations. Italy's unemployment rate was 12.4 per cent, relatively in-line with the 12.3 per cent consensus estimate. U.K. GDP for the first-quarter was revised higher to 2.9 per cent year-over-year from 2.4 per cent, supporting the likelihood of an interest rate hike by the  Bank of England in 2016.

Commodities are relatively stable this morning. Crude oil remains firmly in the U.S. $57.50 to U.S. $62 range. Gold has been holding steady this week.

Overseas, major Asian indexes were higher today. Japan's Nikkei was up modestly, 0.63 per cent. However, Chinese volatility persists with the Shanghai Stock Exchange composite index soaring 5.55 per cent and the Shenzhen Stock Exchange composite index climbing 4.8 per cent. The Chinese markets have been experiencing high intraday market volatility and I would expect this volatility to persist.

In corporate news, more positive news has been released out of the health-care sector. This sector is the top performing sector in the S&P/TSX composite index year-to-date and in the Nasdaq composite index.  Late Monday, U.S. pharmaceutical companies Celgene and Juno Therapeutics announced a 10-year partnership in the development and commercialization of cancer and autoimmune diseases therapies. Celgene will make an approximate $1-billion (U.S.) investment in Juno. Juno shares are soaring 36 per cent in the premarket.

The health-care sector remains attractive as it offers investors catalysts such as mergers and acquisition announcements, successful trial results and drug approvals announcements. It's a sector investors should have some exposure to.

Economic news out today is expected to take a backseat to Greek events as they continue to unfold. However, in Canada, April GDP figures were released and showed a modest contraction for the month versus expectations for a 0.1 per cent rise. Year-over-year, April GDP was 1.2 per cent, below economists' forecasts of 1.5 per cent with weakness in energy and mining persisting. This data is not expected to have an impact on today's trading action on S&P/TSX composite index. The Bank of Canada is likely to maintain rates at current levels for the balance of the year.

A key economic release that investors should watch is Thursday's U.S. non-farm payroll data as it will provide more insights into the health of the U.S. labour market and be an indicator of whether or not the Fed will raise interest rates in September.

The Bottom Line: Over the days ahead, Greek headlines and speculative media reports will impact the markets, heighten volatility, and keep investors on the sidelines. I would not be buying any rally that we see today as I believe we have not yet seen a bottom in the markets until there is clarity on the Greek situation.

Now, here's a closer look at the market numbers and what else is going on this morning.

MARKET DATA:

Futures
S&P 500 +0.5 per cent; Dow +0.4 per cent; Nasdaq +0.4 per cent

Equities
Hong Kong's Hang Seng +1.09 per cent
Shanghai composite index +5.53 per cent
Japan's Nikkei +0.63 per cent
London's FTSE 100 -0.61 per cent
Germany's DAX -0.42 per cent
France's CAC 40 -0.39 per cent
Stoxx 600 -0.56 per cent

Commodities
WTI crude oil (Nymex Aug) +0.58 per cent at $58.67 (U.S.) a barrel
Gold (Comex Aug.) -0.50 per cent at $1,173.00 (U.S.) an ounce
Copper (Comex Sep) -0.99 per cent at $2.61 (U.S.) a pound

Currencies
Canadian dollar at 80.61 (U.S.), -0.0011
U.S. dollar index +0.426 at 95.21

Bonds
U.S. 10-year Treasury yield 2.35 per cent, +0.02

ECONOMIC INDICATORS:


Canada April GDP down 0.1 per cent from March vs. economists' expectations for a 0.1 per cent rise.
U.S. S&P Case-Shiller Home Price Index for April showed a 4.2 per cent rise from a year earlier. Consensus was an increase of 0.8 per cent from March and a 5.6-per-cent increase year over year.
(9:45 a.m. ET) U.S. Chicago PMI for June. Consensus is 50.0, compared to 46.2 in May

STOCKS TO WATCH:

The Ontario Teachers' Pension Plan says it has an agreement with Cenovus Energy Inc. to acquire Cenovus's wholly-owned subsidiary, Heritage Royalty Limited Partnership, in a deal worth about $3.3 billion. Calgary-based Heritage Royalty holds a broad portfolio of oil and gas royalties in Western Canada.

Sun Life Financial Inc. said Tuesday it will acquire Redmond, Wash.-based investment manager Prime Advisors Inc., marking the Canadian insurer's latest move to expand in the U.S. asset-management market. Terms were not disclosed.

WSP announced that it is acquiring Faveo Group, a project management firm based in Norway and Sweden. This acquisition will expand the company's European footprint, with its first entry into the Norwegian market and strengthen its current position in Sweden, adding 400 employees. Terms of the deal were not disclosed.

General Electric Co said it would sell its European private equity financing business to a unit of Japan's Sumitomo Mitsui Banking Corp (SMBC) for $2.2 billion.

Conagra announced it is exiting its private brands business and reported fiscal fourth-quarter EPS in line with expectations.

U.S. pharmaceutical companies Celgene and Juno Therapeutics announced a 10-year partnership in the development and commercialization of cancer and autoimmune diseases therapies. Celgene will make an approximate $1-billion (U.S.) investment in Juno.

ANALYST ACTIONS:

Deutsche Bank downgraded Sysco to "hold" from "buy" and cut its price target to $40 (U.S.) from $50.

QUOTE OF THE DAY:

"It does not matter how slowly you go as long as you do not stop. "  Confucius

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