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.
North American stock futures are close to unchanged ahead of the opening bell, after fluctuating in and out of the red this morning, as sentiment remains shaky after the steep selloff over the past couple of sessions.
All three major U.S. indexes fell more than 1 per cent on Monday, with the S&P/TSX composite losing 0.8 per cent, as Friday's tech-led selloff spread to other sectors.
Traders are debating whether this marks the start of a more serious correction, one that many suggest is well overdue given the almost uninterrupted rally of the past several months. Much of the selloff has been tied to so-called momentum stocks retracing strong gains that may have left them in bubble territory. As such, the downward pressure on equity markets could be short-lived and mostly confined to high fliers.
But the first-quarter earnings season unofficially gets underway today, and it's being approached with some nervousness over what it may say about whether stock prices are justified given corporate profit growth. More than 90 stocks in the S&P 500 have warned that profits will fall short of forecasts, and analysts are projecting S&P 500 companies overall to report earnings only 1.1 per cent higher than a year ago. That's down sharply from the start of the year, when profit growth was estimated at 6.5 per cent. Alcoa will be releasing results after today's market close, with the Street looking for earnings of 5 cents a share on revenue of $5.57-billion (U.S.).
Meanwhile, the Canadian dollar is up sharply this morning, trading close to 91.5 cents (U.S.), up about a third of a cent from Monday's close. There's some relief that Quebec won't be heading toward a referendum on sovereignty following the Liberal majority win in the provincial election Monday - but the biggest factor is that the U.S. dollar is particularly weak this morning against major currencies.
In overseas markets, China's Shanghai composite index, which was closed Monday for a holiday, rose sharply to a 1 1/2-month high with the help of a rally in banking stocks. The Nikkei fell, however, as a stronger yen overshadowed positive data that showed February's current account returning to a surplus for the first time in five months. European stocks continue under pressure, taking their cue from the weak tone on Wall Street, with most major indexes down around 1 per cent.
Now, here's a closer look at what's going on this morning and what's to come.
MARKETS:
Equities:
Futures: S&P 500 -0.04 per cent; Dow -0.04 per cent; Nasdaq +0.10 per cent; S&P Toronto +0.02 per cent
Hong Kong's Hang Seng +0.98 per cent
Shanghai composite index +1.90 per cent
Japan's Nikkei -1.36 per cent
London's FTSE 100 -0.84 per cent
Germany's DAX -0.70 per cent
France's CAC 40 -0.77 per cent
Commodities:
WTI crude oil (Nymex May) +0.90 per cent at $101.34 (U.S.) a barrel
Gold (Comex Jun) +1.12 per cent at $1,312.80 (U.S.) an ounce
Copper (Comex May) -0.05 per cent at $3.04 (U.S.) a pound
Currencies:
Canadian dollar at 91.46 (U.S.), up 0.0031
U.S. dollar index down 0.24 at 79.99
Bonds:
U.S. 10-year Treasury yield 2.70 per cent, down 0.0020
ECONOMIC INDICATORS:
Canada housing starts for March were 156,800 when annualized, below expectations for 193,000 and February's reading of 192,100.
Canada building permits for February fell 11.6 per cent, more than the 2.6 per cent drop economists expected, after gaining 8.5 per cent in January.
STOCKS TO WATCH:
IMAX said it planned to sell a fifth of its Chinese subsidiary IMAX China Holding to local investors, in a move that could help it eventually list the unit in Hong Kong. Two Chinese investors will each pay around $40-million for stakes of 10 per cent. IMAX issued a statement late on Tuesday that confirmed a report from the Wall Street Journal earlier in the day.
Nokia has won approval from Chinese competition authorities to sell its mobile phone business to Microsoft Corp without having to change its main technology patent practices.
Fairfax Financial Holdings will hold its annual meeting.
Earnings include: Bankers Petroleum, Alcoa.
ANALYST ACTIONS:
Citibank downgraded Domtar to "sell" from "neutral" and cut its price target to $90 (U.S.) from $106.
Canaccord Genuity downgraded Newalta to "hold" from "buy" and maintained a $20 (Canadian) price target.
Raymond James raised its price target on Air Canada to $6 (Canadian) from $5 but maintained an "underperform" rating.
Canaccord Genuity hiked its price target on Transition Therapeutics to $13.25 (Canadian) from $9.80 and reiterated a "speculative buy" recommendation.
SunTrust Robinson Humphrey upgraded Yelp to "buy" from "neutral" but cut its price target to $85 (U.S.) from $100.
Wunderlich Securities downgraded Cisco to "hold" from "buy" and cut its price target to $24 (U.S.) from $25.
Wells Fargo downgraded Dr. Pepper Snapple to "underperform" from "market perform" and cut its price target range to $46-$48 from $47-49.
BMO Nesbitt Burns upgraded Eli Lilly to "market perform" from "underperform" and hiked its price target to $62 (U.S.) from $50.
Stifel Nicolaus upgraded Nike to "buy" from "hold" with a price target of $87 (U.S.).
THIS MORNING'S TOP INVESTING LINKS:
The Canadian dollar is one of the most hated currencies in the world right now. Meanwhile, bullish market sentiment is a dangerously high levels.
How to tell if a merger rumour will come true.
Dennis Gartman has moved his equity exposure to near zero, bracing for a market correction.
The rise of "off-exchange trading" could be much worse for the broader market than high-speed trading.
Templeton star money manager Mark Mobius is buying tech stocks, believing valuations have now come down to attractive levels.
Tax tips for BMO ETF investors.
What to make of the recent boom in U.S. IPOs.
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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