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.
Investors are putting on a brave face this morning, sending global markets higher despite the recent flare-up in geopolitical tensions and nagging feelings that stocks may be priced for perfection unless corporate earnings grow at an impressive pace.
Futures for the S&P 500 are up about 0.4 per cent, and for the TSX 0.1 per cent, with modest weakness in gold prices this morning showing signs of holding down gains in Canada's main stock index.
Market jitters over last week's downing of a passenger jet over Ukraine appear to be easing, as rebels in the region have begun releasing the bodies of the 298 people killed and passed along flight recorders to Malaysian authorities. They appear to be meeting several of the key demands from Malaysia and Western countries, and that's calming investors nerves over the political ramifications of the disaster. Foreign ministers from the European Union will meet later today in Brussels to discuss the situation and may recommend further sanctions against Russia. Russian President Vladimir Putin promised today to do everything possible to influence pro-Russian separatists in eastern Ukraine and help ensure a full probe into the Malaysia Airlines crash last week.
Today is a big day for corporate earnings, with names such as McDonald's, Microsoft and Apple reporting second-quarter results. We highlight some key results below in our Stocks to Watch section. Monday night, Canadian National Railway released results that beat analysts' expectations on both the top and bottom line, setting the stock up for gains at today's open. Meanwhile, investors are being reminded this morning that valuations in the energy sector may have become stretched after this year's big run-up on the TSX; Canaccord Genuity downgraded Imperial Oil to a "sell" rating today, commenting that it's priced to perfection.
Now, here's a closer look at what's going on this morning and what's to come.
MARKETS:
Equities:
Futures: S&P 500 +0.43 per cent; Dow +0.34 per cent; Nasdaq +0.48 per cent; S&P/TSX +0.14 per cent
Hong Kong's Hang Seng +1.69 per cent
Shanghai composite index +1.00 per cent
Japan's Nikkei +0.82 per cent
London's FTSE 100 +0.80 per cent
Germany's DAX +0.81 per cent
France's CAC 40 +0.80 per cent
Stoxx 600 +0.90 per cent
Commodities:
WTI crude oil (Nymex Sep) +0.23 per cent at $103.09 (U.S.) a barrel
Gold (Comex Dec) -0.56 per cent at $1,308.10 (U.S.) an ounce
Copper (Comex Sep) +0.41 per cent at $3.21 (U.S.) a pound
Currencies:
Canadian dollar at 93.03 (U.S.), down 0.0011
U.S. dollar index up 0.17 at 80.73
Bonds:
U.S. 10-year Treasury yield 2.49 per cent, up 0.02
ECONOMIC INDICATORS:
U.S. consumer price index for June rose 2.1 per cent rise from a year earlier, matching market expectations.
(10 a.m. ET) U.S. existing home sales for June, forecast to rise 1.6 per cent to an annualized rate of 4.97 million.
(10 a.m. ET) U.S. Richmond Fed Manufacturing Index.
STOCKS TO WATCH:
Herbalife shares are holding steady in the premarket after tumbling 11 per cent Monday after hedge fund manager Bill Ackman said in television interviews that he will hold a presentation at 10 a.m (ET) today that will prove the nutrition company is a fraud.
Canadian National Railway shares are up 1 per cent in the U.S. premarket after late Monday reporting second-quarter adjusted profit of $1.03 (Canadian), beating the Street consensus of $1. Revenues of $3.11-billion beat the Street view of $3.10-billion. It also bolstered its 2014 financial outlook.
PrairieSky Royalty, the Encana Corp. spinoff that made its trading debut this spring, posted a $23.9-million profit in its first financial report released late Monday. The results beat market expectations.
McDonald's reported Q2 EPS of $1.40 (U.S.) versus expectations of $1.44. Shares are down 2 per cent in the premarket.
Coca-Cola reported Q2 adjusted EPS of 64 cents (U.S.) versus expectations of 63 cents. Shares are down 1.2 per cent in the premarket.
Kimberly-Clark reported Q2 adjusted EPS of $1.49 (U.S.) versus expectations of $1.50.
Lockheed Martin reported Q2 EPS of $2.76 (U.S.) versus expectations of $2.66. It also boosted its profit outlook. Shares are up 2 per cent in the premarket.
Verizon Communications reported Q2 adjusted EPS of 91 cents (U.S.) versus expectations of 90 cents.
DuPont reported Q2 EPS of $1.17 (U.S.) versus expectations of $1.17. Shares are up 0.1 per cent in the premarket.
Harley-Davidson Inc reported a higher-than-expected quarterly profit on Tuesday but cut its full-year forecast for motorcycle shipments, citing weaker-than-expected U.S. retail sales and a delay in getting its newest bike into dealer showrooms. Shares are down 1.6 per cent in the premarket.
Comcast Corp.'s second-quarter net income rose 15 per cent to nearly $2 billion, topping Wall Street estimates.
Netflix shares are holding steady in the premarket after late Monday reporting quarterly EPS of $1.15 (U.S.), close to Street expectations.
Other earnings today include: CanWel Building Materials; Allegheny Technologies; Apple; Broadcom; Centene; Comcast; Credit Suisse Group; Crocs; Domino's Pizza; Dupont; Electronic Arts; Gannett; Intuitive Surgical; Juniper Networks; McDonald's; Microsoft; RadioShack; Robert Half International; TD Ameritrade Holdings; Travelers Companies.
U.S. small-business lender CIT Group Inc said it would buy regional lender OneWest Bank NA for $3.4 billion in cash and stock, its second deal in two months to boost its middle-market lending operations.
ANALYST ACTIONS:
Canaccord Genuity downgraded Imperial Oil to "sell" from "hold" and raised its price target to $55 (Canadian) from $53, commenting that the stock is priced to perfection.
Several analysts have hiked their price targets on Canadian National Railway in the wake of its better-than-expected second-quarter results. Desjardins raised its target to $79 (Canadian) from $73 and maintained a "buy rating; Citigroup raised its target to $68 (U.S.) from $66 and maintained a "neutral" rating; Canaccord Genuity raised its target to $69 (Canadian) from $64 and maintained a "hold" rating; BMO Nesbitt Burns raised its target to $76 (Canadian) from $72 and maintained a "market perform" rating. Euro Pacific upgraded its rating to "buy" from "neutral" and raised its price target to $76 from $63. Merrill Lynch raised its price target to $72 (U.S.) from $67.
National Bank Financial downgraded Teck Resources to "underperform" from "sector perform" and raised its price target to $26.50 (Canadian) from $25.50.
Amazon was downgraded to "neutral" from "buy" at Citigroup, with the price target cut to $395 (U.S.) from $414.
Citigroup raised its price target on Netflix to $453 (U.S.) from $410 and maintained a "neutral" rating. Cantor Fitzgerald raised its target to $500 from $425 and maintained a "buy" rating. Jefferies raised its target to $350 from $300 but maintained an "underperform" rating.
Barclays upgraded Hasbro to "overweight" from "equalweight" with a price target of $59 (U.S.).
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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