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.
Speculation on whether OPEC countries may or may not speak to each other at an upcoming conference can be all well and good for trading on slow days, but there's nothing like actual data to really move markets.
West Texas Intermediate and Brent crude have been driven higher again overnight, boosted by two positive developments. A surprisingly huge 12.1-million-barrel (mmbbl) drop in American Petroleum Institute (API) crude oil inventories kicked things off while better-than-expected China exports and imports kept things going and spread the cheer out to other commodities like copper. In both cases signs of improving demand and/or a decline in the supply overhang has helped to boost the market.
Oil's gains have already helped the Canadian dollar to bounce back from its post-Bank of Canada statement selloff, which was started by signs that Canada's summer rebound may not be as strong as hoped. Energy stocks and commodities may remain active with more inventory reports due for oil, gasoline and natural gas. Traders may particularly look to the U.S. Department of Energy oil report for confirmation of the API figure.
China trade data also helped the Hang Seng to outperform gaining 0.75 per cent overnight. The FTSE is up 0.3 per cent while U.S. index futures are ahead less than 0.1 per cent.
The euro has been climbing today after the European Central Bank monetary policy decision where the central bank held interest and deposit rates steady and indicated it plans to continue asset purchases at the current level of 80-billion euros per month through March, 2017, as planned and beyond if necessary. This news sent doves hoping for more stimulus scrambling to get back on side. With the common currency trading higher, continental indices like the Dax, CAC, IBEX and FTSEMIB have been falling. ECB President Draghi's press conference at 8:30 am EDT may shed more light on the monetary policy outlook.
The central bank's 25-member governing council left its benchmark rate at zero and its rate on deposits from commercial banks at minus 0.4 per cent.
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 8 a.m. ET)
Dow +0.02 per cent; S&P 500 +0.02 per cent; Nasdaq: -0.02 per cent; TSX 60 +0.16 per cent
Equities
Japan's Nikkei -0.32 per cent
Shanghai composite index +0.15 per cent
Hong Kong's Hang Seng +0.75 per cent
Germany's DAX -0.19 per cent
London's FTSE +0.36 per cent
France's CAC 40 -0.05 per cent
Commodities
WTI crude oil (Nymex Oct.) +1.69 per cent at $46.27 (U.S.) a barrel
Gold (Comex Dec.) +0.14 per cent at $1,351.10 (U.S.) an ounce
Copper (Comex Dec.) -0.17 per cent at $2.09 (U.S.) a pound
Currencies
Canadian dollar +0.05 at 77.68 cents (U.S.)
U.S. dollar index -0.32 at 94.64
Bonds
Canada 10-year bond yield +1.22 at 1.01 per cent
KEY ECONOMIC RELEASES
Japan current account surplus and real GDP
ECB monetary policy meeting
(8:30 a.m. ET) Canada capacity utilization for Q2. Estimate is 79 per cent, down from 81.4 per cent in Q1.
(8:30 a.m. ET) Canada building permits for July. Estimate is an increase of 3.0 per cent from June.
(8:30 a.m. ET) Canada new housing price index for July. Estimate is an increase of 0.1 per cent from June and 2.5 per cent year over year.
(8:30 a.m. ET) U.S. initial jobless claims for week of Sept. 3.
The number of Americans filing for unemployment benefits unexpectedly fell last week, pointing to sustained labor market strength even as the pace of job growth is slowing. Initial claims for state unemployment benefits decreased 4,000 to a seasonally adjusted 259,000 for the week ended Sept. 3, the lowest level since mid-July, 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.
(11 a.m. ET) EIA petroleum status report
(12:05 p.m. ET) Bank of Canada deputy governor Timothy Lane speaks at the Thunder Bay Chamber of Commerce.
(3 p.m. ET) U.S. consumer credit for July. Consensus is an increase of $15.1-billion from June.
KEY STOCKS TO WATCH
Moody's Investors Service Inc. is sticking to its negative outlook for Enbridge Inc. until the ratings agency sees its massive deal to buy Spectra Energy Corp. close, and the new, combined entity's debt paid down. The $37-billion deal, announced Tuesday, will bring together an impressive grouping of oil and gas pipeline, midstream, utility and renewable assets. But it will also leave debt levels uncomfortably high, at least initially.
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Transat A.T. Inc. says it's feeling the impact of an unsettled transatlantic travel market this summer, with net income down 28.2 per cent and adjusted earnings down almost 91 per cent from the same time last year. The Montreal-based company's net income dropped to $9.4 million or 26 cents per share, from $13.1 million or 34 cents per share in last year's third quarter.
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Apple shares were down 0.6 per cent at $107.72 (U.S.) in premarket trading, a day after the company unveiled an iPhone 7 with high-resolution cameras and no headphone jack at its annual launch event.
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Tractor Supply was down 10.5 per cent at $74.77 after the home improvement and pet care products retailer lowered its full-year guidance.
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Tesla fell 1.3 per cent to $199 after Cowen & Co began coverage of the stock with an "underperform" rating.
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Nike fell 1.8 per cent to $56.68 after Piper Jaffray downgraded the shoemaker's stock to "neutral" from "overweight."
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Computer products maker Hewlett Packard Enterprise reported adjusted quarterly profit of 49 cents per share, five cents a share above estimates. Revenue did come in below forecasts, although the company gave upbeat current-quarter earnings guidance. Separately, the company announced it would spin off its non-core software assets and merge them with Britain's Micro Focus International in an $8.8-billion transaction.
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Liberty Media announced a deal to buy Formula One Racing for $4.4-billion from CVC Capital and its consortium partners.
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Intel said it will spin off its cybersecurity unit that was formerly known as McAfee, and will sell a majority stake to private-equity firm TPG for $3.1-billion in cash. Intel had bought McAfee in 2011 for $7.7-billion.
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Pier 1 announced the departure of CEO Alex Smith as of Dec. 31 after nearly 10 years at the helm. At the same time, the retailer reported a comparable-store sales drop of 4.3 per cent for the second quarter and that it expected a larger-than-expected quarterly loss of five to six cents per share.
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Samsung is selling half its stake in Dutch semiconductor equipment maker ASML Holding. Financial terms were not revealed.
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Earnings include: Barnes & Noble Inc.; Descartes Systems Group Inc.; Dominion Diamond Corp.; Enghouse Systems Ltd.; Lumenpulse Inc.; North West Company Inc.; Tecsys Inc.; Transat AT Inc.
With files from wire services