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.
Janet Yellen's seemingly off-the-cuff remark Wednesday that rate hikes could happen about six months after the Federal Reserve ends its bond purchases is still having major ramifications for markets this morning, with U.S. futures down about 0.3 per cent ahead of the opening bell and commodities suffering amid the bounce in the U.S. dollar.
The Fed chair's comments at a press conference Wednesday, which followed an announcement of a further $10-billion cut to the central bank's monthly bond purchases, would indicate a rate increase as early as spring 2015, sooner than many expected. U.S. Treasuries immediately fell on the news, with the greatest impact felt on the short end of the bond market - the most sensitive to movements in the Fed funds rate. The futures market for the U.S. Fed funds rate is now pricing in a 50 per cent chance of the first hike in May to June of 2015, a bit sooner than the earlier July to August timeframe.
Still, such predictions have to be taken with a big grain of salt. Ms. Yellen's comments were far from definitive sounding and much will still depend on economic data and other market-impacting events over the coming year.
Asian markets reacted to the news in the U.S. by selling off overnight, although one bright spot was property stocks in China, which rose on reports that two firms received approvals to issue private placements of shares. Some speculate that could pave the way for more companies to raise funds amid growing worries about debt defaults.
The Canadian dollar weakened a bit further this morning to hit a fresh 4 1/2-year low of 88.66 cents (U.S.) after sliding nearly a cent on Wednesday. It's hovering just about that level currently.
Now, here's a closer look at what's going on this morning and what is still to come.
MARKETS:
Equities:
Futures: S&P 500 -0.28 per cent; Dow -0.30 per cent; Nasdaq -0.29 per cent; S&P Toronto -0.22 per cent
Hong Kong's Hang Seng -1.79 per cent
Shanghai composite index -1.42 per cent
Japan's Nikkei -1.65 per cent
London's FTSE 100 -1.20 per cent
Germany's DAX -1.21 per cent
France's CAC 40 -1.02 per cent
Commodities:
WTI crude oil (Nymex May) -0.42 per cent at $98.75 (U.S.) a barrel
Gold (Comex Apr) -1.13 per cent at $1,326.10 (U.S.) an ounce
Copper (Comex May) -1.86 per cent at $2.93 (U.S.) a pound
Currencies:
Canadian dollar at 88.73 (U.S.), down 0.0025
U.S. dollar index up 0.26 at 80.26
Bonds:
U.S. 10-year Treasury yield 2.78 per cent, up 0.005
ECONOMIC INDICATORS:
U.S. initial jobless claims last week were 320,000, very close to expectations of 322,000.
(10 a.m. ET) U.S. releases the Philadelphia Fed Survey. The index is expected to come in at 4.0.
(10 a.m.. ET) U.S. releases existing home sales. They are forecast to come in unchanged, at an annual rate of 4.62 million.
STOCKS TO WATCH:
U.S. homebuilder Lennar reported quarterly EPS of 35 cents on revenues of $1.36-billion, ahead of the Street estimate of 28 cents EPS and $1.28-billion in revenue. Shares are up 2 per cent in the premarket.
ConAgra Foods reported Q3 adjusted EPS of 62 cents vs. the Street consensus of 60 cents. Shares are up 1.4 per cent in the premarket.
Other earnings today include: Silver Wheaton;Lennar; Nike; PetroChina; Winnebago Industries.
ANALYST ACTIONS:
TD Securities upgraded Talisman Energy to "buy" from "hold" and maintained a $14 price target, saying there is "significant upside that is not being recognized by the market."
Canaccord Genuity added BlackPearl Resources to its Canadian Focus List, its highest stock recommendation, as it reiterated a "buy" rating and $4 (Canadian) price target.
Canaccord Genuity removed Finning International from its Canadian Focus List due to price appreciation and raised its price target to $33.50 (Canadian) from $31 while reiterating a "buy" rating.
Goldman Sachs upgraded NRG Energy to "conviction buy" from "neutral" and raised its price target to $35 (U.S.) from $30.
Goldman Sachs downgraded Xcel Energy to "sell" from "neutral" with a price target of $28 (U.S.).
Goldman Sachs upgraded El Paso Electric to "neutral" from "sell" with a price target of $33 (U.S.).
THIS MORNING'S TOP INVESTING LINKS:
A new ETF is aiming to offer a better way to invest in commodities.
Joel Greenblatt on the market's current valuation.
Luck vs. skill: What Bill Gross and Bill Miller have in common.
Why bonds still deserve a place in your portfolio.
Starbucks not so dominant: Infographic on where Canadians and Americans get caffeinated.
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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