NEW YORK, NY - DECEMBER 13: Pedestrians walk past the New York Stock Exchange (NYSE) bathed in Christmas color and light, December 13, 2016 in New York City. The Dow Jones Industrial Average continues to approach the 20,000 mark. (Photo by Drew Angerer/Getty Images)Drew Angerer/Getty Images
The Before the Bell report is compiled by editors of The Globe and Mail and is updated throughout the morning to reflect latest developments.
U.S. and Canadian stock index futures were little changed in thin trading on Friday ahead of the Christmas holiday.
Canada's gross domestic product growth likely stalled in October, data is expected to show. The report is due at 8:30 a.m. ET.
Canada's benchmark stock index climbed for the sixth straight session on Thursday, led by energy and telecom shares, after the nation's telecom regulator ruled that broadband internet access will be considered a basic service.
Volumes have been muted this week, which is also the last full week of trading this year. U.S. and Canadian markets are shut for the Christmas holiday on Monday. Canadian markets are also closed on Tuesday but American markets are open. While stocks will trade for the full day on Friday, the U.S. bond market will close at 2 p.m. ET.
U.S. stocks fell on Thursday, weighed down by weakness in retailers as investors stepped back from a recent rally fueled by optimism that President-elect Donald Trump's policies will boost the economy.
The decline pulled the Dow Jones Industrial Average further away from the 20,000 mark after it nearly breached that historic level this week for the first time.
"Although Wall Street succumbed to the bears on Thursday, the heightened expectations of a Santa rally elevating the Dow Jones to the golden 20,000 mark could re-attract risk-hungry investors," said Lukman Otunuga, research analyst at FXTM in Croydon, London.
"With Christmas this weekend and New Year's just over a week away, global stocks may meander between losses and gains as investors strategize for 2017."
Following a sharp rally since the Nov. 8 U.S. election, the Dow is up about 14 percent for the year and the S&P 500 is 11 percent higher on bets that the economy will benefit from Trump's plans for deregulation and infrastructure spending.
Economic data scheduled for release includes new home sales for November, which likely advanced 2.1 per cent to 575,000 units after declining 1.9 per cent in October. The data is expected at 10 a.m. ET. A final reading on consumer sentiment in December is expected to remain unchanged at 98.0.
Oil slipped below $55 a barrel as a stronger dollar weighed on commodities and as higher Libyan output threatened to counter some of the supply cuts planned by OPEC and other producers.
European stocks edged higher on Friday, helped by banks after two regional bellwethers settled investigations into U.S. mortgage securities, while oil and the dollar were on the back foot in light trading ahead of the Christmas break.
In another boost to European financials, a bailout for Italy's oldest bank Monte dei Paschi was approved as the country's government looks to end a protracted banking crisis that has gummed up the economy.
European shares were up 0.1 percent with euro zone banks up 0.6 percent and comfortably outperforming broader markets. An index of Italian lenders rose by 1.6 percent.
While Monte dei Paschi shares were suspended from trading, Italian government bond yields fell with 10-year yields slipping 4 basis points to 1.81 percent.
"Banks run the show today," analysts at Kepler Chevreux said in a note to clients, adding that the newsflow around Italian lenders was turning positive.
Deutsche Bank's $7.2-billion settlement with the U.S. Department of Justice (DOJ) over toxic mortgage securities sold in the run-up to the 2008 financial crisis was nearly half of the fine initially levied in September. Deutsche Banks shares rose 2.7 percent and are up 86 percent since September lows.
Credit Suisse fell 0.6 percent, giving up earlier gains, after it agreed to pay $5.3 billion to the DOJ to settle similar charges. Barclays became the latest in a long-list of other lenders under investigation to be sued.
In the U.S., Fred's shares were up 4.7 per cent at $20.30 in premarket trading after Alden Global Capital reported a stake of 24.8 per cent in the discount store operator.
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 -0.09 per cent; S&P 500 -0.08 per cent; Nasdaq: -0.10 per cent; TSX 60 -0.04 per cent
Equities
Japan's Nikkei -0.09 per cent
Shanghai composite index -0.94 per cent
Hong Kong's Hang Seng -0.28 per cent
Germany's DAX -0.19 per cent
London's FTSE +0.06 per cent
France's CAC 40 +0.03 per cent
Commodities
WTI crude oil (Nymex Feb..) -1.27 per cent at $52.28 (U.S.) a barrel
Gold (Comex Feb.) +0.14 per cent at $1,132.30 (U.S.) an ounce
Copper (Comex March) +0.04 per cent at $2.50 (U.S.) a pound
Currencies
Canadian dollar -0.33 at 73.77 cents (U.S.)
U.S. dollar index +0.01 at 103.10
Bonds
Canada 10-year bond yield +0.19 at 1.79 per cent
KEY ECONOMIC RELEASES
Japan markets closed
Germany Gfk consumer confidence
U.K. real GDP
(8:30 a.m. ET) Canada real GDP at basic prices for October. Consensus is an increase of 0.1 per cent from September.
Canada's economy unexpectedly contracted at the start of the fourth quarter due to widespread weakness in the manufacturing sector and a decline in oil and gas extraction, data from Statistics Canada showed on Friday. The gross domestic product was down 0.3 per cent in October, falling below economists' expectations for no growth. September was revised slightly higher to growth of 0.4 per cent from an originally reported 0.3 per cent. The decline in October came after four consecutive months of growth and was likely to reinforce expectations that the economy slowed at the end of the year following a strong rebound in the third quarter.
(10 a.m. ET) U.S. new home sales for November. Consensus is an annualized rate increase of 2.1 per cent.
(10 a.m. ET) U.S. University of Michigan Consumer Sentiment for December (final). Consensus is 98.1, up from 93.8 in November.
(1 p.m. ET) Baker-Hughes rig count.
Also: Canada budget balance for October.
KEY STOCKS TO WATCH
Also see: Friday's small-cap stocks to watch
Fairfax Financial Holdings Ltd. is plotting more growth in Africa with plans to launch a new public company that would invest in the continent's businesses, according to people familiar with the plans. The Toronto-based insurance and investment firm is set to file on Friday a prospectus for an initial public offering for Fairfax Africa Holdings Corp. amid a dearth of new offerings this year. The company is seeking to raise as much as $1-billion. Fairfax has already secured about $500-million from cornerstone investors and its own funds, the sources said.
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Analyst actions:
Oceanagold Corp.: Raymond James raises rating to "strong buy" from "outperform."
Sun Life Financial Inc.: Dundee cuts rating to "neutral" from "buy."
Royal Bank of Canada : Dundee raises target price to $93 from $87.
With files from wire services