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.
Stock futures are suggesting a weaker start for the major North American indexes this morning, and once again today, energy investors are set to take a bruising as the price of crude oil continues to slide.
Crude prices took a sudden dive Monday afternoon after news emerged that top exporter Saudi Arabia deepened price cuts for U.S. customers. That action reinforced views that the country is intent on preserving market share even as global prices continue to weaken. This morning, the December futures contract for crude is trading at multi-year lows of below $77 (U.S.) per barrel and had been down by more than 3 per cent.
All this is taking its toll on the Canadian dollar. On the bright side, this should help bolster portfolios with U.S. stocks denominated in the greenback. The loonie is trading near a five-year low of 87.71 cents (U.S.).
European stocks are coming under pressure as the opening bell approaches as well. Earlier today, the European Commission slashed its growth forecasts for the euro zone to 0.8 per cent this year, from a 1.2 per cent forecast in the spring. It now sees growth at a meagre 1.1 per cent in 2015, down from its earlier projection of 1.7 per cent. It lowered its projections for Germany, in particular. The European Commission holds a policy meeting later this week, in which growth and stimulus measures will be actively debated.
In overseas markets, the Nikkei continued to bask in the stimulus warmth emitted from the Bank of Japan on Friday, rallying 2.7 per cent to a seven-year high after being closed Monday for a holiday.
Meanwhile, today is the U.S. midterm election. Investors don't appear overly concerned with whether the Republicans take control of the Senate or Democrats hang on. But the vote could create some volatility if some races remain too close to call by Wednesday morning.
Many stocks are poised for significant moves today on earnings and other corporate news, including a big shakeup at the Bank of Nova Scotia. Much more on all this below.
MARKETS:
Futures:
S&P 500 -0.28 per cent; Dow -0.20 per cent; Nasdaq -0.33 per cent; S&P/TSX -0.21 per cent
Equities:
Hong Kong's Hang Seng -0.29 per cent
Shanghai composite index +0.04 per cent
Japan's Nikkei +2.73 per cent
London's FTSE 100 -0.22 per cent
Germany's DAX +0.17 per cent
France's CAC 40 -0.57 per cent
Stoxx 600 -0.37 per cent
Commodities:
WTI crude oil (Nymex Dec) -2.28 per cent at $76.98 (U.S.) a barrel
Natural gas (Nymex Jan) +0.43 per cent at $4.16 (U.S.)
Gold (Comex Dec) -0.18 per cent at $1,167.70 (U.S.) an ounce
Copper (Comex Dec) -1.83 per cent at $3.01 (U.S.) a pound
Currencies:
Canadian dollar at 87.71 (U.S.), down 0.0037
U.S. dollar index down 0.15 at 87.15
Bonds:
U.S. 10-year Treasury yield 2.33 per cent, down 0.02
ECONOMIC INDICATORS:
The Canada merchandise trade balance showed a surplus of $710-million in September. Consensus was for a deficit of $700-million.
The U.S. trade deficit was $43.0-billion in September, wider than the $40-billion that was expected and August's deficit of $40.1-billion.
(10 a.m. ET) U.S. factory orders for September. Consensus expects a drop of 0.5 per cent.
STOCKS TO WATCH:
Scotiabank warned that it's cutting the equivalent of 1,500 jobs companywide — about two-thirds of them in Canada — and taking a number of accounting measures that will cut about $341 million from its profit for the fourth quarter. In total, Scotiabank expects to recognize $341 million of items in the fourth quarter ended Oct. 31 that will reduce its diluted earnings by 28 cents per share.
TransCanada said it will spend as much as $2.7-billion (Canadian) through 2017 to expand its natural gas pipeline system to meet rising customer demand in western Canada. TransCanada reported Q3 comparable EPS of 63 cents vs. the Street estimated 61 cents. But revenues missed expectations.
WestJet Airlines reported third-quarter profit of 66 cents per share, missing the Street view by 2 cents. Sales gained 9.2 per cent, matching the average estimate.
PrairieSky Royalty late Monday reported Q3 funds from operations of 53 cents (Canadian), which exceeded expectations.
Alibaba Group, in its first post-IPO earnings report, said it had revenue of $2.74-billion in its second quarter, beating the Street consensus of $2.61-billion. Adjusted earnings matched Street views. Shares are up 1.5 per cent in the premarket. Shares in Yahoo, which owns a stake in Alibaba, are up 0.3 per cent.
Burger King Worldwide Inc reported its highest quarterly growth in North America same-restaurant sales in two years, driven by the reintroduction of Chicken Fries and strong sales of the BBQ Bacon Whopper burger. The company, which is acquiring Canadian coffee chain Tim Hortons Inc, said North America same-restaurant sales rose 3.6 per cent in the third quarter.
Talisman Energy is reporting net income of $425-million (U.S.) for the third quarter, or 41 cents per share. That compares with a loss of $54-million, or five cents per share, in the same quarter of 2013.
Office Depot Inc reported its first quarterly profit after three quarters of losses, and raised its full-year adjusted operating income forecast.
Sprint shares are down 8.5 per cent in premarket trading a day after posting revenue growth that was below consensus estimates.
Agrium boosted its quarterly dividend.
Priceline reported adjusted Q3 EPS of $22.16 (U.S.) vs. estimates of $21.11. But it provided a weak outlook and its shares are down 6 per cent in the premarket.
Archer Daniels Midlands reported Q3 EPS of 81 cents (U.S.) vs. estimates for 73 cents.
International Paper reported adjusted Q3 EPS of 95 cents (U.S.) vs. expectations for 88 cents.
Other earnings today include: 5N Plus ; Avigilon; AK Steel Holding; Bellatrix; Brookfield Renewable Energy; Brookfield Residential Properties; Burger King Worldwide; CT REIT; Catalyst Paper; Foraco; Intercontinental Exchange; Linamar ; Michael Kors; Goodrich Petroleum; Liberty Media; Motorola Solutions; Office Depot; Pembina Pipeline; Ritchie Bros. Auctioneers; Russel Metals ; Talisman Energy; Time; Trican Well Service; Twenty-First Century Fox; Valero Energy.
ANALYST ACTIONS:
Cormark Securities downgraded Bank of Montreal to "buy" from "top pick" with a price target of $93 (Canadian).
Cormark Securities downgraded Constellation Software to "market perform" from "buy" with a price target of $330 (Canadian).
Laurentian Bank upgraded GuestLogix to "buy" from "hold" with a price target of $1.30 (Canadian).
Bernstein downgraded Nokia to "underperform" from "market perform" and cut its price target to $6.42 (U.S.) from $7.21.
Bernstein upgraded Anadarko Petroleum to "outperform" from "market perform" with a price target of $115 (U.S.).
SunTrust Robinson downgraded Herbalife to "neutral" from "buy" with a price target of $55 (U.S.).
THIS MORNING'S TOP INVESTING READS ON THE WEB:
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Two of the biggest mistakes traders make.
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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