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.
U.S. stock futures and European equities are well into the red this morning, pointing to a possible day of losses for the TSX and Wall Street, as the latest manufacturing number out of China is combining with increasingly violent clashes in Ukraine to unnerve investors.
S&P 500 futures are down nearly 0.4 per cent and Germany's DAX index is down 1.4 per cent. Futures for Toronto stocks suggest the resource-heavy TSX will see comparatively lighter losses, as gold and crude oil prices are higher this morning.
HSBC's final reading of manufacturing activity in China came in at 48.1 for April, below a preliminary reading of 48.3 and marking the fourth straight month below 50 - signifying contraction. The country's official PMI reading was earlier reported at 50.4.
While this continues to point to a slowdown in the vital Chinese factory sector, the final reading was the first improvement since October - rising by 0.1 of a point from March - providing just a glimmer of hope that the downward pressure on the debt-laden economy may be lightening up.
On the geopolitical front, clashes broke out in six cities in eastern Ukraine this weekend, with pro-Russian forces overrunning a police station in Odessa, freeing about 70 activists that were held there. Friday saw the deadliest day in the conflict so far, with 46 lives lost. Western nations continue to implement fresh sanctions against Russia.
Meanwhile, there's little upward pressure on interest rates this morning despite the much-stronger-than-expected U.S. jobs report on Friday. The yield on the benchmark 10-year treasury is at 2.58 per cent this morning, close to its lowest level since February.
Now, here's a closer look at what's going on this morning and what's to come.
MARKETS:
Equities:
Futures: S&P 500 -0.39 per cent; Dow -0.37 per cent; Nasdaq -0.38 per cent; S&P Toronto -0.04 per cent
Hong Kong's Hang Seng -1.28 per cent
Shanghai composite index +0.03 per cent
Japan's Nikkei Closed for holiday
London's FTSE 100 Closed for holiday
Germany's DAX -1.41 per cent
France's CAC 40 -1.13 per cent
Commodities:
WTI crude oil (Nymex Jun) +0.43 per cent at $100.20 (U.S.) a barrel
Gold (Comex Jun) +0.65 per cent at $1,311.50 (U.S.) an ounce
Copper (Comex Jly) -0.37 per cent at $3.06 (U.S.) a pound
Currencies:
Canadian dollar at 91.08 (U.S.), down 0.0004
U.S. dollar index down 0.01 at 79.50
Bonds:
U.S. 10-year Treasury yield 2.58 per cent, unchanged
ECONOMIC INDICATORS:
(10 a.m. ET) U.S. releases non-manufacturing ISM for April. Consensus is for 54.0, up from March's 53.1.
STOCKS TO WATCH:
Target announced it has named its CFO, John Mulligan, as interim CEO after Gregg Steinhafel resigned. Shares are down 1.4 per cent in the premarket.
JPMorgan Chase shares are down 2 per cent in the premarket after the bank late Friday announced it incurred legal expenses of $347-million in the first quarter and its market revenue would drop 20 per cent in the second quarter.
Twitter shares are down about 2 per cent in premarket trading. Nearly half a billion of its shares today become eligible for sale as a lock-up expires following its IPO last year.
Berkshire Hathaway shares are down just slightly in the premarket after it announced late Friday its first-quarter profit slipped 4 per cent, mostly because of an accounting charge, with its revenues rising 4 per cent.
Pfizer reported Q1 adjusted EPS of 57 cents (U.S.) vs. the Street estimated 55 cents. but shares are down 0.8 per cent in the premarket as its revenue missed analysts' expectations.
Tyson Foods reported Q2 profit of 60 cents a share, versus Street expectations of 63 cents. Shares are down 0.5 per cent in the premarket.
Occidental Petroleum reported Q1 EPS of $1.75 (U.S.) vs. the expected $1.70.
Other earnings today include: Alaris Royalty; Newalta; Ritchie Bros.; Savanna Energy; Anadarko Petroleum; Hecla Mining; Orbitz Worldwide; Ritchie Bros. Auctioneers; Tyson Foods.
ANALYST ACTIONS:
Canaccord Genuity downgraded Linamar to "sell" from "hold" but maintained a $50 (Canadian) price target. It says its margins are near peak levels and the stock is pricey.
Desjardins Securities downgraded TransCanada to "hold" from "buy" and kept a $52.50 (Canadian) price target, citing recent share price appreciation.
Desjardins Securities upgraded Norbord to "buy" from "hold" with an unchanged $33 (Canadiain) price target.
Industrial Alliance Securities upgraded Davis + Henderson to "buy" from "hold" and raised its target to $33 (Canadian) from $30.
Desjardins Securities hiked its target on Gluskin Sheff & Associates to $36 (Canadian) from $32, but kept a "hold" rating. BMO Nesbitt Burns raised its target to $34 from $31 and reiterated a "market perform" rating. Both said shares are now fairly valued.
Desjardins Securities raised its target on Gildan Activewear to $75 (Canadian) from $66.50 and maintained a "buy" rating. Industrial Alliance upgraded Gildan to "top pick" from "strong buy" and kept a $74 price target.
Canaccord Genuity started coverage on TransAlta Renewables with a "buy" rating and $12.25 (Canadiain) target, citing its low risk and "attractive and sustainable dividend yield."
Bernstein upgraded Oracle to "outperform" from "market perform" and raised its price target to $49 (U.S.) from $40.
Canaccord Genuity downgraded Swift Energy to "hold" from "buy" and cut its price target to $12.50 (U.S.) from $14.50.
Topeka Capital upgraded Walt Disney to "buy" from "hold" with a price target of $91 (U.S.).
Stifel Nicolaus upgraded Bill Barrett to "buy" from "hold" with a price target of $30 (U.S.).
Raymond James upgraded Chipotle Mexican Grill to "outperform" from "market perform" with a price target of $560 (U.S.).
SunTrust Robinson Humphrey downgraded Host Hotels to "neutral" from "buy" with an unchanged price target of $22 (U.S.).
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