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.
Today is looking like an in-between day for trading with the impact of recent developments fading and traders awaiting the next round of potentially market moving news.
U.S. index futures and the FTSE are flat to up 0.2 per cent, consolidating yesterday's moves that included a new all-time high for the Dow and a catch up rally for the Nasdaq. Speaking of catching up, Italy's FTSEMIB and Spain's IBEX are both up 1.4 per cent while the Dax is up 0.3 per cent building on yesterday's rally.
Crude oil is down 0.5 per cent in a normal trading correction of recent gains as the post-OPEC party winds down. Today finds WTI near $51.50 and Brent just under $55.00 as traders await Saturday's meeting between OPEC and Non-OPEC producers to nail down cuts from Russia, Mexico and others.
Currencies have been steady overnight. Gold and the yen continue to stabilize while the pound and Canadian dollar are up slightly. The Australian dollar slipped a bit following the Reserve Bank of Australia meeting where it's central bank held interest rates steady and had a mixed to slightly improved assessment of the local economy.
There is some data on factory orders today but no more Fed speakers as the pre-meeting blackout period has now started. Because of this focus may turn elsewhere for the next few days with the Bank of Canada meeting Wednesday and the European Central Bank meeting on Thursday.
Canadian bank stocks could attract significant attention as bank earnings season wraps up on a positive note. Bank of Montreal reported EPS of $2.10 way above the $1.85 street estimate and announced a 2.3-per-cent dividend increase, a positive sign for the Canadian economy.
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 9 a.m. ET)
Dow +0.07 per cent; S&P 500 +0.16 per cent; Nasdaq: +0.19 per cent; TSX 60 +0.11 per cent
Equities
Japan's Nikkei +0.47 per cent
Shanghai composite index -0.17 per cent
Hong Kong's Hang Seng +0.75 per cent
Germany's DAX +0.31 per cent
London's FTSE +0.12 per cent
France's CAC 40 +0.64 per cent
Commodities
WTI crude oil (Nymex Jan.) -1.54 per cent at $50.99 (U.S.) a barrel
Gold (Comex Feb.) -0.16 per cent at $1,174.60 (U.S.) an ounce
Copper (Comex March) -1.26 per cent at $2.66 (U.S.) a pound
Currencies
Canadian dollar +0.07 at 75.38 cents (U.S.)
U.S. dollar index +0.13 at 100.22
Bonds
Canada 10-year bond yield -0.4335 at 1.62 per cent
KEY ECONOMIC RELEASES
China foreign reserves
Euro area November retail PMI, 3Q GDP
Also: Reserve Bank of Australia holds its monetary policy meeting.
(8:30 a.m. ET) Canada October merchandise trade deficit. Consensus $2.1-billion.
Canada posted a smaller-than-expected trade deficit of $1.13-billion in October, down from a record $4.38-billion shortfall in September, when imports were boosted by a one-off shipment of oil machinery, Statistics Canada data showed on Tuesday.
(8:30 a.m. ET) U.S. Q3 productivity. Consensus +3.2 per cent at an annual rate.
(8:30 a.m. ET) U.S. October goods and services trade deficit. Consensus is $41.6-billion.
The U.S. trade deficit increased in October as exports fell amid declining shipments of soybeans and other goods, suggesting that trade would be a drag on growth in the fourth quarter. The Commerce Department said on Tuesday that the trade gap widened 17.8 percent to $42.6 billion. September's trade deficit was revised slightly down to $36.2 billion. Economists polled by Reuters had forecast the trade gap increasing to $41.8 billion in October after a previously reported $36.4 billion shortfall. When adjusted for inflation, the deficit rose to $60.3 billion from $54.2 billion in September.
(10:00 a.m. ET) Canada Ivey Purchasing Managers Index for November
(10:00 a.m. ET) U.S. October factory orders. Consensus +2.5 per cent.
(10:00 a.m. ET) U.S. business rountable CEO economic outlook survey, IBD/TIPP economic optimism index.
KEY STOCKS TO WATCH
Also see: Tuesday's small-cap stocks to watch
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Bank of Nova Scotia is selling its HollisWealth network of financial advisers to a growing Canadian insurer, parting ways with a business it acquired five years ago. Industrial Alliance Insurance and Financial Services Inc. is buying HollisWealth, adding $34-billion in assets under administration for an undisclosed price. To help fund the purchase, Industrial Alliance announced a $139-million equity financing.
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Verizon Communications Inc. agreed to sell its data-centers business to Equinix Inc. for $3.6 billion in cash as the company turns its focus to mobile video advertising. The deal includes 24 facilities across 15 metropolitan markets, according to a statement Tuesday. Equinix, based in Redwood City, California, operates as a real estate investment trust, investing in interconnected data centers. Verizon's shares were up 0.5 per cent in premarket trading, while Equinix stock was up 0.6 per cent.
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Shares of Starwood Property fell 4.6 percent to $21.85 in premarket trading after the REIT priced a second stock offering at a discount to its previous close.
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Pandora rose 4.6 percent to $13.99 after brokerage Aegis Capital initiated coverage on the online radio company's stock with a "buy" rating and a $16 price target.
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DryShips surged 12.8 percent to $5.19 after Morgan Stanley reported a passive 6.1 percent stake.
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AstraZeneca reported upbeat results for its Tagrisso lung cancer drug in a trial, saying it improved progression-free survival by nearly six months. Its shares were up 0.9 per cent in premarket trading.
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AutoZone earned $9.36 per share for its latest quarter, five cents above estimates. Its shares were up 1.2 per cent in premarket trading.
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Ford is raising $2.8 billion in new long-term financing, the first time it has gone to the debt market in nearly four years.
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Apple CEO Tim Cook told Reuters that Apple Watch sales to consumers set a record during the first week of holiday sales. Its shares were up 1 per cent in premarket trading.
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Toll Brothers reported adjusted quarterly profit of $1.15 per share, 16 cents above estimates. Its shares were up 2.4 per cent in premarket trading.
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Sanofi is considering a bid for Swiss biotech firm Actelion, according to Bloomberg. Johnson & Johnson has been trying to buy Actelion and had reportedly raised its latest bid to more than $250 per share. Sanofi's shares were down 1.4 per cent in premarket trading. J&J's shares were up 0.2 per cent.
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Wells Fargo initiated coverage on footwear maker Skechers with an "outperform" rating, saying the stock has a compelling valuation after its stock has fallen 50 per cent. Its shares were up 0.6 per cent in premarket trading.
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Cowen downgraded Nike to "market perform" from "outperform," saying its market share losses could accelerate. Its shares were down 1 per cent in premarket trading.
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GoDaddy is buying Internet services company Host Europe for $641 million, plus $1.15 billion in assumed debt.
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Roper Technologies, a designer of engineered products and software, is buying privately held enterprise software maker Deltek for $2.8-billion.
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Earnings include: Autozone Inc.; Bank of Montreal; Laurentian Bank of Canada; Michaels Companies Inc.; Toll Brothers Inc.
With files from wire services