The Before the Bell report is updated throughout the premarket to reflect the latest news developments and market moves. Check back later for updates.
Trading on the TSX today should be relatively quiet, as U.S. markets are closed for a holiday. But it was anything but calm in Asia overnight, as Chinese equities suffered a bloodbath in reaction to regulators there taking steps to rein in speculative lending. The Shanghai composite index tumbled more than 7 per cent - its biggest one-day slide in nearly seven years - with financial stocks collapsing by the daily trading limit of 10 per cent.
The China Securities Regulatory Commission barred three brokerages from opening new margin trading accounts for three months and said it would prevent margin trading contracts of longer than six months. The action came after an investigation into their practices, and other brokers were given warnings. The penalties could foreshadow more curbs on credit-financed trading by China's government, which is concerned about the stock market boom in the country turning into a bubble. Shanghai stocks gained more than 50 per cent last year.
Traders in China were already on edge a day before the country releases its fourth-quarter gross domestic product reading. Economists expect the report Tuesday to show that the economy grew 7.2 per cent, down from 7.3 per cent in the third quarter. If the predictions come true, it would mean GDP would be below the government's 7.5 per cent target and be the weakest in 24 years.
Not aiding sentiment in China overnight was a report showing that new home prices in December fell an average 4.3 per cent year-on-year in 68 of 70 major cities.
Markets are looking much more upbeat in Europe today, with the Stoxx 600 broad index of European equities hitting seven-year highs, displaying ever more confidence that the European Central Bank will reveal an aggressive bond-buying program - or quantitative easing - after a policy meeting on Thursday. Economists, on average, predict the bank will announced 550 billion euros in bond purchases. Reuters is quoting sources as saying that the ECB may adopt a hybrid approach – buying debt and sharing some of the risk across the euro zone while central banks among individual nations make separate purchases of their own. Bond yields in several European nations are trading once again at record lows this morning in anticipation of the launch of the program.
In commodity markets, crude oil is softening again, with New York futures in electronic trading down around 1 per cent - but still above multi-year lows from earlier this month. JPMorgan is undermining sentiment, after it slashed its forecast for Brent to an average of $49 this year, from $82 a barrel. It thinks oil prices could bottom out in March at an average of $38 a barrel.
Now, here's a closer look at what's going on this morning and what is still to come.
MARKETS:
Futures:
S&P 500 +0.02 per cent; Dow +0.02 per cent; Nasdaq +0.05 per cent; S&P/TSX -0.50 per cent
Equities:
Hong Kong's Hang Seng -1.52 per cent
Shanghai composite index -7.71 per cent
Japan's Nikkei +0.89 per cent
London's FTSE 100 +0.10 per cent
Germany's DAX +0.41 per cent
France's CAC 40 +0.31 per cent
Stoxx 600 +0.17 per cent
Commodities:
WTI crude oil (Nymex Mar) -0.88 per cent at $48.26 (U.S.) a barrel
Natural gas (Nymex Mar) -3.45 per cent at $3.01
Gold (Comex Feb) +1.05 per cent at $1,278.10 (U.S.) an ounce
Copper (Comex Mar) +0.68 per cent at $2.58 (U.S.) a pound
Currencies:
Canadian dollar at 83.53 (U.S.), up 0.0001
U.S. dollar index down 0.003 at 92.51
Bonds:
U.S. 10-year Treasury yield 1.84 per cent, unchanged
ECONOMIC INDICATORS:
Foreigners bought $4.29-billion (Canadian) more Canadian securities than they sold in November, the fifth straight net acquisition.
STOCKS TO WATCH:
Goldcorp has offered to buy full control of Probe Mines in a friendly takeover valued at $526-million. Goldcorp currently owns about 9.3 per cent of Probe and is offering 0.1755 of a Goldcorp share for each of the remaining shares. Probe shareholders would also receive shares of a new publicly listed company focused on the Ring of Fire area.
Lightstream Resources announced it is suspending its monthly dividend.
ANALYST ACTIONS:
Raymond James downgraded WesternOne to "market perform" from "outperform" and cut its price target to $4 (Canadian) from $6.
Raymond James upgraded WSP Global to "strong buy" from "outperform" and maintained a $46 (Canadian) price target.
Raymond James downgraded Bird Construction to "outperform" from "strong buy" and cut its price target to $15 (Canadian) from $17.
THIS MORNING'S TOP INVESTMENT READS ON THE WEB:
Four lessons learned from investing in 2014.
New high - new low warning triggered again.
OPEC's future seen in mining slump as oil price pummeled.
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Darcy Keith