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.
North American stock futures are suggesting this morning that the four-day rally in the S&P 500 may come to a halt today.
Futures for all the major indexes are virtually unchanged, with European equities largely flat, even amid reports that the European Central Bank is considering buying corporate bonds to stimulate the economy. That move would add to covered bond purchases the bank began this week and is another step closer to a full-blown quantitative easing program, which markets are hoping for in the wake of weak economic data out of the region this month, especially in Germany. Worrying investors across the pond are reports this morning that at least 11 banks could fail a region-wide financial health check this weekend.
The S&P has risen 4.2 per cent from a week ago, recouping much of the 7.4 per cent plunge that began Sept. 18, while volatility levels, as measured by the VIX index, have been declining over the past several sessions.
The panic selling, which was blamed on both nervous retail investors and leveraged hedge funds, seems to have subsided for now, and investors are using the opportunity to buy stocks at cheaper levels. Gluskin Sheff economist David Rosenberg told Inside the Market readers Tuesday in a live discussion that he expects fresh record highs for the markets later this year, or at least by early 2015 - and he isn't the only market observer expressing that optimism right now.
U.S. inflation data today showed a 1.7 per cent rise in September, a tad above expectations, but not enough to alter widely held perceptions that the Federal Reserve will hold off on hiking rates for a considerable time, perhaps not until late next year or even 2016. Meanwhile, weaker-than-expected Canadian retail sales data pushed the loonie lower this morning, but it's still within this month's trading range.
The more immediate concern may be how third-quarter earnings come in, and evidence is growing that corporate growth may be strong enough to justify the lofty valuations from earlier this year. Heading into this morning, about 80 per cent of S&P 500 companies have posted quarterly earnings this season that topped analysts' estimates for profit, with 61 per cent beating sales projections, according to Bloomberg. We detail some of the big earnings reports just in this morning below in our Stocks to Watch section.
Overnight, Japan's Nikkei was the star performer, rising 2.6 per cent to a one-and-a-half week high thanks to September trade data showing exports hitting a seven-month high.
Now, here's a closer look at what's going on this morning and what is still to come.
MARKETS:
Futures:
S&P 500 -0.02 per cent; Dow +0.05 per cent; Nasdaq -0.01 per cent; S&P/TSX -0.01 per cent
Equities:
Hong Kong's Hang Seng +1.37 per cent
Shanghai composite index -0.54 per cent
Japan's Nikkei +2.65 per cent
London's FTSE 100 -0.04 per cent
Germany's DAX +0.25 per cent
France's CAC 40 +0.09 per cent
Stoxx 600 +0.08 per cent
Commodities:
WTI crude oil (Nymex Dec) +0.23 per cent at $82.68 (U.S.) a barrel
Natural gas (Nymex Jan) -0.31 per cent at $3.87 (U.S.)
Gold (Comex Dec) -0.42 per cent at $1,246.50 (U.S.) an ounce
Copper (Comex Dec) +0.31 per cent at $3.04 (U.S.) a pound
Currencies:
Canadian dollar at 88.78 (U.S.), down 0.0031
U.S. dollar index up 0.19 at 85.50
Bonds:
U.S. 10-year Treasury yield 2.20 per cent, down 0.02
ECONOMIC INDICATORS:
Canadian retail sales for August fell 0.3 per cent from September, compared to the consensus call for a flat reading.
U.S. Consumer Price Index rose 1.7 per cent from a year ago, a little higher than the rise of 1.6 per cent expected by economists, and matching August's rise.
(10 a.m. ET) Bank of Canada policy announcement and monetary policy report. The bank will hold a press conference at 1115 a.m. (ET).
(330 p.m. ET) Bank of Canada Governor Poloz and Senior Deputy Governor Wilkins appear before the House Finance Committee.
STOCKS TO WATCH:
Canadian National Railway reported late Tuesday Q3 EPS of $1.04 (Canadian), a penny shy of estimates. It also announced a new share repurchase program.
Kinross Gold late Tuesday said it has agreed to sell its halted Fruta del Norte gold project in Ecuador to a company belonging to the Swedish-Canadian Lundin family for $240-million.
Yahoo shares are up nearly 4 per cent in the premarket after reporting late Tuesday Q3 adjusted EPS of 52 cents (U.S.) versus expecations for 30 cents.
Boeing reported Q3 EPS of $2.14 (U.S.) versus expectations for $1.97. It also hiked its earnings outlook for this year. Shares are up nearly 1 per cent in the premarket.
Abbott Laboratories reported Q3 adjusted EPS of 62 cents versus expectations for 60 cents.
U.S. Bancorp reported Q3 EPS of 78 cents (U.S.) versus expectations for 78 cents.
Northrop Grumman reported Q3 EPS of $2.26 (U.S.) versus the expected $2.13.
Dow Chemical reported Q3 EPS of 72 cents versus the expected 67 cents.
Norfolk Southern reported Q3 EPS of $1.79 (U.S.) versus the expected $1.83.
Other earnings today include: Mullen Group; Open Text; AT&T; Equifax; General Dynamics; GlaxoSmithKline; Stanley Black & Decker; Wynn Resorts; Xerox; Yelp.
ANALYST ACTIONS:
Cormark upgraded Canadian National Railway to "buy" from "market perform."
RBC Dominion Securities hiked its price target on Enbridge Income Fund Holdings to $32 (Canadian) from $30 and reiterated a "sector perform" rating.
Societe Generale downgraded Coca-Cola to "sell" from "hold" and cut its price target to $37.50 (U.S.) from $42.
BMO Nesbitt Burns downgraded Coeur Mining to "underperform" from "market perform" and cut its price target to $4 (U.S.).
THIS MORNING'S TOP INVESTING READS ON THE WEB:
The stock market stands on firm footing - for now.
Smart beta is more expensive than you think.
Insider trading is insanely profitable.
Why high-frequency trading is so hard to regulate.
Compared to the TSX, energy stocks haven't been this cheap in a decade.
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Have feedback on our daily Before the Bell report and suggestions on how to make it more useful in your investing day? Please contact Inside the Market Editor Darcy Keith at dakeith@globeandmail.com.
Darcy Keith