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.
Market discussion has quickly moved from whether we are heading into a bubble to whether we are heading into a correction. U.S. stocks have slumped for three straight days and European stocks are on track for a fourth down-day, not long after major indexes were celebrating multi-year highs amid ongoing central bank stimulus.
Futures for the S&P 500 and Dow Jones industrial average are modestly lower this morning. The Dow fell 0.6 per cent on Tuesday. European stocks were down about 0.2 per cent and Japan's Nikkei 225 fell 2.2 per cent in overnight trading - its biggest fall in six weeks as the yen bounced off its lows.
Blame the weak stretch on renewed taper concerns. With economic news looking decent, economists are wondering if the Federal Reserve could start to taper its monthly bond purchases, stoking uncertainty in the stock market.
We're finding out more about U.S. economic conditions this morning. The ADP private sector jobs report for November came in stronger than expected, offering a hint that the U.S. non-farm payrolls report on Friday will hold some good news on the employment front.
As well, the ISM non-manufacturing index will be released later today. There are also new home sales to digest. And in the afternoon, the Fed will release its Beige Book of economic conditions, providing some insight into how various economic districts are seeing things right now.
In Canada, the Bank of Canada will release its latest rate decision, no doubt with some commentary on where rates are likely headed. (Some economists believe monetary easing is in the works, now that the Canadian dollar is down to three-year lows next to the U.S. dollar.)
Now, here's a closer look at what's going on this morning and what is to come.
MARKETS:
Equities:
Futures: S&P 500 -0.18 per cent; Dow -0.14 per cent; Nasdaq -0.14 per cent; S&P Toronto -0.25 per cent
Hong Kong's Hang Seng -0.76 per cent
Shanghai composite index +1.32 per cent
Japan's Nikkei -2.17 per cent
London's FTSE 100 -0.16 per cent
Germany's DAX -0.02 per cent
France's CAC 40 -0.06 per cent
Commodities:
WTI crude oil (Nymex Jan) +1.20 per cent at $97.19 (U.S.) a barrel
Gold (Comex Dec) -0.66 per cent at $1,212.60 (U.S.) an ounce
Copper (Comex Dec) +0.22 per cent at $3.17 (U.S.) a pound
Currencies:
Canadian dollar at 93.82 (U.S.), vs. 93.91 at Tuesday's North American close.
U.S. dollar index up 0.07 at 80.66
Bonds:
U.S. 10-year Treasury yield 2.80 per cent, up 0.01
ECONOMIC INDICATORS:
The U.S. ADP private sector jobs report showed a 215,000 employment gain in November, stronger than the 170,000 Street forecast. This also represented a big jump from 130,000 in October.
The U.S. reported a trade deficit in October of $40.6-billion, a bit larger than the $40.2-billion that the Street forecast but narrower than September's $41.8-billion deficit.
Canada posted a trade surplus in October of $75-million (Canadian), whereas the Street was expecting a deficit of $770-million.
(10 a.m. ET) Bank of Canada announces interest rate decision.
(10 a.m. ET) U.S. releases new home sales for both September and October.
(10 a.m. ET) U.S. releases non-manufacturing ISM index for November.
(2 p.m. ET) U.S. Fed releases Beige Book, its reading of economic conditions.
STOCKS TO WATCH:
National Bank reported fourth-quarter adjusted EPS of $2.09, matching the Street consensus. It also hiked its dividen 6 per cent to 92 cents a share and announced a two-for-one stock split.
Other earnings today include: Descartes Group; Canadian Western Bank; Aeropostale Inc.; Guess? Inc.
ANALYST ACTIONS:
BMO Nesbitt Burns hiked its price target on Air Canada to $10 (Canadian) a share from $7.50 and maintained an "outperform" rating.
CIBC World Markets cut its price target on Bank of Montreal to $77 (Canadian) from $78 and maintained a "sector underperform" rating.
Goldman Sachs downgraded Citibank to "neutral" from "conviction buy" but raised its price target to $60 (U.S.) from $58.
Goldman Sachs upgraded U.S. Bancorp to "conviction buy" from "neutral" and raised its price target to $44 (U.S.) from $40.
JPMorgan downgraded AT&T to "neutral" from "overweight" with an unchanged price target of $38 (U.S.).
RBC Dominion Securities initiated coverage on Potash Corp. with a "sector perform" rating and $35 (U.S.) price target.
RBC Dominion Securities initiated coverage on Mosaic with an "outperform" rating and $57 (U.S.) price target.
THIS MORNING'S TOP INVESTING LINKS:
Newsletters are the most bullish since the 1987 market crash.
The least expensive way to convert Canadian and U.S. dollars at a discount brokerage.
U.S. dividends continue to grow.
Top 10 buys and sells from Morningstar's ultimate stock-pickers.
Securities executives are trying to determine if the 12-year-old decision to narrow the price increments for American stock trading has harmed investors.
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For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities.
David Berman