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 are little changed heading into today's trading session, with global traders largely backing away from taking fresh positions given a lack of important economic data this week.
The key debate swirling around trading desks continues to be the timing of the Federal Reserve's first interest rate hike since the financial crisis, and fresh research from the San Francisco Fed is grabbing attention this morning. The study found that investors are expecting the Fed to keep interest rates lower for longer, and to raise them more slowly, than the makers of U.S. monetary policy themselves expect.
Economists of Wall Street firms on average see the third quarter of 2015 as the most likely date of the Fed's first rate rise, and estimate the Fed's short-term interest-rate target will be at just 0.75 per cent at the end of 2015 and 2.13 per cent at the end of 2016, the paper said, according to Reuters. By contrast, Fed officials see rates at 1 per cent by the end of next year and rising to 2.5 per cent by the end of the 2016.
Some on the buy side are also now thinking Fed hikes aren't that far away. During Inside the Market's live discussion Tuesday, Sprott Asset Management CEO John Wilson projected the first rate hike will likely come in the first quarter of next year. Indeed, yields in the bond market have been tracking higher over the last few days, with the 10-year Treasury yield this morning at a more than one-month high of 2.52 per cent.
In overseas markets today, Hong Kong tumbled nearly 2 per cent - although that came after its market was closed for a holiday on Tuesday, so it was playing catchup. Mainland Chinese shares drifted lower, showing little reaction to comments from Chinese Premier Li Keqiang promising that the China economy won't have a hard-landing. He said the country will deepen policy changes to promote business, attract foreign investment and protect intellectual property.
Now, here's a closer look at what's going on this morning.
MARKETS:
Equities:
Futures: S&P 500 +0.08 per cent; Dow +0.09 per cent; Nasdaq +0.16 per cent; S&P/TSX +0.06 per cent
Hong Kong's Hang Seng -1.93 per cent
Shanghai composite index -0.37 per cent
Japan's Nikkei +0.25 per cent
London's FTSE 100 +0.18 per cent
Germany's DAX -0.01 per cent
France's CAC 40 +0.08 per cent
Stoxx 600 -0.04 per cent
Commodities:
WTI crude oil (Nymex Dec) +0.04 per cent at $91.49 (U.S.) a barrel
Gold (Comex Dec) +0.54 per cent at $1,255.20 (U.S.) an ounce
Copper (Comex Dec) -0.10 per cent at $3.10 (U.S.) a pound
Currencies:
Canadian dollar at 91.09 (U.S.), up 0.0005
U.S. dollar index down 0.14 at 84.13
Bonds:
U.S. 10-year Treasury yield 2.52 per cent, up 0.01
ECONOMIC INDICATORS:
Canada's capacity utilization for the second quarter was up 82.7 per cent, matching Street expectations and up from 82.5 per cent in the first quarter.
(10 a.m. ET) U.S. releases wholesale inventories for July, forecast to rise 0.5 per cent after gaining 0.3 per cent in June.
STOCKS TO WATCH:
Apple shares are up 0.1 per cent in the premarket after closing slightly lower on Tuesday following the company's unveiling of new products, including the Apple Watch and new iPhones.
Dollar General is taking its $80 (U.S.) per share offer to buy Family Dollar Stores directly to its rival's shareholders, in an attempt to pull off a hostile takeover after its offer was rejected.
The Wall Street Journal is reporting Microsoft is set to pay about $2-billion to buy the maker of the popular Minecraft videogame.
Earnings include: Empire Co.; Men's Wearhouse; Restoration Hardware.
ANALYST ACTIONS:
Goldman Sachs raised its price target on Apple to $115 (U.S.) from $107 and reiterated a "buy" rating. Pacific Crest downgraded Apple to "sector perform" from "outperform", estimating the stock's fair value at $100 and suggesting that the potential upside of its new devices is already priced into its stock. FBN Securities raised its price target to $115 from $110 and reiterated an "outperform" rating.
Raymond James upgraded GasFrac Energy Services to "market perform" from "underperform" but cut its price target to 85 cents (Canadian) from $1.80.
UBS upgraded Twitter to "buy" from "neutral" and raised its price target to $65 (U.S.) from $50.
Canaccord Genuity cut its price target on GT Advanced Technologies to $13 (U.S.) from $16 and maintained a "hold" rating.
Raymond James initiated coverage of Chinook Energy with an "outperform" rating and $3.10 (Canadian) price target.
RBC Dominion Securities initiated coverage on High Liner Foods with an "outperform" rating and $26 (Canadian) price target.
THIS MORNING'S TOP READS ON THE WEB:
Investors expect lower rates for longer than the Fed itself.
Federal Reserve officials are considering whether to alter their guidance on the likely path of interest rates to give them more flexibility to react to changes in the economy.
McDonald's is losing the happy meal crowd.
BRICs have under-performed U.S. equities over the last five years, and other interesting charts.
Not all markets have recovered from the financial crisis.
Almost no one believes the stock market will fall.
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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