The Before the Bell report is constantly updated to reflect the latest news developments and market moves in the premarket. Check back later for updates.
Markets are largely in standby mode this morning as the Federal Reserve prepares to announce its decision this afternoon on whether to begin the tapering of its bond purchases.
On the whole, Wall Street is expecting the Fed to curtail its $85-billion (U.S.) in monthly purchases by about $10-billion to $15-billion - largely a token measure but significant in that it would mark the beginning of what undoubtedly will be long period of curtailing stimulus measures after the Great Recession.
The common thinking is that a "tapering" of bond purchase more than that amount could set markets up for a tumble, and less than that range could spur a rally. But markets are rarely predictable, and market reaction could very well be swayed by what the Fed says in its policy statement at 2 p.m. (ET) when it announces its decision, and what Chairman Ben Bernanke says in a press conference at 2:30 p.m. (ET). Beyond the tapering, the Fed's outlook on the economy and when it may start hiking interest rates - and any comments on whether it may tweak its 6.5 per cent unemployment threshold for considering the first bump up in rates - will be key.
It's also worth noting that many on the Street are predicting the Fed will taper bond purchases by a greater, or lesser, degree than the $10-billion to $15-billion consensus range - in part a reflection of the unevenness of recent economic data. The most recent survey by Bloomberg News, for instance, found that 33 of 64 economists predict it will reduce its buying of Treasuries by $5-billion or less, with 31 forecasting a cut of $10-billion or more.
Now, here's a closer look at what's going on this morning and what's to come.
MARKETS:
Equities:
Futures: S&P 500 +0.1 per cent; Dow +0.1 per cent; Nasdaq +0.2 per cent
Hong Kong's Hang Seng -0.27 per cent
Shanghai composite index +0.29 per cent
Japan's Nikkei +1.35 per cent
London's FTSE 100 +0.16 per cent
Germany's DAX +0.43 per cent
France's CAC 40 +0.45 per cent
Commodities:
WTI crude oil (Nymex Nov) +0.58 per cent at $105.43 (U.S.) a barrel
Gold (Comex Dec) -0.67 per cent at $1,300.60 (U.S.) an ounce
Copper (Comex Dec) +0.33 per cent at $3.23 (U.S.) a pound
Currencies:
Canadian dollar at 97.06 (U.S.), down 0.0007 from yesterday's North American close.
U.S. dollar index down 0.04 at 81.09
Bonds:
U.S. 10-year Treasury yield 2.85 per cent, unchanged
ECONOMIC INDICATORS TO WATCH:
U.S. housing starts for August rose 0.9 per cent to 891,000 on an annualized basis. Economists had expected a 2.3 per cent boost.
STOCKS TO WATCH:
BlackBerry Ltd. announced it is launching a new flagship smartphone to be called the Z30, featuring a five-inch touchscreen and myriad new features. Shares are up 1.4 per cent in the U.S. premarket.
FedEx reported first-quarter earnings per share of $1.53, up from $1.45 a year ago and beating the Street view of $1.50. Shares are up 2.2 per cent premarket.
General Mills Inc. reported quarterly earnings of 70 cents a share, matching Street forecasts.
Adobe Systems Inc. late Tuesday reporter lower quarterly revenue but reported that paid Creative Cloud subscribers rose to more than 1 million. Shares are up 6 per cent in the premarket.
Other earnings today include Oracle Corp.
China's CNOOC Ltd. will begin trading on TSX today.
Electronic Arts Inc. announced Andrew Wilson has been appointed its new chief executive.
Labrador Iron Mines Holdings Ltd. and a subsidiary of India's Tata industrial group have formed a joint venture that will speed up development of an ore deposit and new mine in the Schefferville region of the Labrador Trough.
ANALYST ACTIONS:
R.W. Baird downgraded Caterpillar Inc. to "neutral" from "outperform" with a target of $90 (U.S.).
BMO Nesbitt Burns upgraded Oil States International to market perform and raised its target to $110 from $94.
RBC Dominion Securities downgraded Exelon to "sector perform" from "outperform" and cut its price target to $33 from $34.
Barclays upgraded Colgate-Palmolive Co. to "overweight" from "equalweight."
Barclays downgraded Procter & Gamble to "equalweight" from "overweight."
THIS MORNING'S TOP INVESTING READS ON THE WEB:
Investor sentiment is now dangerously exuberant.
The dreaded black candles are appearing in the charts for U.S. stocks.
Don't believe the market lore that a bull appearing on the cover of Time magazine means trouble.
Why it might not be crazy to buy bonds right now.
Forward earnings are still heading higher.
How freewheeling Twitter became a money-spinning juggernaut.
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For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities.
Darcy Keith