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.
Overseas markets were mostly positive overnight, taking a lead from modest gains on Wall Street Friday when the U.S. employment report provided further evidence of steady improvement in the labour market. North American stock futures, however, suggest buying momentum is starting to run out. They are ever so slightly in the red ahead of the opening bell.
There are a number of merger and acquisition deals grabbing the market's attention this morning, including Tyson Foods winning a bidding war for Hillshire Brands, Merck agreeing to buy Idenix for about $3.85-billion (U.S.), and Analog Devices buying Hittite Microwave in a $2-billion (U.S.) deal.
Gains in Asian markets were led by Japan, with the Nikkei ending at a fresh three-month high after revised first-quarter gross domestic product figures for the country showed the economy growing at an annualized rate of 6.7 per cent, well ahead of the initial estimate of 5.9 per cent and economists' forecast of 5.6 per cent. There were some positive data out of China as well overnight, with its May trade surplus jumping as exports gained 7 per cent from a year earlier. However, imports were down 1.6 per cent.
For the North American trading day, there's little to suggest a break from the low volatility trading levels, with no major U.S. economic data planned for today. The market may have to contend with sideways trading action for some time; while U.S. stocks appear fully valued based on past and predicted earnings, there are few catalysts on the horizon that would suggest an urgent need to take profits.
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 -0.09 per cent; Dow -0.04 per cent; Nasdaq -0.03; S&P/TSX -0.01 per cent
Hong Kong's Hang Seng +0.72 per cent
Shanghai composite index +0.05 per cent
Japan's Nikkei +0.31 per cent
London's FTSE 100 +0.20 per cent
Germany's DAX +0.10 per cent
France's CAC 40 -0.09 per cent
Commodities:
WTI crude oil (Nymex Jly) +0.56 per cent at $103.24 (U.S.) a barrel
Gold (Comex Aug) +0.29 per cent at $1,256.10 (U.S.) an ounce
Copper (Comex Jly) -0.67 per cent at $3.03 (U.S.) a pound
Currencies:
Canadian dollar at 91.59 (U.S.), up 0.0007
U.S. dollar index up 0.08 at 80.49
Bonds:
U.S. 10-year Treasury yield 2.62 per cent, up 0.03
ECONOMIC INDICATORS:
Canadian housing starts in May rose to an annualized rate of 198,300, above expectations of 185,000 and an upwardly revised 196,687 units in April.
STOCKS TO WATCH:
Tyson Foods has signed a binding offer to acquire Hillshire Brands to $63 (U.S.) in cash per share, nearly $1-billion more than Pilgrim's Pride bid. Tyson is down 4 per cent in the premarket and Hillshire is up 5 per cent.
Carl Icahn has taken a new 9.4 per cent stake in Family Dollar Stores and is looking for possible strategic alternatives, it was revealed late on Friday. Family Dollar has announced a poison pill this morning. Family Dollar shares are up 12 per cent in the premarket.
Merck has agreed to buy Idenix for about $3.85-billion (U.S.), or $24.50. Idenix shares are up 237 per cent in the premarket.
Analog Devices has agreed to buy Hittite Microwave in a $2-billion (U.S.) deal.
McDonald's says its global sales rose slightly in May as sales in China rebounded after last year's worries about avian flu. Global sales at established restaurants grew 0.9 per cent.
Earnings include: Casey's General Stores; Hertz Global Holdings.
ANALYST ACTIONS:
Jefferies upgraded both Dollar General and Family Dollar Stores to "buy" from "hold" with price targets of $75 (U.S.) and $79 (U.S.), respectively. Jefferies speculates that Family Dollar could put itself up for sale following Carl Icahn's new stake in the company, and thinks the combination of the two retailers would provide "enormous" synergies.
RBC Dominion Securities downgraded Enerplus to "sector perform" from "outperform" and maintained a $25 (Canadian) price target.
Cantor Fitzgerald Canada upgraded Ritchie Bros. Auctioneers to "buy" from "hold" and hiked its price target to $26 (U.S.) from $24.
RBC Dominion Securities cut its price target on Just Energy Group to $7 (Canadian) from $8 and maintained a "sector perform" rating.
Industrial Alliance Securities cut its price target on Major Drilling Group International to $8.50 from $9.50 and maintained a "hold" rating.
Wells Fargo upgraded J.M. Smucker to "market perform" from "underperform" and raised its price target to $102-$104 (U.S.) from $90-82.
THIS MORNING'S TOP INVESTING LINKS:
How to estimate stock and bond returns.
Putting 100 per cent of your portfolio in stocks, instead of a 60/40 mix with bonds, really doesn't produce much extra in long-term returns.
Three stocks Warren Buffett and insiders love.
Why investors are flocking to emerging market dollar-denominated debt.
Why you have way too much invested in U.S. stocks.
How to spot a value trap.
The market is now in extreme greed territory.
Coffee prices are coming down dramatically.
U.S. REITs have been on fire.
-----
For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities.
Darcy Keith