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.
Yesterday afternoon's rally in North America worked it's way through world markets overnight with the FTSE and Australia gaining 1.0 per cent and the Dax rising 0.7 per cent. A selloff in the yen following a poor retail sales report sent the Nikkei up 1.4 per cent.
U.S. index futures are flat to down this morning consolidating Wednesday's late gains. The energy sector had been the top performer and mainly responsible for the advance. West Texas Intermediate is down 0.15 per cent this morning on a combination of enthusiasm over the OPEC deal fading with key details like production quotas for each country still to be negotiated, and profit-taking against the news. The lack of follow through could drag on energy stocks today.
Today brings another update of second quarter U.S. gross domestic product and another flurry of Fed speakers. With the third quarter nearly over and the Fed unlikely to move until December after the U.S. election, it would take a pretty major surprise to move the markets.
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 8:30 a.m. ET)
Dow -0.16 per cent; S&P 500 -0.21 per cent; Nasdaq: -0.23 per cent; TSX 60 -0.01 per cent
Equities
Japan's Nikkei +1.39 per cent
Shanghai composite index +0.35 per cent
Hong Kong's Hang Seng +0.51 per cent
Germany's DAX +0.42 per cent
London's FTSE +0.92 per cent
France's CAC 40 +0.80 per cent
Commodities
WTI crude oil (Nymex Nov.) -0.15 per cent at $46.98 (U.S.) a barrel
Gold (Comex Dec.) +0.06 per cent at $1,324.50 (U.S.) an ounce
Copper (Comex Dec.) +0.14 per cent at $2.19 (U.S.) a pound
Currencies
Canadian dollar +0.09 at 76.46 cents (U.S.)
U.S. dollar index +0.041 at 95.47
Bonds
Canada 10-year bond yield +0.9509 at 0.9839 per cent
KEY ECONOMIC RELEASES
Japan retail sales
Euro area economic and consumer confidence
Germany unemployment and consumer price index (CPI)
(8:30 a.m. ET) Canada Survey of Employment, Payrolls and Hours for July.
(8:30 a.m. ET) U.S. initial jobless claims for week of September 24. Estimate is 260,000, an increase of 8,000 from the previous week.
The number of Americans filing for unemployment benefits rose less than expected last week and held at relatively healthy levels that could support U.S. Federal Reserve plans to raise interest rates this year. Initial claims for state unemployment benefits rose 3,000 to a seasonally adjusted 254,000 for the week ended Sept. 24, the Labor Department said on Thursday. Economists polled by Reuters had expected the report to show 260,000 new claims.
(8:30 a.m. ET) U.S. real GDP and GDP Deflator for Q2 (final). Consensus is annualized rate increases of 1.1 per cent and 2.3 per cent, respectively.
U.S. economic growth was less sluggish than previously thought in the second quarter as exports grew more than imports and businesses raised their investments, hopeful signs for the economic outlook. Gross domestic product expanded at a 1.4 per cent annual rate, the Commerce Department said on Thursday in its third estimate of GDP. That was up from the 1.1 per cent rate it reported last month and higher than analysts' expectations.
(8:30 a.m. ET) U.S. goods trade deficit for August. Consensus is $62.5-billion, up from $58.8-billion in July.
(10 a.m. ET) U.S. pending home sales for August. Consensus is a decline of 0.1 per cent from July.
(4 p.m. ET) U.S. Fed chair Janet Yellen speaks at Kansas City Fed's Forum for Minority Bankers (via teleconference)
KEY STOCKS TO WATCH
SNC-Lavalin Group Inc. says poorer-than-expected results on two Middle East oil-and-gas projects will have a negative impact on its earnings-per-share outlook for 2016 in its core engineering and construction business. The Montreal-based engineering company said on Thursday it is revising its 2016 outlook for adjusted diluted earnings per share to between $1.30 and $1.60, from its previous forecast of between $1.50 to $1.70. SNC said it continues to target annualized earnings before interest, taxes, depreciation and amortization (EBITDA) of seven per cent in 2017.
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Laurentian Bank of Canada announced plans Wednesday to close dozens of branches and cut about 300 staff, becoming the latest Canadian bank to take action as consumers move to computers and smartphones to make their regular financial transactions.
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Ebay rose 2.4 per cent after Deutsche Bank upgraded the e-commerce platform's rating to "buy" and raised its price target.
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Intra-Cellular plunged 65.76 pe rcent to $14.50 after the company said its schizophrenia drug did not show any clinically significant difference when compared with placebo.
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Fitbit was down 4.9 per cent after pacific Crest downgraded its stock to "underweight."
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PepsiCo reported adjusted quarterly profit of $1.40 per share, eight cents above estimates, while revenue also exceeded forecasts. PepsiCo raised its full-year forecast as well, as demand for snacks and beverages increases.
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ConAgra reported adjusted quarter earnings of 61 cents per share, beating estimates of 48 cents, although revenue was slightly below forecasts
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Consulting firm Accenture reported adjusted quarterly profit of $1.31 per share, a penny above estimates, with revenue also beating forecasts.
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Investor Carl Icahn cut his stake in oilfield services provider Transocean to 1.5 per cent from 5.9 per cent, although Icahn did say he continues to have confidence in Transocean management. He has been trimming his energy-related investments.
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CLSA released a report on the retail industry which rates Coach, Tiffany and Ralph Lauren as "buy" rated, while it calls Michael Kors a "sell."
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Danish drugmaker Novo Nordisk said it cut 1,000 jobs in a cost cutting move, as the world's largest insulin maker tries to deal with what it calls a challenging 2017 environment. It currently has a global workforce of more than 42,000.
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Pier 1 reported a quarterly loss of five cents per share, matching estimates, but the home goods retailer's revenue was weaker than expected on a drop in customer traffic.
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Home builders DR Horton and Toll Brothers are both rated "outperform" in a new Wells Fargo report on the housing industry, with KB Home, Lennar and PulteGroup rated "market perform".
Earnings include: Accenture PLC; ConAgra Foods Inc.; Costco Wholesale Corp.; PepsiCo Inc.; Theratechnologies Inc.; Uranium Participation Corp.
With files from wire services