A sign board displaying Toronto Stock Exchange (TSX) stock information is seen in Toronto June 23, 2014.© Mark Blinch / Reuters
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 continue to turn back upward as capital returns to risk markets and traders respond favourably to earnings reports. U.S. index futures are up 0.4 per cent with the technology and momentum stock heavy Nasdaq up 0.49 per cent, and the S&P 500 up 0.37 per cent, hitting new highs. The Dow is back above 19,900 with 20,000 in view again. The S&P/TSX 60 futures are up 0.28 per cent, suggesting the composite may test its all-time high of 15,657 later today. Overseas, the FTSE is up 0.3 per cent while the Dax is up 1.4 per cent and the Nikkei gained 1.4 per cent.
Industrial and infrastructure stocks may attract a lot of attention. Building on yesterday's orders to accelerate pipeline and infrastructure project approvals, today U.S. President Donald Trump is expected to tackle immigration, including the building of a wall on the Mexican border. Also, a number of big earnings reports are due with Boeing, Textron and others reporting today, with Caterpillar reporting tomorrow.
In currency markets, the Mexican Peso may be active with the country in the crosshairs of potential U.S. actions related to immigration. Sterling continues to climb amid reports the government is planning a quick path to passing the Brexit bill and moving up its goal of triggering Article 50 to mid-March from the end of March. Gold is still soft with capital leaving defensive havens.
Crude oil may also be active today with a focus on the U.S. market. WTI is down 0.9 per cent this morning after the American Petroleum Institute reported a 2.2-million-barrel (mmbbl) inventory build for last week. In addition to today's Department of Energy inventory reports, the potential for higher supply from expedited approval of the stalled Keystone XL and Dakota Access pipeline projects plus increased exploration and investment in U.S. shale could impact supply demand speculation.
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 +0.4 per cent; S&P 500 +0.37 per cent; Nasdaq: +0.49 per cent; TSX 60 +0.28 per cent
Equities
Japan's Nikkei +1.43 per cent
Shanghai composite index +0.22 per cent
Hong Kong's Hang Seng +0.43 per cent
Germany's DAX +1.38 per cent
London's FTSE +0.24 per cent
France's CAC 40 +0.98 per cent
Commodities
WTI crude oil (Nymex March) -0.90 per cent at $52.70 (U.S.) a barrel
Gold (Comex April) -0.38 per cent at $1,209.00 (U.S.) an ounce
Copper (Comex March) -0.54 per cent at $2.69 (U.S.) a pound
Currencies
Canadian dollar +0.33 at 76.28 cents (U.S.)
U.S. dollar index +0.01 at 101.19
Bonds
Canada 10-year bond yield -0.05 at 1.76 per cent
KEY ECONOMIC RELEASES
Japan trade surplus
Germany IFO Business Climate
Bank of England governor Mark Carney speaks in Germany
(9 a.m. ET) U.S. FHFA House Price Index for November. Consensus is an increase of 0.4 per cent from October and 5.9 per cent year over year.
(10:30 a.m. ET) EIA Petroleum Status Report
KEY STOCKS TO WATCH
Also see: Wednesday's small-cap stocks to watch
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Boeing's shares rose 1.4 percent to $162.80 after the planemaker reported results.
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Seagate shares surged 14.5 per cent to $42.87 in light premarket trading after the hard-disk drive maker forecast current-quarter revenue above estimates, buoyed by strong demand for its cloud-based storage products.
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Aluminum producer Alcoa rose 2.1 per cent to $38.30 after reporting a better-than-expected first quarter revenue.
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Canadian National Railway Co. says its fourth-quarter profit rose by 8 per cent, buoyed by rising grain and fertilizer shipments. CN's profit of $1-billion, diluted per-share earnings of $1.32 and revenue of $3.2-billion were in line with analyst expectations. Its shares were down 0.5 per cent in premarket trading.
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Dream Office REIT began to exit the Calgary and Edmonton real estate markets, announcing it has agreed to sell 12 office buildings in Alberta for approximately $200-million.
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Prem Watsa's Fairfax Financial Holdings Ltd. is close to announcing a deal that would see one of Canada's largest pension funds, the Ontario Municipal Employees Retirement System, contribute $1-billion in financing toward its acquisition of insurer Allied World Assurance Co., according to people familiar with the matter.
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Abbott Laboratories reported quarterly sales just shy of Wall Street's expectations due to waning demand for its nutrition products and a strong dollar, and forecast current-quarter adjusted profit below estimates. The company's net sales rose 2.8 percent to $5.33 billion, just below the Thomson Reuters I/B/E/S estimate of $5.38 billion. Its shares were down 0.9 per cent in premarket trading.
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United Technologies Corp. posted a fourth-quarter profit, compared with a year-ago loss, and reiterated its 2017 profit and sales forecasts, buoyed by demand for Pratt & Whitney aircraft engines and parts for the aerospace industry. On an adjusted basis, United Technologies earned $1.56 per share, matching analysts average estimate. Its shares were down 0.9 per cent in premarket trading.
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Cessna aircraft maker Textron Inc. reported a 4.4 percent fall in quarterly profit, and said it would buy snowmobile and all-terrain vehicle maker Arctic Cat Inc for $247-million in cash. Its shares were down 8.5 per cent in premarket trading.
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Gap Inc. said the global president of its Banana Republic unit, Andi Owen, would leave the company in late February as the apparel retailer looks to stem a relentless decline in sales at the brand. Chief Executive Art Peck, who took over as chief executive in 2015, will directly oversee the brand, while the company searches for Owen's replacement.
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Chipmaker Texas Instruments Inc. reported higher-than-expected quarterly revenue, helped by strong demand for its analog and embedded chip products from the automotive and industrial markets. It forecast current-quarter profit of 78 to 88 cents per share and revenue of $3.17-billion to $3.43-billion. Analysts on average were expecting a profit of 75 cents per share and revenue of $3.21 billion, according to Thomson Reuters I/B/E/S. Its shares were up 0.8 per cent in premarket trading.
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Cisco Systems Inc. agreed to buy U.S. business software company AppDynamics Inc. for about $3.7-billion, making one of its largest deals of recent years as it searches for growth beyond its core networking business. Its shares were up 0.5 per cent in premarket trading.
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JPMorgan Chase upgraded JetBlue's stock to "overweight" from "neutral," while downgrading Southwest to "neutral" from "overweight," based on current valuations and near term passenger revenue figures. Its shares were up 3.2 per cent in premarket trading.
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Barrick Gold Corp. estimated its gold production in 2016 fell 9.8 percent to 5.52 million ounces. The world's largest producer of bullion also estimated 2016 all-in sustaining costs was at or slightly below the low end of its forecast of $740-$775 per ounce of gold.
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Earnings include: Abbott Laboratories; AT&T Inc.; Boeing Co.; Citrix Systems Inc.; eBay Inc.; F5 Networks Inc.; Freeport-McMoRan Inc.; Las Vegas Sands Corp.; McCormick & Company Inc.; McKesson Corp.; Methanex Corp.; Norfolk Southern Corp.; NovaGold Resources Inc.; Progressive Corp.; Raymond James Financial Inc.; United Rentals Inc.; W W Grainger Inc.; Western Digital Corp.
With files from wire services