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.
Crude oil prices are catching a bid this morning, one day after another plunge that led to the TSX's worst day in 18 months. But the gains are looking tentative - and more broadly, all is not looking well for markets today.
For starters, Chinese markets ended with steep losses of more than 5 per cent overnight after a wild trading session that saw the biggest swings in the index in five years. The biggest concern: policy makers have determined that riskier bonds can no longer be used as collateral for some short-term loans. There were also reports overnight that some influential advisers to the government are recommending it cut its 2015 growth target to 7 per cent. Chinese stocks have surged to multi-year highs in recent sessions, and were looking vulnerable to profit-taking.
Then there's Greece, Europe's most indebted nation that not so long ago took centre stage when in came to the economic struggles in Europe. Its stock market plunged 11 per cent today, its biggest drop since 2008, as the government announced that voting for a new president will begin next week. It's a mainly ceremonial post, but the development is leading to fresh concerns about political stability in the country. Prime Minister Antonis Samaras will have to rely on opposition votes to push through his choice for the post. If he doesn't get them, the government could fall, which could mean parliamentary elections as early as January.
And then there's renewed worries about the U.S. Federal Reserve this morning and when it may pull the trigger on tighter monetary policy. The influential Wall Street Journal columnist Jon Hilsenrath, who is well connected to the thinking of Fed policy makers, wrote in an article published late Monday that officials from the central bank next week will likely affirm a plan to start hiking interest rates in 2015 and are debating getting rid of the phrase that rates will stay low for "a considerable time." Market players have been increasingly bracing for that day, especially after Friday's jobs numbers blew past expectations and even hinted of higher wage growth.
Futures for the S&P 500 have been slipping further into the red as the opening bell approaches, now down 0.7 per cent. U.S. crude oil prices are up about 1 per cent - a modest recovery that may not shield the resource-heavy TSX from much heavier losses.
Now, here's a closer look at what's going on this morning and what is still to come.
MARKETS:
Futures:
S&P 500 -0.72 per cent; Dow -0.71 per cent; Nasdaq -0.75 per cent; S&P/TSX -0.53 per cent
Equities:
Hong Kong's Hang Seng -2.34 per cent
Shanghai composite index -5.44 per cent
Japan's Nikkei -0.68 per cent
London's FTSE 100 -1.58 per cent
Germany's DAX -1.32 per cent
France's CAC 40 -1.70 per cent
Stoxx 600 -1.61 per cent
Commodities:
WTI crude oil (Nymex Jan) +1.13 per cent at $63.76 (U.S.) a barrel
Natural gas (Nymex Jan) +1.79 per cent at $3.66 (U.S.)
Gold (Comex Feb) +0.89 per cent at $1,205.50 (U.S.) an ounce
Copper (Comex Mar) -0.57 per cent at $2.87 (U.S.) a pound
Currencies:
Canadian dollar at 87.19 (U.S.), down 0.0001
U.S. dollar index down 0.15 at 88.88
Bonds:
U.S. 10-year Treasury yield 2.27 per cent, up 0.01
ECONOMIC INDICATORS:
(10 a.m. ET) U.S. releases wholesale inventories for October, forecast to rise 0.1 per cent.
STOCKS TO WATCH:
Talisman Energy says it has been approached by Spain's Repsol SA as well as other parties over potential deals. Talisman shares are up more than 7 per cent in U.S. premarket trading.
AGF Management is preparing to cut its dividend by 70 per cent in a move that will give the mutual fund and investment company the flexibility to invest more in its business.
Baytex Energy said it is slashing its dividend to 10 cents per share per month, down from the current 24 cents. It is also cutting its capex budget for next year.
Hudson's Bay said its net loss from continuing operations narrowed to $13-million (Canadian), or 7 cents per share, in the third quarter ended Nov. 1 from $126-million, or $1.05 per share, a year earlier. Sales nearly doubled to $1.91-billion. It also reaffirmed its 2014 guidance.
Other earnings today include: Orvana Minerals; Transcontinental; AutoZone; Burlington Stores; Krispy Kreme Doughnuts.
ANALYST ACTIONS:
Macquarie slashed its forecasts for crude oil, now expecting WTI to average $68 (U.S.) a barrel next year, down from $96. As a result, it downgraded Encana, Suncor Energy and MEG Energy all to "neutral" from "outperform." Encana's target went to $18 (U.S.) from $25; Suncor's to $42 (Canadian) from $47; and MEG Energy's to $20 (Canadian) from $37.
BMO Nesbitt Burns downgraded Baytex Energy to "market perform" from "outperform" and cut its price target to $23 (Canadian).
Longbow Research downgraded Louisiana-Pacific to "neutral" from "buy" with an unchanged price target of $16 (U.S.).
Atlantic Equities downgraded Macy's to "neutral" from "overweight" with a price target of $68 (U.S.), down from $62.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
Big trouble in China as Oil's slide inspires visions of world peace.
More signs that software is eating investment management.
A stock-picker's paradise awaits as correlations fall.
Millennials embrace investing for social good.
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Darcy Keith