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. stocks are showing signs of only a meek recovery this morning, and the TSX appears set to open lower, one day after the Canadian benchmark suffered its most severe fall of this year at the hands of plunging energy equities.
WTI crude oil futures, earlier this morning seeing gains of as much as 1 per cent, have turned lower ahead of the opening bell, with the most active contract in New York now down about 1 per cent. Futures for U.S. stock indexes are modestly in the green, but for the TSX are struggling to get out of the red. Gold is down and the Canadian dollar is trading just above 87 cents (U.S.).
After the relentless fall in crude oil in the second half of this year - including Wednesday's nearly 5 per cent drop at the hands of OPEC reducing its demand outlook for 2015 - few are willing to call a bottom to the energy sector. Yet, insider buying is surging and an increasingly amount of higher-cost oil produced around the world is becoming uneconomic at current prices - spurring some nervy investors to do a bit of bargain hunting. Plunging energy equities spread to other sectors of the TSX on Wednesday that have little to do with oil, suggesting to some the broad selloff has made for some good entry points. The TSX is now down about 12 per cent from its August highs and is in full-fledged correction territory.
Overseas trading has been relatively quiet so far today. The Nikkei took a mild thumping after Japan released its leading gauge of capital spending and said that core machinery orders fell 4.9 per cent in October from a year earlier, much worse than expectations for a 0.3 per cent decline. European stocks are mostly lower, partly in reaction to the late selloff on Wall Street on Wednesday., But there was also a lackluster report out from the European Central Bank today showing that the uptake of a low-rate loan program met market expectations - disappointing some that were expecting more robust demand.
The U.S. released a stronger-than-expected retail sales report this morning, with sales hitting their fastest growth rate in eight months. Gold traded lower on the news and U.S. stock futures got a slight further boost.
Here's a a closer look at what's going on this morning and what is still to come.
MARKETS:
Futures:
S&P 500 +0.36 per cent; Dow +0.29 per cent; Nasdaq +0.21 per cent; S&P/TSX -0.52 per cent
Equities:
Hong Kong's Hang Seng -0.90 per cent
Shanghai composite index -0.48 per cent
Japan's Nikkei -0.89 per cent
London's FTSE 100 -0.72 per cent
Germany's DAX -0.17 per cent
France's CAC 40 -0.42 per cent
Stoxx 600 -0.68 per cent
Commodities:
WTI crude oil (Nymex Jan) -1.08 per cent at $60.27 (U.S.) a barrel
Natural gas (Nymex Jan) +0.27 per cent at $3.72 (U.S.)
Gold (Comex Feb) -0.56 per cent at $1,222.50 (U.S.) an ounce
Copper (Comex Mar) +0.28 per cent at $2.90 (U.S.) a pound
Currencies:
Canadian dollar at 87.13 (U.S.), up 0.0002
U.S. dollar index down 0.05 at 88.21
Bonds:
U.S. 10-year Treasury yield 2.15 per cent, down 0.02
ECONOMIC INDICATORS:
U.S. initial jobless claims for last week were 294,000, just a little less than Street estimates for 297,000.
U.S. retail sales rose 0.7 per cent in November from October, weaker than Street estimates for a 0.4 per cent rise. Excluding the auto sector, sales were up 0.6 per cent, versus the estimate of a 0.5 per cent gain.
Canada third-quarter capacity utilization was 83.4 per cent, close to forecasts for 83.0 per cent, and higher than the second quarter's 82.7 per cent. .
Canada's new housing price index for October rose 0.1 per cent from a month earlier, matching Street estimates.
(10 a.m. ET) U.S. business inventories for October. They are forecast to rise 0.2 per cent.
STOCKS TO WATCH:
Cenovus cut its 2015 capex budget for next year by about 26 per cent.
Staples jumped 11 per cent in the premarket and Office Depot climbed 8 per cent after Activist investor Starboard Value LP disclosed stakes in both office-supply retailers in a move that could set up a potential merger.
Lululemon Athletica shares are down 2 per cent in the premarket after it reported Q3 EPS of 42 cents vs. the Street estimate of 38 cents - but predicted fourth-quarter earnings and revenue below analyst estimates.
Ciena shares are down more than 3 per cent in the premarket after reporting a surprise loss for its fiscal fourth quarter. The adjusted loss was 8 cents per share, versus expectations for 12 cents in profits.
Transat reported earnings of 79 cents, down from $1.40 a year ago, but still appearing to beat market expectations.
Other earnings today include: Dominion Diamond; Lumenpulse; North West Co.; Nordson.
ANALYST ACTIONS:
Merrill Lynch downgraded Suncor Energy to "neutral" from "buy" and cut its price target to $37 (U.S.) from $41. It cited weaker near-term oil prices but continues to like Suncor's relative valuation in the integrated peer group.
Canaccord Genuity downgraded Laurentian Bank of Canada to "hold" from "buy" and cut its price target to $50 (Canadian) from $55.
Canaccord Genuity downgraded WesternOne to "hold" from "buy" and cut its price target to $3.75 (Canadian) from $7.50.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
Volatility spike signals a December rebound for this aging bull.
Don't dismiss the dire message of the junk bond market. Also see: High-yield ETFs near two-year lows as oil decline continues.
S&P 500 company sales are accelerating and margins are expanding.
Small caps could be ready for a breakout.
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Darcy Keith