Colin Cieszynski
The Before the Bell report is compiled by editors of The Globe and Mail and is updated throughout the morning to reflect latest developments. Colin Cieszynski, Chartered Financial Analyst and Chartered Market Technician, is chief market strategist with CMC Markets.
U.S. markets are trading slightly lower as traders continue to digest hawkish U.S. Federal Reserve comments out of last weekend's conference in Jackson Hole, Wyo. and anticipate the big payroll and PMI reports which start Wednesday. The Dow and S&P futures are down 0.02 per cent while Nasdaq futures are down 0.18 per cent dragged down by Apple. The FTSE is up slightly coming back from a holiday while the Dax is up 1.0 per cent.
The U.S. dollar is slightly stronger against gold and major currencies while West Texas Intermediate crude oil has bounced back a bit, climbing 0.7 per cent. Fed Vice chair Stanley Fischer, who called for a September rate hike following Fed Chair Janet Yellen's Friday comments, indicated Tuesday in an interview that he's not looking at a 'one and done' increase, leaving the door open to a second hike in December or March.
It's a quieter day for economic news but there are a number of big corporate developments which could move individual stocks and sectors Tuesday.
Apple is in the spotlight for all the wrong reasons today after the EU ruled that Ireland gave Apple undue tax benefits of up to €13-billion of undue tax benefits between 2002 and 2014 and ordered the country to collect. Ireland is expected to appeal but the news could put pressure on Apple shares this morning. It also could impact trading in other big multinationals who have benefitted from playing countries off each other to lower their tax rate. Companies with a big presence in the EU could be particularly impacted with their more aggressive focus on tax avoidance at the moment.
Hershey may also see support cave in Tuesday after Mondelez dropped it's takeover big for the candy maker.
In Canada Tuesday, the banks are back in focus with Bank of Nova Scotia posting strong earnings of $1.54 per share beating the Street's $1.48 estimate. Gains were balanced across the Canadian, International and Markets divisions. The bank's provision for credit losses of $571-million was less than expected and a small dividend increase can be seen as a positive.
Now, here is a closer look at what's going on this morning and what is still to come.
MARKET DATA:
Futures (as of about 7:30 a.m. ET)
Dow -0.01 per cent; S&P 500 -0.02 per cent; Nasdaq: -0.18 per cent; TSX 60 +0.02 per cent
Equities
Japan's Nikkei -0.07 per cent
Shanghai composite index +0.20 per cent
Hong Kong's Hang Seng +0.85 per cent
Germany's DAX +0.96 per cent
London's FTSE +0.07 per cent
France's CAC 40 +0.74 per cent
Commodities
WTI crude oil (Nymex Oct.) +0.66 per cent at $47.29 (U.S.) a barrel
Gold (Comex Dec.) -0.27 per cent at $1,323.60 (U.S.) an ounce
Copper (Comex Dec.) +0.22 per cent at $2.08 (U.S.) a pound
Currencies
Canadian dollar -0.05 at 76.73 cents (U.S.)
U.S. dollar index +0.18 at 95.76
Bonds
Canada 10-year bond yield +0.7476 at 1.03 per cent
KEY ECONOMIC RELEASES
Japan reports its July jobless rate, household spending and retail sales.
Euro area reports its August consumer confidence and economic confidence data.
Germany reports on its August consumer price index.
The Central Bank of Brazil holds its monetary policy meeting.
(8:30 a.m. ET) Canada reports on its current account deficit for the second quarter. Estimates are at $20.2-billion or $80.7-billion annual rate.
(8:30 a.m. ET) Canada reports on its July industrial product price index (estimates for a 0.1 per cent decline) and its raw materials price index (estimates for a 1.0 per cent decrease).
Investor demand for gold and silver in the wake of Britain's vote to leave the European Union in late June helped push Canadian producer prices up by 0.2 percent in July, Statistics Canada said on Tuesday.
Analysts in a Reuters poll had predicted a 0.1 percent decline from June. Overall, 13 of the index's 21 major components were higher, while five dropped and three were unchanged.
(9 a.m. ET) U.S. releases the S&P Case-Shiller home price index for June, with estimates of a 0.9 per cent increase to 5.2 per cent year over year.
(10 a.m. ET) U.S. releases its August Conference Board consumer confidence index, with an estimated reading of 97.8.
KEY STOCKS TO WATCH
Bank of Nova Scotia continued the winning streak among Canada's largest banks this earnings season, reporting upbeat results and showing a sharp decline in energy-related loan losses.
Scotiabank, Canada's third largest lender by assets, reported a profit of more than $1.9-billion, up 6 per cent, in its fiscal third quarter.
After making some one-time adjustments, the bank's profit was $1.54 a share, topping analysts' expectations of $1.48 a share and making Scotiabank the fifth consecutive bank this reporting season to exceed estimates.
Scotiabank also raised its quarterly dividend by 2 cents a share, to 74 cents.
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Apple Inc. fell 1.87 per cent to $104.92 in heavy premarket trading after European Union antitrust regulators ordered the iPhone maker to pay $14.5-billion (U.S.) to the Irish government, ruling that a scheme to route profits through Ireland was illegal state aid. The stock was the biggest percentage loser among S&P 500 components.
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ScanSource dropped 13.41 per cent to $37.13 after the company reported quarterly revenue that missed analysts' estimates.
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Twin Butte Energy Ltd. is set to be shopped around through a receivership after its debt holders rejected a proposed takeover bid, leaving the company with few options as it sought ways to repay lenders.
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Oreo cookie maker Mondelez International Inc. says it has ended discussions to buy Hershey Co., a combination that would have created a global powerhouse selling some of the world's best known chocolates and snacks. Hershey had said in June that it rejected a preliminary takeover bid from Mondelez valued at roughly $22.3-billion (U.S.), according to FactSet.
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Earnings include: Abercrombie & Fitch Co; Bank of Nova Scotia; H & R Block Inc; Palo Alto Networks Inc;
See also: Tuesday's small-cap stocks to watch
With files from wire services