Skip to main content
inside the market

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. and Canadian stock futures, as well as European equities, are drifting around this morning, with investors largely staying on the sidelines ahead of several key economic events later this week as well as more corporate earnings.

But Chinese stocks overnight saw a decisive move to the upside, with the Shanghai composite index rallying 2.42 per cent to seven-month highs, with gains led by the banking sector. The bullish mood there was bolstered in part by a Reuters report suggesting the country's fifth-biggest bank by assets planned to seek more private investors, which would be part of a government reform plan to let private capital play a bigger role in the economy and boost efficiency at state banks. Also key, data over the weekend showed industrial profits in China growing at a stronger pace in the first half of the year compared to 2013, with June seeing a very robust 18 per cent rise in earnings. The report followed other data points in recent days that suggest the country may be able to achieve its 7.5 per cent growth rate this year, thanks in part to recent mini-stimulus measures.

Closer to home, the pace of M&A activity is continuing to pick up, with Dollar Tree this morning agreeing to buy Family Dollar for about $8.5-billion in cash and stock. Family Tree shares are up about 5 per cent in premarket trade and Family Dollar about 22 per cent. The deal could spark further speculation about more consolidation activity to come in the retail sector, and there will be close attention paid to how shares trade this morning in Dollarama -- Canada's big dollar-store chain.

Today will see a handful of large caps reporting earnings, but the pace will pick up considerably later this week. So far, about 79 per cent of S&P 500 companies that have reported quarterly results have beaten Street estimates for profit, while 66 per cent exceeded sales projections, according to Bloomberg tabulations. While the profit beats are in line with recent quarters, the beat rate in sales has been particularly encouraging, given it's running above the last several quarters so far.

Among the big economic events this week will be the Federal Reserve's policy meeting and the U.S. jobs report for July.

Now, here's a closer look at what's going on this morning and what's to come.

MARKETS:

Equities:

Futures: S&P 500 -0.03 per cent; Dow -0.02 per cent; Nasdaq +0.01 per cent; S&P/TSX +0.03 per cent

Hong Kong's Hang Seng +0.88 per cent

Shanghai composite index +2.42 per cent

Japan's Nikkei +0.46 per cent

London's FTSE 100 +0.14 per cent

Germany's DAX -0.15 per cent

France's CAC 40 +0.38 per cent

Stoxx 600 +0.01 per cent

Commodities:

WTI crude oil (Nymex Sep) -0.61 per cent at $101.47 (U.S.) a barrel

Gold (Comex Dec) +0.09 per cent at $1,306.50 (U.S.) an ounce

Copper (Comex Sep) +0.25 per cent at $3.25 (U.S.) a pound

Currencies:

Canadian dollar at 92.52 (U.S.), up 0.0006

U.S. dollar index down 0.01 at 81.01

Bonds:

U.S. 10-year Treasury yield 2.49 per cent, up 0.02

ECONOMIC INDICATORS:

(10 a.m. ET) U.S. releases pending home sales for June. Consensus is for a contraction of 0.3 per cent, after rising 6.1 per cent in May.

STOCKS TO WATCH:

Dollar Tree this morning agreeing to buy Family Dollar for about $8.5-billion (U.S.) in cash and stock. Family Tree shares are up about 5 per cent in premarket trade and Family Dollar about 22 per cent. The deal could spark further speculation about more consolidation activity to come in the retail sector, and there will be close attention paid to how shares trade this morning in Dollarama -- Canada's big dollar-store chain. The other big dollar store in the U.S., Dollar General, is down 2.2 per cent in premarket trading.

Zillow has agreed to buy Trulia in a $3.5-billion (U.S.) deal.

Tyson Foods Inc. said it would sell its Mexican and Brazilian poultry businesses to JBS SA, the world's No. 1 meat producer, for $575-million (U.S.). Tyson also reported a 4.4 per cent increase in third-quarter profit and forecast sales for fiscal year ending September 2015 above the average analyst estimate.

Other earnings today include: Acadian Timber, Atco, Canadian Utilities, Toromont, Denny's, Eastman Chemical, Herbalife, Hertz Global Holdings.

ANALYST ACTIONS:

Raymond James downgraded Mullen Group to "underperform" from "market perform" and maintained a $27.50 (Canadian) price target.

Raymond James downgraded Coeur Mining to "market perform" from "outperform" and cut its price target to $10 (U.S.) from $13.50.

Raymond James downgraded Athabasca Oil to "market perform" from "outperform" and cut its price target to $7.50 (Canadian) from $10.50.

Desjardins upgraded Granite REIT to "buy" from "hold" and hiked its price target to $45 (Canadian) from $43.

Industrial Alliance Securities downgraded Gildan activewear to "buy" from "top pick" and hiked its price target to $76 (Canadian) from $74.

RBC Dominion Securities downgraded Cascades to "sector perform" from "outperform" and cut its price target to $7.50 (Canadian) from $9.

BMO downgraded Pfizer to "market perform" from "outperform" and cut its price target to $31 (U.S.) a share from $34.

Barclays downgraded ExxonMobil to "underweight" from "equal weight" but raised its price target to $105 (U.S.) from $100.

JPMorgan upgraded Xerox to "neutral" from "underperform" and raised its price target to $14 (U.S.) from $13.

Goldman Sachs added Calpine to its Americas conviction buy list and raised its price target to $27 (U.S.) from $25.

Wunderlich upgraded Time Warner to "buy" from "hold" and raised its target to $190 (U.S.) from $146.

----

For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities.

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe