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.
Markets continue to sail through choppy waters continuing a pattern of up and down days. Downward momentum from Tuesday's selloff followed through Asia Pacific trading but reversed in Europe where the FTSE is up 0.6 per cent and the Dax is up 0.4 per cent.
Crude oil remains in the spotlight with West Texas Intermediate and Brent both up 0.6 per cent and WTI still trading above $45. American Petroleum Institute inventories rose by 1.1 million barrels (mmbbls) less then the 2.9-million-barrel bounce expected by the Street after last week's massive 11-million-barrel decline. This sets the stage for a potentially big Department of Energy storage support. The Street is expecting DOE inventories to rebound 4.0 million barrels after falling a huge 14.5 million barrels last weeek. Another lower-than-expected build would confirm strong energy demand while a higher build could undermine the price rally.
Currencies and bonds have been mixed overnight on continued uncertainty over monetary policy heading into next week's U.S. Federal Reserve and Bank of Japan meetings. The yen continues to weaken on speculation a cut deeper into a negative-rate world may be discussed at next week's BOJ meeting. The British pound is up a bit as slightly better-than-expected U.K. job creation and rising wages indicate a steady-to-strong U.K. economy, putting fears of a Brexit recession further to rest.
The fertilizers and agricultural sectors may be active again today on more merger activity in the group. Earlier in the week, Potash Corp. of Saskatchewan and Agrium Inc. completed a merger deal. This morning, Bayer AG announced it has agreed to purchase Monsanto after raising its bid to $128 (U.S.) per share in cash, which could increase takeover speculation among the remaining independent players in the group.
Today, energy commodities, stocks and related currencies capture the spotlight. The Mexican peso may also continue to attract attention between oil action and polling suggesting Donald Trump leading in the battleground state of Ohio. We also could see positioning ahead of a flood of U.S. economic figures, including retail sales Thursday and inflation on Friday.
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 8:10 a.m. ET)
Dow +0.19 per cent; S&P 500 +0.22 per cent; Nasdaq: +0.31 per cent; TSX 60 -0.13 per cent
Equities
Japan's Nikkei -0.69 per cent
Shanghai composite index -0.69 per cent
Hong Kong's Hang Seng -0.11 per cent
Germany's DAX +0.44 per cent
London's FTSE +0.62 per cent
France's CAC 40 +0.03 per cent
Commodities
WTI crude oil (Nymex Oct.) +0.56 per cent at $45.15 (U.S.) a barrel
Gold (Comex Dec.) +0.15 per cent at $1,325.80 (U.S.) an ounce
Copper (Comex Dec.) +1.26 per cent at $2.13 (U.S.) a pound
Currencies
Canadian dollar +0.01 at 75.93 cents (U.S.)
U.S. dollar index -0.18 at 95.46
Bonds
Canada 10-year bond yield -2.51 at 1.20 per cent
KEY ECONOMIC RELEASES
Japan industrial production
Euro area industrial production
U.K. jobless claims and rate
(6:15 a.m. ET) Bank of Canada Senior Deputy Governor Carolyn Wilkins lectures at the Official Monetary and Financial Institutions Forum in London
(8:30 a.m. ET) U.S. import prices for August. Consensus is a decline of 0.1 per cent from July and an increase of 0.1 per cent year over year.
(10:30 a.m. ET) EIA petroleum status report
KEY STOCKS TO WATCH
Monsanto rose 1.6 per cent to $107.85 in heavy premarket trading after Bayer agreed to buy the seed maker for $128 (U.S.) per share.
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Golf Town, Canada's largest golf retailer, is set to be sold as its struggling U.S. parent company files for bankruptcy protection on Wednesday, according to sources.
Investment firms Fairfax Financial Holdings Ltd. and CI Financial Corp. plan to acquire the Canadian operations of Golfsmith International Holdings Inc.
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Department store chain Macy's rose 1.7 per cent to $35.27 (U.S.) after Citigroup upgraded the stock to "buy".
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Sarepta surged 15.2 per cent to $29.48 (U.S.) after Oppenheimer said an FDA decision was imminent on the drugmaker's highly anticipated Duchenne muscular drug.
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Automaker Ford unveiled a new growth plan which it said would improve underperforming operations and invest in new opportunities. It expects overall financial performance to decline in 2017 as a result, but rebound in 2018.
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Ruby Tuesday said its Chief Executive Officer James Buettgen has resigned, after the board called for his removal because of the restaurant chains' poor performance.
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Pershing Square's Bill Ackman sold 3.6 million shares of Air Products, bringing his holdings down to 16.9 million shares or 7.8 percent of the industrial gas company.
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Earnings include: Aberdeen International Inc.; AlarmForce Industries Inc; CLARCOR Inc.; Cracker Barrel Old Country Store Inc.
With files from wire services