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.
An unexpected move by the Bank of Japan to aggressively expand the pace of its quantitative easing measures has ignited a surge in global equity markets this morning, paving the way for a strong rally in North American equities today.
Not all sectors of the stock market are set to soar, however. Gold and silver prices this morning have tumbled to their lowest levels since 2010, as traders shun precious metals in favour of equity markets, especially given another jump in the U.S. dollar today.
Stock futures for the major U.S. indexes are up by about 1 per cent, with futures for the resource-heavy TSX posting gains roughly half of that.
Gold - which is in precarious shape from a technical standpoint and is being further undermined by the triggering of automated sell orders, is down by about 2 per cent.
The central bank expanded its Japanese government bond purchases to the equivalent of about 80 trillion yen, or $727-billion, a year, a rise of 30 trillion yen from the previous pace. It also plans to triple its purchase of exchange-traded funds and real estate investment trusts.
Separately, Japan's public pension fund increased its target for holdings of foreign shares to 25 per cent from 12 per cent of its portfolio. The boost in its bond buying program was only predicted by three of 32 analysts that had been surveyed by Bloomberg News, so the action has taken most by surprise.
The bank is concerned about weak inflationary trends preventing further growth in its economy. In a statement, it said that "if the current downward pressure on prices remains ... there is a risk that conversion of deflationary mindset, which has so far been progressing steadily, might be delayed."
Prior to the action, Japan released numbers showing that inflation fell to its lowest level in nearly a year, while the measure of job creation worsened for the first time in more than three years. While the U.S. economy has been showing promising growth trends of late, the same can't be said of other key global economies, including Japan.
There's now optimism that Japan's stimulus measures will help bolster global growth at a time when the U.S. Federal Reserve has just pulled the plug on its own quantitative easing measures.
There were also inflation numbers released out of the euro zone this morning. Consumer prices rose by 0.4 per cent from a year ago in October. That was line with market expectations, and was a slight rise from September's 0.3 per cent rise. Now, here's a closer look at what's going on this morning and what is still to come.
MARKETS:
Futures:
S&P 500 +1.01 per cent; Dow +1.03 per cent; Nasdaq +1.39 per cent; S&P/TSX +0.61 per cent
Equities:
Hong Kong's Hang Seng +1.25 per cent
Shanghai composite index +1.21 per cent
Japan's Nikkei +4.83 per cent
London's FTSE 100 +1.09 per cent
Germany's DAX +1.72 per cent
France's CAC 40 +1.93 per cent
Stoxx 600 +1.30 per cent
Commodities:
WTI crude oil (Nymex Dec) -0.89 per cent at $80.40 (U.S.) a barrel
Natural gas (Nymex Jan) +2.38 per cent at $4.00 (U.S.)
Gold (Comex Dec) -2.06 per cent at $1,173.90 (U.S.) an ounce
Copper (Comex Dec) +0.56 per cent at $3.08 (U.S.) a pound
Currencies:
Canadian dollar at 89.33 (U.S.), down 0.0001
U.S. dollar index up 0.35 at 86.50
Bonds:
U.S. 10-year Treasury yield 2.34 per cent, up 0.03
ECONOMIC INDICATORS:
Canada real GDP for August fell 0.1 per cent from July, or up 2.2 per cent from a year earlier. Economists had expected a flat month-over-month performance, and year-over-year growth of 2.3 per cent.
U.S. consumer spending fell in September for the first time in eight months. The Commerce Department said on Friday consumer spending declined 0.2 per cent last month as demand for goods tumbled and services barely rose. Spending had increased by an unrevised 0.5 per cent in August. Economists polled by Reuters had expected consumer spending to increase 0.1 per cent in September.
(955 a.m. ET) University of Michigan Consumer Sentiment index. It's forecast at 86.4.
STOCKS TO WATCH:
Exxon Mobil is up 2 per cent in the premarket after posting third-quarter earnings of $1.89 a share, beating Wall Street forecasts of $1.71.
Earnings include: Clearwater Seafoods; Cogeco Cable; Cogeco Inc.; Imperial Oil; Ambev; BNP Paribas; CBOE Holdings; Chevron; Exxon Mobil; Weyerhaeuser.
ANALYST ACTIONS:
Industrial Alliance downgraded Amaya Gaming Group to "hold" from "buy" with a price target of $31 (Canadian).
Raymond James upgraded Canfor Pulp Products to "strong buy" from "outperform" with a price target of $18.50 (Canadian).
Macquarie upgraded Canadian Oil Sands to "neutral" from "underperform" with a price target of $19 (Canadian).
CIBC World Markets downgraded MacDonald Dettwiler & Associates to "sector perform" from "sector outperform" with a price target of $96 (Canadian).
PI Financial and Cormark Securities both upgraded OceanaGold to "buy" from the equivalent of hold ratings with price target of $3.90 (Canadian) and $4, respectively.
Macquarie downgraded Petromanas Energy to "neutral" from "outperform" with a price target of 40 cents (Canadian).
RBC Dominion Securities downgraded Teranga Gold to "sector perform" from "outperform" with a price target of 70 cents (Canadian).
Sirius XM Canada Holdings was slapped with three downgrades: TD Securities lowered its rating to "buy" from "action list buy" with a price target of $8 (Canadian); BMO Nesbitt Burns cut its rating to "underperform" from "market perform" with a price target of $5.75; and Canaccord Genuity lowered its rating to "hold" from "buy" with a price target of $7.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
Why retail investors will never hear market-moving news first.
Predicting bonds with stocks: A strategy to improve timing in corporate and high-yield bonds.
Gold equals 15 barrels of oil in bearish sign for bullion.
GLD's fall from grace.
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Darcy Keith