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.
The TSX is likely to open a little weaker this morning, as North American stock futures, European equities, and most major commodities are all modestly in the negative column.
This week marks the beginning of the second-quarter earnings season, starting with Alcoa on Tuesday and Wells Fargo on Friday. With world equity markets, including the S&P 500 and the TSX, hitting fresh record highs last week, stocks are looking vulnerable to a significant selloff if corporations can't deliver robust profit and sales growth. According to Bloomberg estimates, earnings for S&P 500 stocks are expected to rise 5 per cent in the quarter, with sales climbing 3 per cent. The Stoxx Europe 600 index is trading at about 15.6 times the estimate earnings of its members, near its highest valuation since 2009.
Asian markets were largely unchanged overnight. European traders received some unwelcome news today as Germany said its industrial production index for May fell 1.8 per cent from April, the biggest drop in more than two years and further evidence that German industry is treading water. International Monetary Fund chief Christine Lagarde hinted this weekend that the IMF may cut it global growth forecasts soon, warning that a rise in economic growth could prove "less robust than expected."
Now, here's a closer look at what's going on this morning and what's to come.
MARKETS:
Equities:
Futures: S&P 500 -0.17 per cent; Dow -0.14 per cent; Nasdaq -0.17 per cent; S&P/TSX -0.12 per cent
Hong Kong's Hang Seng -0.02 per cent
Shanghai composite index +0.03 per cent
Japan's Nikkei -0.38 per cent
London's FTSE 100 -0.22 per cent
Germany's DAX -0.21 per cent
France's CAC 40 -0.42 per cent
Commodities:
WTI crude oil (Nymex Aug) -0.19 per cent at $103.86 (U.S.) a barrel
Gold (Comex Aug) -0.45 per cent at $1,314.50 (U.S.) an ounce
Copper (Comex Sep) -0.79 per cent at $3.25 (U.S.) a pound
Currencies:
Canadian dollar at 93.93 (U.S.), up 0.0007
U.S. dollar index up 0.01 at 80.28
Bonds:
U.S. 10-year Treasury yield 2.64 per cent, down 0.002
ECONOMIC INDICATORS:
Canadian building permits for May rose 13.8 per cent from April, far above the consensus expectation for a rise of 2 per cent. Much of the rise was tied to commercial construction.
(10:30 a.m. ET) Bank of Canada's business outlook survey and senior loan office survey for Q2 is released.
STOCKS TO WATCH:
Canadian wireless players will be in focus today after the Globe and Mail reported that Ottawa will announce it is offering coveted chunks of public airwaves to the industry ahead of schedule and in a manner designed to force smaller players to merge and form a more formidable competitor to incumbents such as Bell, Rogers and Telus.
WestJet and Air Canada both reported their June travel statistics, both filling more seats than in May and improvements were also seen in other major metrics.
Archer Daniels Midland said today it would buy food-ingredients provider Wild Flavors GmbH to boost its product offering in a deal valued at 2.3 billion euros ($3.13-billion U.S.).
Bed Bath & Beyond has approved a new $2-billion (U.S.) share buyback plan.
ANALYST ACTIONS:
BMO Nesbitt Burns upgraded WestJet Airlines to "outperform" from "market perform" and raised its price target to $31 (Canadian) from $28.
Raymond James increased its price assumptions for WTI crude to $102.29 (U.S.) from $99.30 for this year, and its long-term price assumption was increased to $100 a barrel from $90. As a result, its price targets on several energy companies went up, including Suncor Energy (to $55 Canadian from $51, rated "outperform"); Baytex Energy (to $58 Canadian from $51, rated "outperform"); Canadian Natural Resources (to $54 Canadian from $47); Canadian Oil Sands (to $25 Canadian from $20.50, rated "market perform"); Cenovus Energy (to $42 Canadian from $40, rated "outperform"); MEG Energy (to $49 Canadian from $46, rated "outperform"); and Pengrowth Energy (to $8.50 Canadian from 48, rated "outperform").
TD Securities raised its price target on First Quantum Minerals to $30 (Canadian) from $27 and reiterated a "buy" rating.
Canaccord Genuity downgraded GT Advanced Technologies to "hold" from "buy" and maintained a $20 (U.S.) price target.
Deutsche Bank downgraded Coeur Mining to "hold" from "buy" and lowered its price target to $11 (U.S.) from $13.
Deutsche Bank downgraded Peabody Energy to "hold" from "buy" and cut its price target to $19 (U.S.) from $23.
RBC Dominion Securities raised its price target on Yum Brands to $94 (U.S.) from $87 and maintained a "top pick" rating.
Goldman Sachs upgraded Century Aluminum to "neutral" from "sell" and raised its price target to $15.50 (U.S.) from $8.
Merrill Lynch upgraded Williams-Sonoma to "buy" from "neutral" and raised its price target to $82 (U.S.) from $70.
FBR Capital upgraded Canadian Solar to "outperform" from "market perform" with a price target of $40 (U.S.).
BMO Nesbitt Burns upgraded Southern Copper to "outperform" from "market perform" with a price target of $40 (U.S.), up from $30.
THIS MORNING'S TOP INVESTING LINKS:
Bond bears: Admit that you were wrong.
Nobel prize-winning economist Joseph Stiglitz says he is "very uncomfortable" with current stock market levels, arguing they do not equal a strong economic recovery in the United States.
An argument for why the metals and mining sector has already hit bottom.
What some leading investment indicators are signalling about the market right now.
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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