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.
Trading across global markets is very mixed today indicating indecision and uncertainty among investors.
Despite another round of generally positive earnings overnight, led by strong results from Tesla Motors and Texas Instruments, U.S. indices are only marginally higher, while the FTSE and Dax are marginally lower.
Currency markets are also mixed on overnight news. The British pound has strengthened a bit with U.K. third quarter gross domestic product exceeding expectations. Official data showed the economy grew by 0.5 percent between July and September, less rapid than the strong growth of 0.7 percent seen in the second quarter but comfortably above a median forecast of 0.3 percent in a Reuters poll of economists.
Oil sensitive currencies like the Candian dollar and Norwegian krone have rebounded a bit with oil stabilizing overnight even though West Texas Intermediate remains under $50 (U.S.).
It looks like the Belgians have finally gotten their act together and are prepared to sign on to the CETA trade agreement between the EU and Canada. This may have some influence here but it's more important for the EU to show that it can actually get a deal done with anybody as U.S. talks drag on and as Brexit talks are looming next year. It's unclear at this time if Prime Minister Justin Trudeau will still be heading to Europe to sign off on the deal or not.
Action in defensive havens appears particularly perplexing. Gold has turned upward in recent days tracking an uptick in the polls for Republican presidential candidate Donald Trump suggesting some political risk concerns starting to build. However, we're not seeing broad movement into defensive currencies as the Japanese yen continues to retreat.
It's been a big week for mergers and that focus is firmly on the technology sector today. Qualcomm has agreed to purchase NXP Semiconductors for $47-billion in cash already. Twitter reported earnings this morning and did not announce a takeover bid as some had speculated with the company being shopped around lately.
Twitter did announce adjusted earnings per share (EPS) of 13 cents (U.S.), above the nine cents the Street had expected. The struggling social media platform also announced it is cutting its work force by 9 per cent. This announcement looks like Twitter may be primping itself in the hope of attracting a better bid perhaps later today, perhaps in the coming weeks. The longer Twitter goes without a bid, however, the more likely the company may continue on alone. Twitter shares have popped up 4 per cent in premarket trading.
There's a lot more news on the way today in U.S. markets with durable goods orders due before the open, plus earnings from Google and Amazon.com due after the close.
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 7:30 a.m. ET)
Dow +0.14 per cent; S&P 500 +0.23 per cent; Nasdaq: +0.24 per cent; TSX 60 +0.20 per cent
Equities
Japan's Nikkei -0.32 per cent
Shanghai composite index -0.13 per cent
Hong Kong's Hang Seng -0.83 per cent
Germany's DAX -0.05 per cent
London's FTSE -0.03 per cent
France's CAC 40 -0.24 per cent
Commodities
WTI crude oil (Nymex Dec.) +0.51 per cent at $49.43 (U.S.) a barrel
Gold (Comex Dec.) +0.26 per cent at $1,269.90 (U.S.) an ounce
Copper (Comex Dec.) +0.75 per cent at $2.16 (U.S.) a pound
Currencies
Canadian dollar +0.06 at 74.76 cents (U.S.)
U.S. dollar index -0.07 at 98.56
Bonds
Canada 10-year bond yield +3.94 at 1.19 per cent
KEY ECONOMIC RELEASES
China industrial profits
Euro Area money supply
(8:30 a.m. ET) Canada Survey of Employment, Payrolls and Hours for August.
(8:30 a.m. ET) U.S. initial jobless claims for week of Oct. 5. Estimate is 255,000, a decline of 5,000 from the previous week.
Fewer Americans sought unemployment aid last week, a sign that businesses are holding onto their workers and hiring is likely solid. The U.S. Labor Department says that weekly applications for unemployment benefits fell 3,000 to 258,000, not far from the 43-year low reached last month. Applications have been below 300,000 for 86 straight weeks, the longest such streak since 1970.
(8:30 a.m. ET) U.S. durable orders for September. The consensus projection is an increase of 0.1 per cent from August. Excluding transportation, the projection is an increase of 0.2 per cent.
Orders for big-ticket manufactured goods dipped slightly in September as a key category that tracks business investment fell by the largest amount in seven months. The Commerce Department says orders for durable goods edged down 0.1 per cent in September after gains of 0.3 per cent in August and 3.6 per cent in July. Orders in the category that serves as a proxy for business investment plunged 1.2 per cent in September, the biggest setback since a 2.1 per cent drop in February.
(8:30 a.m. ET) U.S. Philadelphia Fed Business Outlook Survey.
(10 a.m. ET) U.S. pending home sales for September. The consensus estimate is an increase of 1.2 per cent from August.
KEY STOCKS TO WATCH
National Bank of Canada says it's planning to cut 600 employees — about half through a targeted retirement program — as it adapts to a technological shift in the banking industry. At the same time, the Montreal-based bank expects to fill 500 other positions over the same period, primarily in sales and service and information technology jobs. National Bank says it will take a restructuring charge of about $128 million after taxes, or 38 cents per share, in the fourth quarter of its financial year ended Oct. 31.
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Shares of NXP Semiconductors rose 3.3 percent to $101.90 in premarket trading after Qualcomm said it would buy the chipmaker for $47 billion in enterprise value. Qualcomm rose 2.1 percent. Fellow chipmaker Micron Tech also rose.
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Potash Corp of Saskatchewan, the world's biggest fertilizer company by capacity, reported better-than-expected quarterly sales as prices bounced back from the lows of the year and on record volumes Net income fell to $81-million, or 10 cents per share, from $282-million, or 34 cents per share, a year earlier. Sales fell 25.7 per cent to $1.14-billion, but beat analysts' average estimate of $1.04-billion. Excluding items, the company earned 11 cents per share, above the 9 cents expected on average by analysts, according to Thomson Reuters I/B/E/S. Its shares were up 1.6 per cent in premarket trading.
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Ford Motor Co. beat estimates by six cents a share, with quarterly profit of 26 cents per share. Profit was down 56 percent from a year earlier. Its shares were down 0.5 per cent in premarket trading.
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Cenovus Energy Inc. cut its 2016 exploration and production budget again, as the Canadian oil producer looks to tackle a steep fall in oil prices that has eroded cash flows. The company reported a net loss of $251 million, or 30 cents per share, for the third quarter ended Sept. 30, compared with a profit of $1.80 billion, or $2.16 per share, a year earlier. The year-ago period included a $1.9 billion after-tax gain. Operating loss, which excludes most one-time items, was 28 cents per share in the latest quarter, much steeper than analysts' average estimate of 9 cents per share, according to Thomson Reuters I/B/E/S.
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Husky Energy Inc., Canada's No. 3 integrated oil company, reported a bigger-than-expected quarterly loss as weak crude oil prices continued to eat into profits. Chief Executive Asim Ghosh Ghosh will retire on Dec. 5 and will be replaced by Chief Operating Officer Rob Peabody.
The company said cash flow from operations shrank to $484 million in the quarter, from $674 million a year ago. However, Husky recorded nearly $1.5 billion in gains related to asset sales, helping it post a quarterly profit of $1.39 billion, compared with a year-ago loss of $4.09 billion. Excluding items, the company lost 10 Canadian cents per share, bigger than analysts' average estimate of 8 Canadian cents per share, according to Thomson Reuters I/B/E/S.
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Teck Resources Ltd. reported better-then-expected quarterly revenue on Thursday due to higher prices for steelmaking coal, and raised its production forecast for the year. Its revenue rose 9.7 percent to $2.31 billion in the third quarter, above analysts' average estimate of $2.22 billion, according to Thomson Reuters I/B/E/S. Net profit attributable to Teck shareholders was $234 million, or 40 Canadian cents per share, for the quarter, compared with a loss of $2.15 billion, or $3.73 per share, a year earlier when Teck took an impairment charge of $2.2 billion related to the writedown of its assets. Excluding items, Teck earned 26 cents per share in the latest reported quarter, missing analysts' estimate of 28 cents. Its shares were down 0.1 per cent in premarket trading.
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Suncor Energy Inc. reported a better-than-expected third-quarter profit thanks to strong upstream production, lower operating costs and record crude throughput at its refineries. It reported net earnings of $392 million, or 24 cents per share. Suncor's third-quarter operating profit, which excludes one-time items, was $346 million, or 21 cents per share, versus $410 million, or 28 cents per share, in the year-ago period. Analysts had predicted earnings of 9 cents per share, according to Thomson Reuters I/B/E/S. Its shares were up 2.6 per cent in premarket trading.
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Drugmaker Bristol-Myers Squibb earned an adjusted 77 cents per share for its latest quarter, 12 cents a share above estimates. Revenue also beat forecasts. It also raised its full-year forecast and announced a $3 billion share buyback program. Its shares were up 4 per cent in premarket trading.
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Private-equity firm Blackstone beat estimates by nine cents a share, with adjusted earned net income of 57 cents per share. Revenue also beat Street forecasts. Its shares were up 1.9 per cent in premarket trading.
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Health insurer Aetna reported adjusted quarterly profit of $2.07 per share, beating estimates by four cents a share. Revenue was also above estimates.
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Google parent Alphabet and online retailer Amazon.com were up about 0.5 percent ahead of quarterly results scheduled after market close.
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Tesla jumped 5.24 percent to $212.83 after the electric carmaker reported its first quarterly net profit in more than three years.
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Bristol-Myers rose nearly 4 percent after the drugmaker reported third-quarter revenue that beat estimates and increased its full-year profit forecast.
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United Parcel Service Inc. reported third-quarter net income of $1.27 billion. On a per-share basis, the Atlanta-based company said it had profit of $1.44. The results exceeded Wall Street expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was for earnings of $1.43 per share. The package and delivery service posted revenue of $14.93 billion in the period, also exceeding Street forecasts. Six analysts surveyed by Zacks expected $14.7 billion. UPS expects full-year earnings in the range of $5.70 to $5.90 per share. Its shares were up 0.24 per cent in premarket trading.
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ConocoPhillips reported a smaller-than-expected quarterly loss, helped by lower expenses, and cut its capital budget forecast for the year. ConocoPhillips' net loss fell to $1.0 billion, or 84 cents per share, in the quarter from $1.1 billion, or 87 cents per share, a year earlier. Excluding items, the company lost 66 cents per share, while analysts on average had expected loss of 70 cents, according to Thomson Reuters I/B/E/S. Its shares were up 0.2 per cent in premarket trading.
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Altria Group reported third-quarter earnings of $1.09 billion. The Richmond, Virginia-based company said it had profit of 56 cents per share. Earnings, adjusted for one-time gains and costs, came to 82 cents per share. The results exceeded Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of 81 cents per share.
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Groupon lost one cent per share for its latest quarter, matching estimates, while the daily deals site saw revenue come in above Street forecasts. It also announced the acquisition of rival LivingSocial for an undisclosed amount. Its shares were down 9 per cent in premarket trading.
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Restaurant chain Buffalo Wild Wings earnings came in a penny a share above estimates, with quarterly profit of $1.23 per share. But its revenue fell shy of analysts' projections and it issued weaker-than-expected full-year guidance. Its shares were up 4.7 per cent in premarket trading.
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Texas Instruments reported quarterly earnings of 94 cents per share, eight cents a share above estimates. The chipmaker's revenue also came in above forecasts.The company also announced a 32 percent increase in its quarterly dividend to 50 cents per share. Its shares were up 0.1 per cent in premarket trading.
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Western Digital earned an adjusted $1.18 per share for its latest quarter, 14 cents a share above estimates. The disk drive maker's revenue was also above estimates. Its shares were up 4.4 per cent in premarket trading.
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Earnings include: Aetna Inc.; Aflac Inc.; Alcatel Lucent SA; Allegion PLC; Alphabet Inc.; Amazon.com Inc.; Amgen Inc.; Arthur J Gallagher & Co.; Baidu Inc.; Blackstone Group LP; BorgWarner Inc.; Bristol-Myers Squibb Co.; CA Inc.; alfrac Well Services Ltd; Celgene Corp.; Cenovus Energy Inc.; Colgate-Palmolive Co.; ConocoPhillips; Deutsche Bank AG; Domtar Corp.; Dow Chemical Co.; Eastman Chemical Co.; Eldorado Gold Corp.; Expedia Inc.; Fairfax Financial Holdings Ltd.; First Quantum Minerals Ltd.; First Solar Inc.; FirstEnergy Corp.; Ford Motor Co.; Genworth Financial Inc.; Genworth MI Canada Inc.; Goodyear Tire & Rubber Co.; HCA Holdings Inc.; Husky Energy Inc.; International Paper Co.; Intertain Group Ltd.; Invesco Ltd.; Kia Motors Corp.; Kimco Realty Corp.; LinkedIn Corp.; Macerich Co.; Marathon Petroleum Corp.; MEG Energy Corp.; National Oilwell Varco Inc.; Nevsun Resources Ltd.; New Gold Inc.; Nokia Corp.; OceanaGold Corp.; Potash Corporation of Saskatchewan Inc.; QLT Inc.; Raytheon Co.; SolarCity Corp.; Stanley Black & Decker Inc.; Stryker Corp.; Twitter Inc.; Vale SA; Volkswagen AG; Xcel Energy Inc.; Yamana Gold Inc.
Also see: Thursday's small-cap stocks to watch
With files from wire services, CNBC