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Inside the Market

Premarket: Commodities tumble, Tim Hortons up sharply Add to ...

Stock futures suggest a mildly positive start to trading when U.S. and Canadian markets open this morning, although weakness in metals and crude oil prices will make it challenging for the resource-heavy TSX to probe higher.

The direction and pace of today's trading is a bit unpredictable this morning, given an onslaught of earnings that will need to be absorbed and the release of several U.S. economic reports - not to mention the conclusion of the Federal Reserve's two-day policy meeting. Several stock markets around the world are also closed today for the May Day holiday, keeping trading volumes thin.

More Related to this Story

The Fed is widely expected to keep its monthly bond-buying program unchanged near $85-billion and maintain interest rates near record lows. Most economists believe the quantitative easing measures won't be curtailed until the fourth quarter of this year. Still, the Fed's latest comments on the economy will be scrutinized for clues on when it may pull back its extraordinary monetary stimulus measures.

Market players for now appear content to keep cautiously bidding up stocks, sending the S&P 500 to fresh record highs. But there are some major market events later this week that could shake up sentiment: the European Central Bank announces its monthly interest rate decision on Thursday - and many think it will cut rates in the face of a still-sluggish economy - and the all-important U.S. jobs report comes out Friday.

Copper and crude oil this morning are both down more than 1 per cent, partly in reaction to weaker-than-expected factory data out of China. An official reading of the country's manufacturing purchasing managers' index eased to 50.6 in April from 50.9 in March, in another signal that the pace of growth there is starting to moderate.

Now, here's a closer look at what's going on this morning and what's coming up.

MARKETS:

Equities:

U.S. futures: S&P Toronto 60 +0.1 per cent; S&P 500 +0.1 per cent; Dow +0.1 per cent; Nasdaq +0.1 per cent

Hong Kong's Hang Seng index Closed for holiday

Shanghai composite index Closed for holiday

Japan's Nikkei -0.45 per cent

London’s FTSE 100 +0.57 per cent

Germany’s DAX Closed for holiday

France's CAC 40 Closed for holiday

Italy's FTSE MIB Closed for holiday

Commodities:

WTI (Nymex Jun) -1.57 per cent at $92.04 (U.S.) a barrel

Gold (Comex Jun) -0.35 per cent at $1,466.00 (U.S.) an ounce

Silver (Comex July) -1.20 per cent at $23.90 an ounce.

Copper (Comex July) -1.73 per cent at $3.13 (U.S.) a pound

Currencies:

Canadian dollar up 0.0016, or 0.16 per cent, at $0.9946 (U.S.)

ECONOMIC INDICATORS TO WATCH:

(858 a.m. ET) U.S. releases the PMI manufacturing flash index for April. A reading of 52.0 is expected.

(10 a.m. ET) The U.S. Institute for Supply Management publishes its manufacturing index for April. Economists expect a reading of 51.

(10 a.m. ET) U.S. releases construction spending for March, expected to rise 0.6 per cent after seeing growth of 1.2 per cent the previous month.

(2 p.m. ET) The U.S. Federal Reserve Board makes its interest rate announcement. Economists expect the benchmark rate to be left unchanged at 0.25 per cent.

STOCKS TO WATCH:

Tim Hortons Inc. is under pressure from one of its top investors to boost profitability through moves like buying back shares with borrowed money or paring back in the United States, Reuters reports. Shares are up nearly 4 per cent in the premarket.

Loblaw Cos. Ltd. said it is planning its $7-billion REIT offering for July as it reported a 40-per-cent rise in first-quarter profit and hiked its quarterly dividend by 9.1 per cent.

Talisman Energy Inc. reported an adjusted loss from operations of 6 cents a share, down from a profit on the same basis of 16 cents a year earlier and below analyst forecasts for 3 cents a share.

Merck & Co. cut its full-year guidance in anticipation of lower sales and said it plans to buy back $15-billion in shares. Shares are down 4.2 per cent in the premarket.

Time Warner Inc. reported adjusted earnings of 82 cents per share, easily beating the consensus Wall Street forecast of 75 cents.

Other earnings today include: ARC Resources Ltd.; Bell Aliant Inc.; Cameco Corp.; Canfor Corp.; Cott Corp.; Devon Energy Corp.; Facebook Inc.; HudBay Minerals Inc.; JDS Uniphase Inc.; Jean Coutu Group (PJC) Inc.; MasterCard Inc.; Pengrowth Energy Corp.; Trimac Transportation Ltd.; Uni-Sélect Inc.; Viacom Inc.; and Visa Inc.

Major automakers to release latest sales throughout the day.

THIS MORNING'S TOP INVESTING READS ON THE WEB:

Despite Apple's appeal, buying its bonds may not make sense for most investors.

Why 'rotate in May' could be the real spring market play.

Why you shouldn't be disturbed by defensive stocks leading the latest market rally.

Tips for  being a deep value investor.

Should you sell in May? Here's the historical record.

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The premarket report is constantly updated to reflect the latest news developments and market moves. For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities

Follow on Twitter: @eyeonequities

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