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.
Investors are showing few signs of losing their enthusiasm for stocks, one day after the TSX enjoyed its biggest rally of this year. Stock futures this morning are pointing to possible gains of 1 per cent or greater when markets open on both Wall Street and Bay Street - and energy stocks should once again be among equities seeing sturdy gains, as the price of crude is up about 2 per cent.
Full-out bargain hunting is being seen as the U.S. Federal Reserve provided market players Wednesday with the reassurance that the world's most powerful central bank is in no rush to hike interest rates. The Fed removed language in its policy statement that rates will stay low for a "considerable time" but simultaneously emphasized that it "can be patient" - a balancing act of language that seems to have done the trick. In a press conference Wednesday, Fed chair Janet Yellen commented that markets should not expect the kind of "measured pace" of monetary tightening seen in the 2004 to 2006 timeframe. This time around, such moves will be data-dependent, she suggested. The Fed said rates will probably hold rates near zero at least through the first quarter of next year and may not return to more normal levels until 2017.
Bottom fishing in energy stocks, meanwhile, is becoming more entrenched as more and more producers announce plans to reduce capital expenditures for next year, a possible precursor to lower future production levels and a re-balancing of supply-demand dynamics. Marathon Oil, Husky Energy, MEG Energy, and Penn West Petroleum were among those producers in recent days announcing plans to cut spending next year. The charts are also looking more attractive for crude oil right now after Brent briefly fit a five-year low of $58.50 (U.S.) per barrel earlier this week; the $60 level appears to be acting as strong support for now.
The Fed comments and crude oil's rebound have major markets in Europe rallying about 2 per cent this morning. Gains there are also being linked to a better-than-expected reading from the German Ifo business climate survey, which came in at 105.5 versus expectations of 105.4, with a drop in oil and euro weakness seen as benefiting the German economy.
Greek stocks aren't joining the party, however, with that country's equity market down about 1.5 per cent. In Greece's first round of a snap presidential election, the prime minister's preferred candidate failed to gain enough votes to win. A second and third round of voting will take place before January 2015. Unless there's a turnaround in support, the country could be moving a step closer to early elections that open the door for the rise of an anti-austerity party.
Meanwhile, emerging markets are calmer this morning following the turmoil that was created earlier in the week by the crashing ruble and failed attempt to stop the slide by Russia's surprise hike in interest rates. The ruble is up about 2 per cent against the U.S. dollar, after Russian President Vladimir Putin said during a news conference that the currency will stabilize and suggested that the sanctions imposed by the West were pushing the country into reforms that would make the economy more efficient.
Now, here's a closer look at what's going on this morning and what is still to come.
MARKETS:
Futures:
S&P 500 +1.18 per cent; Dow +1.15 per cent; Nasdaq +1.37 per cent; S&P/TSX +0.97 per cent
Equities:
Hong Kong's Hang Seng +1.09 per cent
Shanghai composite index -0.10 per cent
Japan's Nikkei +2.32 per cent
London's FTSE 100 +0.96 per cent
Germany's DAX +2.01 per cent
France's CAC 40 +2.41 per cent
Stoxx 600 +2.02 per cent
Commodities:
WTI crude oil (Nymex Jan) +1.89 per cent at $57.57 (U.S.) a barrel
Natural gas (Nymex Mar) +0.95 at $3.71
Gold (Comex Feb) +1.03 per cent at $1,206.80 (U.S.) an ounce
Copper (Comex Mar) +0.24 per cent at $2.88 (U.S.) a pound
Currencies:
Canadian dollar at 86.30 (U.S.), up 0.0042
U.S. dollar index down 0.11 at 89.02
Bonds:
U.S. 10-year Treasury yield 2.18 per cent, up 0.04
ECONOMIC INDICATORS:
U.S. initial jobless claims last week were 289,000, less than expectations of 295,000. The previous week was revised to 294,000 from 295,000.
(945 a.m. ET) U.S. preliminary services sector Purchasing Managers Index from Markit.
(10 a.m. ET) U.S. to releases the Philadelphia fed index and leading indicators.
STOCKS TO WATCH:
Couche-Tard announced plans to to buy U.S. convenience store The Pantry for $1.7-billion (U.S.). The all-cash transaction values The Pantry at $36.75 per share, a 27 per cent premium to The Pantry's closing share price Tuesday.
Twin Butte Energy announced a 37.5 per cent cut to its monthly dividend and a $40-million, or 22 per cent, reduction to its 2015 capital budget, due to the recent drop in oil prices.
Barrick Gold said it will suspend operations at its Zambia mine after a royalty rate was raised.
Oracle shares are up 6 per cent in the premarket after reporting quarterly results late Wednesday.
Earnings include: Accenture, ConAgra Foods, Nike, Red Hat, Rite Aid, Winnebago Industries, Worthington Industries.
ANALYST ACTIONS:
Desjardins Securities downgrades Sherritt International to "hold" from "buy" on share price appreciation, and maintained a $3 (Canadian) target.
Macquarie downgraded Penn West Petroleum to "underperform" from "neutral" with a price target of $2 (Canadian).
RBC Dominion Securities upgraded Superior Energy Services to "outperform" from "sector perform" with a price target of $25 (U.S.).
RBC Dominion Securities downgraded Savanna Energy Services to "sector perform" from "outperform" with a price target of $6 (Canadian).
Raymond James upgraded Tahoe Resources to "outperform" from "market perform" with a price target of $17.25 (Canadian).
Cormark Securities upgraded Fortuna Silver Mines to "buy" from "market perform" with a price target of $6.25 (Canadian).
Goldman Sachs upgraded FedEx to "conviction buy" from "neutral" and raised its price target to $211 (U.S.) from $173.
RBC Dominion Securities upgraded Baker Hughes to "outperform" from "sector perform" with a price target of $72 (U.S.).
THIS MORNING'S TOP INVESTING READS ON THE WEB:
Be wary of getting the Cuba investment bug.
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Here's why investors should be worried about waning risk appetites.
Five most groundbreaking bond ETFs of 2014.
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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