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.
Stock markets around the world are trading higher to kick off September on a positive note, particularly in Europe. The Dax is up 0.4 per cent while the CAC is up 1.0 per cent, the IBEX up 1.6 per cent and the FTSEMIB up 1.4 per cent. U.S. index futures are up 0.2 per cent while the FTSE is up only marginally, held back by a big figure rally in the British pound.
Positive sentiment to start what has historically been a volatile month for stocks has been driven by a number of positive manufacturing reports. A number of countries either beat the Street or improved over last month. Both the U.K. and China climbed back above 50, boosting the Hang Seng and igniting a rally in British pound. Japan and Spain also posted positive numbers. PMI showing that the feared Brexit recession was a pipe dream also appears to be helping stocks on the continent where indices had been underperforming for much of the year, giving them lots of room for catch up.
Moving to North America Thursday, U.S. and Canadian manufacturing PMI reports plus U.S. construction data may attract attention from traders. In the U.S., data may be seen through the lens of U.S. Federal Reserve speculation with traders considering whether an event makes a September rate hike more or less likely.
The Canadian dollar could be active on the Canadian PMI report with traders interested in whether the rebound from the Fort McMurray wildfire that GDP figures showed starting in June has continued into the summer.
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 +0.20 per cent; S&P 500 +0.16 per cent; Nasdaq: +0.28 per cent; TSX 60 +0.24 per cent
Equities
Japan's Nikkei +0.23 per cent
Shanghai composite index -0.73 per cent
Hong Kong's Hang Seng +0.81 per cent
Germany's DAX +0.44 per cent
London's FTSE +0.08 per cent
France's CAC 40 +0.97 per cent
Commodities
WTI crude oil (Nymex Oct.) -0.11 per cent at $44.65 (U.S.) a barrel
Gold (Comex Dec.) -0.10 per cent at $1,310.10 (U.S.) an ounce
Copper (Comex Dec.) +0.53 per cent at $2.09 (U.S.) a pound
Currencies
Canadian dollar -0.08 at 76.16 cents (U.S.)
U.S. dollar index -0.04 at 95.98
Bonds
Canada 10-year bond yield +0.7377 at 1.03 per cent
KEY ECONOMIC RELEASES
G20 Finance and Central Bank Deputies hold a meeting.
Japan reports its second quarter capital spending and August manufacturing PMI.
Euro area, U.K., and China reports on their August manufacturing PMI.
Canadian automakers release their August sales figures.
U.S. releases the Ward's Total Vehicle Sales report, expected to show a 4.9 per cent annual decrease to 17-million units on an annual basis.
(7:30 a.m. ET) U.S. release the Challenger layoff report for August.
(8:30 a.m. ET) U.S. reports its Aug. 27 initial jobless claims and Aug. 20 continuing jobless claims.
The number of Americans filing for unemployment benefits rose less than expected last week, pointing to sustained labor market strength that could push the Federal Reserve closer to raising interest rates.
Initial claims for state unemployment benefits increased 2,000 to a seasonally adjusted 263,000 for the week ended Aug. 27, the Labor Department said on Thursday. Claims for the prior week were unrevised. Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 265,000 in the latest week.
(8:30 a.m. ET) U.S. reports its second quarter productivity and unit labour costs, estimates for a decline of 0.6 per cent annual rate and a 2.1 per cent increase, respectively.
U.S. productivity fell in the April-June quarter by a larger amount than first estimated, while labour costs accelerated sharply. The Labor Department says productivity declined at an annual rate of 0.6 per cent in the second quarter, even worse than the 0.5 per cent drop initially reported. It marked the third straight quarter that productivity has fallen.
Labour costs rose at an annual rate of 4.3 per cent, the biggest rise since a 5.7 per cent increase in the fourth quarter. Labor costs had fallen at a 0.3 per cent rate in the first quarter. Productivity is the amount of output per hour of work. It is the major factor that supports rising living standards and has been lagging in the current seven-year economic expansion.
(9:30 a.m. ET) Canada releases the RBC manufacturing PMI report for August.
(9:45 a.m. ET) U.S. reports the Bloomberg Consumer Comfort Index and its Markit Manufacturing PMI for August.
(10 a.m. ET) U.S. reports its manufacturing ISM for August, with PMI estimates at 52 and Price Paid estimates at 56.
(10 a.m. ET) U.S. reports on its July construction spending, estimates for a 0.5 per cent increase.
KEY STOCKS TO WATCH
Canadian dollar store operator Dollarama Inc. reported an 11.4-per-cent rise in quarterly profit as it added new stores. The company's net income rose to $106.4-million ($81.1-million), or 88 cents per share, in the second quarter ended July 31, from $95.5-million, or 74 Canadian cents per share, a year earlier. Revenue rose to $729-million from $653.3-million.
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Cara Operations Ltd. says it has signed a deal to acquire a majority stake in Original Joe's Franchise Group Inc., for $93-million. Original Joe's franchises and operates 99 restaurants in Canada and the U.S. under three banners – Original Joe's Restaurant & Bar, State & Main Kitchen Bar and Elephant & Castle Pub and Restaurant. Together, they generate about $250-million in sales.
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Bombardier Inc. will suspend production of its large-cabin Global 5000/6000 luxury jets for a period of time next year, two people familiar with the matter said.
The Montreal plane maker made the announcement to employees Wednesday morning, according to Yannick Houle, president of Unifor Local 62, which represents workers at Bombardier's Global completion centre in Dorval, Que.
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Charter Communications rose 4.6 per cent to $269 after the S&P Dow Jones Indices said the cable services company is set to join the S&P 500 index.
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Wynn Resorts rose 3.6 per cent to $92.50 after Macau, the world's biggest casino hub, posted a 1.1 percent rise in gambling revenue in August.
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Salesforce.com dropped 7.2 per cent after the cloud software maker reported a disappointing current quarter revenue.
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Canadian Western Bank reported a decline in earnings in the third-quarter on Thursday and said it expected the low price of oil to continue to impact its clients in the province of Alberta during the rest of 2016. The bank, which mainly lends to clients in the western provinces of Canada, reported net income of $45.6-million, down 11 per cent on the year before. Earnings per share fell by 8 per cent to $0.60.
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Campbell Soup Co., the world's largest soupmaker, reported a smaller-than-expected quarterly profit and said it was disappointed with the performance of its Campbell Fresh business, which sells fresh and organic foods. The company's shares fell 4.5 percent in premarket trading on Thursday.
The net loss attributable to Campbell Soup was $81 million, or 26 cents per share, in the latest quarter, compared with a profit of $17 million, or 5 cents per share, a year earlier. The latest quarter included a pre-tax impairment charge of $141 million related to certain operations at Bolthouse Farms. Excluding items, Campbell Soup earned 46 cents per share, below analysts average estimate of 50 cents, according to Thomson Reuters I/B/E/S. Net sales dipped 0.35 percent to $1.69 billion, but was in line with analysts' estimates.
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Cloud management company Box Inc.'s quarterly revenue jumped 30.3 per cent as the company added customers. Its net loss narrowed to $38.1-million (U.S.), or 30 cents per share, in the second quarter ended July 31 from $50.2-million, or 42 cents per share, a year earlier. Revenue rose to $95.7-million from $73.5-million.
Earnings include: Ambarella Inc; Broadcom Ltd; Campbell Soup Co; Canadian Western Bank; Celadon Group Inc; Ciena Corp; Dollarama Inc; Gendis Inc; Genesco Inc; Lands End Inc; Lululemon Athletica Inc; SeaChange International Inc; Smith & Wesson Holding Corp; Verifone Systems Inc;
With files from wire services