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 have been relatively quiet overnight in a normal pause while awaiting news. Dow, Nasdaq and S&P futures are up about 0.1 per cent. The Dax is up 0.3 per cent while the FTSE is up 0.4 per cent.
After being up as much as 0.5 per cent, West Texas Intermediate crude oil slipped 0.2 per cent as bounces near the $50 (U.S.) mark. The Canadian dollar has started to head upward suggesting last week's bearishness on weak Canada data has started to blow over. The U.S. dollar is up slightly as traders continue to anticipate a December rate hike following a flurry of Fed speakers just before the blackout period begins ahead of next week's decision.
In the U.K., focus has been on the Heathrow Airport expansion announcement while in the U.S., corporate earnings reports are in the spotlight. Earnings reports to date had been positive overall but today's numbers are very mixed with General Motors, DuPont and Merck posting big beats while Eli Lilly and Whirlpool have missed badly. Caterpillar was mixed with big profits offset by a cut to guidance. This has me wondering if this could become a quarter of extremes with large positive and negative surprises.
After market close brings Apple's earnings report, one of the main events of earnings season. Traders are likely to focus on the success of the iPhone 7 launch and if it was big enough to maintain Apple's status as an unlimited growth company or if it will indicate that Apple may be maturing. Traders may also look for signs or comments on whether Samsung's product problems have benefited Apple.
The weekly American Petroleum Institute crude oil inventory report is also due this afternoon. A surprise drawdown in the last two weeks have provided fundamental support to a market being rocked by on-again, off-again speculation of an OPEC deal with the big meeting still over a month away.
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 8:15 a.m. ET)
Dow +0.08 per cent; S&P 500 +0.09 per cent; Nasdaq: +0.14 per cent; TSX 60 +0.11 per cent
Equities
Japan's Nikkei +0.76 per cent
Shanghai composite index +0.12 per cent
Hong Kong's Hang Seng -0.17 per cent
Germany's DAX +0.32 per cent
London's FTSE +0.44 per cent
France's CAC 40 +0.08 per cent
Commodities
WTI crude oil (Nymex Dec.) +0.14 per cent at $50.59 (U.S.) a barrel
Gold (Comex Dec.) +0.51 per cent at $1,270.10 (U.S.) an ounce
Copper (Comex Dec.) +2.08 per cent at $2.14 (U.S.) a pound
Currencies
Canadian dollar +0.21 at 75.10 cents (U.S.)
U.S. dollar index -0.05 at 98.70
Bonds
Canada 10-year bond yield +1.10 at 1.17 per cent
KEY ECONOMIC RELEASES
Germany Ifo Business Climate
(9 a.m. ET) U.S. S&P Case-Shiller Home Price Index for August. Consensus is up 0.2 per cent from July and 5.1 per cent year over year.
(9 a.m. ET) U.S. FHFA House Price Index for August. Consensus is an increase of 0.5 per cent from July and 6.0 per cent year over year.
(10 a.m. ET) U.S. Conference Board Consumer Confidence Index for October. Consensus is 101.3, down from 104.1 in September.
KEY STOCKS TO WATCH
Dow component Merck rose 2.2 percent to $62.10 in premarket trading after the company reported a 19.6 percent rise in quarterly net profit.
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Apple, which is scheduled to report results after the close of markets, was up 0.46 per cent at $118.19.
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Whirlpool fell 4.3 percent at $163.10 after the home appliances maker's revenue took a hit from a strong dollar. Whirlpool reported a lower-than-expected quarterly profit s the strong U.S. dollar hit overseas revenue, and the company lowered its full-year earnings forecast, citing soft U.S. and British markets and the weak British pound. This was the second time this year that the world's largest maker of home appliances cut its earnings forecast. The company also reduced its planned capital expenditures for the year.
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Eli Lilly was down 2.8 percent at $75.40 after the drugmaker's third-quarter revenue came in below Wall Street estimates.
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Caterpillar reported quarterly earnings that beat analysts' expectations, but revenue fell short of estimates. The company posted third-quarter earnings of 85 cents a share on revenue of $9.16-billion. Analysts expected Caterpillar to report third-quarter earnings of 76 cents a share on revenue of $9.86-billion, according to Thomson Reuters consensus estimates. Its shares were down 1.9 per cent in premarket trading.
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3M Co. reported third-quarter earnings of $1.33 billion. The St Paul, Minnesota-based company said it had profit of $2.15 per share. The results exceeded Wall Street expectations. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of $2.14 per share. The maker of Post-it notes, industrial coatings and ceramics posted revenue of $7.71 billion in the period, matching Street forecasts. However, the stock fell 1.4 per cent in premarket trading after it cut its full-year outlook.
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JetBlue Airways Corp. reported a lower-than-expected quarterly profit as the company's average fare fell 6 percent. The U.S. budget carrier said net income rose to $199 million in the third quarter ended Sept. 30 from $198 million a year earlier. Earnings per share was flat at 58 cents. Analysts had expected an adjusted profit of 60 cents per share, according to Thomson Reuters I/B/E/S. Its shares were up 0.05 per cent in premarket trading.
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Chemical maker DuPont reported adjusted quarterly profit of 34 cents per share, beating estimates of 21 cents a share. Revenue also beat estimates. DuPont raised its full-year forecast to an adjusted $3.25 compared to a consensus estimate of $3.19. It also said its merger with Dow Chemical Co. was expected to be completed by the first quarter of 2017. Dow's shares were up 0.4 per cent in premarket trading.
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Consumer products giant Procter & Gamble earned an adjusted $1.03 per share for its fiscal first quarter, compared to consensus estimates of 98 cents a share. Revenue also exceeded analysts' forecasts. Its shares were up 2.7 per cent in premarket trading.
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Industrial conglomerate United Technologies earned an adjusted $1.76 per share, beating analyst estimates by 10 cents a share. It also beat on the top line and raised both the lower end of its full-year guidance, as well as its organic sales growth outlook. Its shares were up 2.7 per cent in premarket trading.
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Automaker General Motors reported adjusted profit of $1.72 per share, far above estimates of $1.45 a share. Revenue also beat estimates as crossovers and trucks continue to be popular with consumers. GM said it expects to close out the year at the high end of its prior earnings forecast. Its shares were up 0.4 per cent in premarket trading.
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Under Armour beat estimates by four cents a share, with quarterly profit of 29 cents per share. Strong apparel sales helped boost revenue above forecasts, but profit margins fell from a year ago. Its shares were down 15 per cent in premarket trading.
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Oilfield services company Baker Hughes reported a quarter loss of 15 cents per share, smaller than the 44 cents a share loss expected by analysts. Revenue was short of forecasts, however, and Baker Hughes said it is making progress reducing costs and increasing efficiency in its operations in the midst of a challenging environment. Its shares were up 6.5 per cent in premarket trading
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Diversified U.S. miner Freeport-McMoRan Inc. reported a weaker-than-expected quarterly profit and said it expects to sell less gold, copper and molybdenum this year. The company's net income attributable to shareholders was $217 million, or 16 cents per share, in the third quarter ended Sept. 30, compared with a loss of $3.83 billion, or $3.58 per share, a year earlier. Excluding items, the company earned 13 cents per share, below analysts' average estimate of 18 cents per share, according to Thomson Reuters I/B/E/S. Revenue rose 14.6 percent to $3.88 billion. Its shares were up 0.2 per cent in premarket trading
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Credit card issuer Visa reported adjusted quarterly profit of 78 cents per share, five cents a share above estimates. Revenue was slightly above forecasts. But its 2017 earnings and revenue guidance was somewhat shy of analyst forecasts. Its shares were down 1 per cent in premarket trading.
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Earnings include: 3M Co.; Akamai Technologies Inc.; Ameriprise Financial Inc.; Apple Inc.; AT&T Inc.; Baker Hughes Inc.; Ballard Power Systems Inc.; Baxter International Inc.; C R Bard Inc.; C.H. Robinson Worldwide Inc.; Canadian National Railway Co.; Capital One Financial Corp.; Capstone Mining Corp.; Carlisle Companies Inc.; Caterpillar Inc.; Centene Corp.; Chipotle Mexican Grill Inc.; Chubb Ltd.; Corning Inc.; DH Corp.; Discover Financial Services; Edwards Lifesciences Corp.; Eli Lilly and Co.; Equity Residential; Express Scripts Holding Co.; First National Financial Corp.; Freeport-McMoRan Inc.; General Motors Co.; JetBlue Airways Corp.; Juniper Networks Inc.; KeyCorp.; Lockheed Martin Corp.; Merck & Co Inc.; PFB Corp.; Polaris Industries Inc.; PrairieSky Royalty Ltd.; Procter & Gamble Co.; Sherritt International Corp.; Sherwin-Williams Co.; Sprint Corp.; Under Armour Inc.; Valero Energy Corp.; Western Energy Services Corp.; Whirlpool Corp.
With files from wire services, CNBC