The Before the Bell report is updated throughout the premarket to reflect the latest news developments and market moves. Check back later for updates.
Markets are starting the day on a sour note, with U.S. stock futures down nearly 1 per cent and European equities mostly lower, as traders absorb readings on growth in both the Canadian and U.S. economies.
U.S. GDP for the fourth quarter grew 2.6 per cent on an annualized basis, below expectations for 3 per cent and well below the 5 per cent growth seen in the third quarter of last year. Canada's November GDP grew 1.9 per cent on an annualized basis, compared to forecasts for 2.1 per cent.
Global markets are counting on the U.S. economy at a time when much of the world is struggling to grow. Today's GDP reading is adding fresh doubts about just how strong the U.S. economy is. In Canada, the weak GDP reading added to bets that the Bank of Canada could cut interest rates even further in the near future. The Canadian dollar slid to below the 79 cents (U.S.) to fresh multi-year lows.
The troubles faced by the euro zone became further in focus overnight with the release of the latest inflation data in that region. The annual inflation rate in the euro area fell to negative 0.6 per cent. That matches the biggest decline in prices in the history of the single currency and exceeded the consensus prediction for a drop of 0.5 per cent. The European Central Bank revealed a $1.1-trillion euro bond-buying program last week aimed to recharge economies, but the action may take some time to filter down to growth and inflation rates.
There were some positive economic data out of Europe today as well: seasonally-adjusted unemployment in the single currency zone fell to 11.4 per cent in December - the lowest rate since mid-2012 - from 11.5 per cent in November. Spain's preliminary gross domestic product data for the fourth quarter showed a 2 per cent rise from a year earlier.
Asian markets were mixed overnight, with Shanghai coming under further pressure to close 4.2 per cent lower for the week. Investors are starting to back away from Chinese stocks amid slowing economic growth and increased regulatory scrutiny of margin lending.
More corporate earnings are out today in the U.S., although at not nearly at the pace of the last few days. Companies representing nearly 57 per cent of the S&P 500 market cap have reported results so far heading into today, with earnings excluding financials beating Street expectations by 5.6 per cent and revenues surpassing forecasts by 1.2 per cent, according to RBC calculations. About 79 per cent of companies have topped earnings expectations while 56 per cent have topped sales forecasts, according the Bloomberg.
Now, here's a closer look at what's going on this morning and what is still to come.
MARKETS:
Futures:
S&P 500 -0.9 per cent; Dow -0.9 per cent; Nasdaq -0.5 per cent
Equities:
Hong Kong's Hang Seng -0.36 per cent
Shanghai composite index -1.60 per cent
Japan's Nikkei +0.38 per cent
London's FTSE 100 -0.30 per cent
Germany's DAX +0.05 per cent
France's CAC 40 -0.10 per cent
Stoxx 600 -0.21 per cent
Commodities:
WTI crude oil (Nymex Mar) -0.04 per cent at $44.51 (U.S.) a barrel
Natural gas (Nymex Mar) -1.80 per cent at $2.67
Gold (Comex Apr) +0.67 per cent at $1,264.30 (U.S.) an ounce
Copper (Comex Mar) +0.29 per cent at $2.46 (U.S.) a pound
Currencies:
Canadian dollar at 78.25 (U.S.), down 0.0094
U.S. dollar index down 0.07 at 94.71
Bonds:
U.S. 10-year Treasury yield 1.68 per cent, down 0.07
ECONOMIC INDICATORS:
Canada's real GDP for November rose 1.9 per cent on an annualized basis, less than Street expectations for 2.1 per cent. On a month over month basis, it was down 0.2 per cent, versus expectations for a flat reading.
U.S. real GDP for the fourth quarter rose 2.6 per cent when annualized, below expectations for 3 per cent and down from 5 per cent in the third quarter.
U.S. employment-cost index rose 0.6 per cent in the fourth quarter, matching expectations.
(955 a.m. ET) University of Michigan consumer sentiment index. This will be the final reading for January. Consensus is calling for 98.2, in line with the preliminary reading, but well above November's 93.6.
STOCKS TO WATCH:
Amazon shares are up about 10 per cent in premarket trading after reporting Q4 EPS of 45 cents, beating the Street view of 19 cents.
Google shares are up just over 1 per cent in premarket trading after late Thursday reporting profits and revenues in Q4 that missed Street views.
Visa shares are up about 4 per cent in premarket trading after reporting Q4 EPS of $2.53 late Thursday, beating the Street view of $2.49.
Chevron reported Q4 EPS of $1.85 (U.S.) vs. expectations fro $1.64.
Mastercard reported Q4 EPS of 69 cents (U.S.) vs. Street expectations of 67 cents.
Altria reported Q4 adjusted EPS of 66 cents (U.S.), matching Street views.
Eli Lilly reported Q4 non-GAAP EPS of 75 cents (U.S.) vs. expectations for 73 cents.
Other earnings today include Tyson Foods and Xerox.
ANALYST ACTIONS:
Canadian Oil Sands was upgraded "buy" from "sell" at Veritas Investment Research. The target price is $10 (Canadian).
Rogers Communications was upgraded to "buy" from "market perform" at Cormark Securities. The target price is $49 (Canadian).
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Darcy Keith