The Before the Bell report is compiled by editors of The Globe and Mail and is updated throughout the morning to reflect latest developments. Colin Cieszynski, Chartered Financial Analyst and Chartered Market Technician, is chief market strategist with CMC Markets.
Stock markets around the world continue their move into April in a slump. U.S. index futures are down 0.3 per cent while the Nikkei fell 0.9 per cent. The Dax is flat while the FTSE is the only major market in the green, rising 0.4 per cent.
Energy and metal prices are on the rebound today with West Texas Intermediate crude oil up 0.5 per cent and holding $50 (U.S.), copper up 0.04 per cent, gold up 0.5 per cent and silver up 1.0 per cent. Despite this tailwind, resource currencies are struggling with U.S.-Canadian exchange rate back above $1.3400 and a New Zealand-U.S. dollar exchange rate back under $0.7000.
Considering the resource countries like Canada and Norway were among the league leaders in manufacturing PMI, resource country weakness seems odd. With the Japanese yen up today as well, it seems to me that we're seeing profit-taking in risk markets between major developments and some of that money is wandering back in to defensive havens.
Data on Monday showing U.S. car sales lagged market, which helped push Wall Street lower, and geopolitics, including the Russian metro blast and Trump comments on North Korea, also weighed on markets.
Today, the spotlight for news is on trade and manufacturing. Trade balances for the U.S. and Canada could attract more attention than usual in the current political climate with U.S. President Donald Trump looking to renegotiate NAFTA. The U.S. trade deficit declined sharply in February as imports from China fell by a record amount and American exports rose for a third straight month. Meanwhile, Canada swung to an unexpected trade deficit in February as exports tumbled by the most in nearly a year. U.S. factory orders and a durables update may also attract attention.
Wednesday brings service PMI reports and ADP payrolls. In addition, the health care sector could be active if reports of a new Obamacare reform proposal come to fruition. Investors also have their eyes on the meeting later this week between Trump and Chinese premier Xi Jinping.
Now, here is a closer look at key market data, and corporate and economic news.
Futures (as of about 7:30 a.m. ET)
Dow -0.30 per cent; S&P 500 -0.37 per cent; Nasdaq: -0.37 per cent; TSX 60 -0.05 per cent
Japan's Nikkei -0.90 per cent
Shanghai composite index +0.39 per cent
Hong Kong's Hang Seng +0.62 per cent
Germany's DAX -0.17 per cent
London's FTSE +0.35 per cent
France's CAC 40 -0.01 per cent
WTI crude oil (Nymex May) +0.52 per cent at $50.50 (U.S.) a barrel
Gold (Comex June) +0.54 per cent at $1,260.80 (U.S.) an ounce
Copper (Comex May) +0.04 per cent at $2.60 (U.S.) a pound
Canadian dollar -0.28 at 74.42 cents (U.S.)
U.S. dollar index +0.01 at 101.
Canada 10-year bond yield +0.16 at 1.54 per cent
KEY ECONOMIC RELEASES
Euro Area retail sales
China markets closed
(8:30 a.m. ET) Canada merchandise trade surplus for February. Consensus is $670-million, down from $807-million in January.
Canada swung to an unexpected trade deficit in February as exports tumbled by the most in nearly a year, dampened by a decrease in shipments of aircraft and canola, data from Statistics Canada showed on Tuesday. Following three consecutive months of surpluses, February's $972-million deficit fell short of economists' expectations for a surplus of $500-million. January was revised down to a surplus of $421-million from the initially reported $807-million.
(8:30 a.m. ET) U.S. goods and services trade deficit for February. Consensus is $46-billion, down from $48.5-billion in previous month.
The U.S. trade deficit declined sharply in February as imports from China fell by a record amount and American exports rose for a third straight month. The Commerce Department says the deficit fell to $43.6 billion in February, 9.6 per cent below January's deficit of $48.2 billion. Exports rose a tiny 0.2 per cent to $192.9 billion. Imports dropped 1.8 per cent to $236.4 billion as the flow of Chinese goods tumbled by $8.6 billion, led by a big drop in cellphone imports. The politically sensitive trade deficit with China narrowed to $23 billion, 26.6 per cent below the January total. President Donald Trump, who was sharply critical of Chinese trade practices during last year's presidential campaign, will hold his first meeting with Chinese President Xi Jinping later this week in Florida.
(10 a.m. ET) U.S. factory orders for February. Consensus is an increase of 0.9 per cent from January.
KEY STOCKS TO WATCH
Also see: Tuesday's small-cap stocks to watch
Shares of Bank of America fell 1.6 percent to $23.21 in premarket trading on Tuesday after Citigroup downgraded the stock to "neutral" from "buy".
Paratek Pharmaceuticals surged 41 percent to $26.15 after its lead antibiotic drug succeeded in a study.
Liberty Interactive Corp. said on Tuesday it would buy Alaska-based telecoms firm General Communication Inc. for $1.12-billion.
Pacific Crest Securities downgraded graphics chipmaker Nvdia to "underweight" from "sector weight," on signs of desktop graphics chip market saturation. Its shares fell 3.6 per cent in premarket trading.
Goldman added heavy equipment maker Caterpillar to its "Conviction Buy" list. Its shares gained 1.6 per cent in premarket trading.
Citi downgraded Bank of America's shares to "neutral" from "buy" following its nearly 40-per-cent run-up since the election. Its shares fell 1.7 per cent in premarket trading.
Citi cut retailers Urban Outfitters and L Brands to "neutral" from "buy," saying L Brands has too many stores amid declining customer traffic, while Urban Outfitters is suffering from weak traffic trends. Urban Outfitters shares were off 3.9 per cent in premarket trading. L Brands was off 1.2 per cent in premarket trading.
Rig firm Seadrill warned on Tuesday that its stock will lose almost all of its value and its bonds will be hit as the Norwegian company prepares for potential bankruptcy proceedings to restructure $14 billion in debt and liabilities. It shares fell 36.5 per cent in premarket trading to $1.06 (U.S.).
Teva Pharmaceutical won Food and Drug Administration approval for its drug to treat Huntington's chorea, an inherited and fatal degenerative disorder. Its shares gained 2 per cent in premarket trading.
Discount retailer Dollar Tree was upgraded to "neutral" from "underweight" at Atlantic Equities.
Online dating service operator Match Group, which operates Tinder, is rated "overweight" in new coverage at Piper Jaffray.
Indonesia has issued Freeport McMoRan Inc.'s local unit with a temporary "special mining permit" allowing the miner to apply for a resumption of copper concentrate exports while the two sides negotiate longer-term mining rights. Its stock rose 2 per cent in premarket trading.
Ralph Lauren Corp. said on Tuesday it would cut jobs and shutter some office and store locations, including its flagship Polo store on Fifth Avenue, New York City, as part of a cost-cutting plan. The company said it expects to incur about $370 million in charges related to the plan, which was announced in June.
Earnings include: Acuity Brands Inc.; Global Payments Inc.; Hudson's Bay Co.; Sirius XM Canada Holdings Inc.
With files from wire services