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U.S. and Canadian stock futures are just slightly in positive territory this morning, suggesting a rather flat opening of trade today in the major indexes.
Markets today will be focused on the U.S. Federal Reserve and, specifically, what clues may come out of the minutes from its last policy meeting on April 28-29 on the timing of when its trend-setting interest rate may finally go up. The Fed lowered its economic growth forecasts at that meeting, but cited a number of one-time factors, including the wicked winter weather and a port strike on the U.S. West Coast.
A Reuters poll shows that 50 of 62 economists still expect the first rate hike in the third quarter of this year. But with recent sluggish economic data, including on consumer spending, there doesn't appear to be any immediate threat that monetary policy will be tightened in a hurry.
Indeed, earnings from key retailers today are reflecting the sluggish economy in the first few months of this year. Among names reporting are Target, Lowe's and Staples. Lowe's missed the Street consensus and shares are down 7 per cent in the premarket. Target beat expectations for profit and matched on revenues. Here at home, Sears Canada has also reported weaker-than-expected results.
Crude oil this morning is reclaiming some of the lost territory suffered on Tuesday when prices fell about 3 per cent amid a stronger U.S. dollar and persistent concerns about global oversupply. Late Tuesday, the American Petroleum Institute showed that U.S. crude inventories fell by 5.2 million barrels last week, much more than the 1 million barrels a Reuters survey had suggested.
In overseas markets, the euro slid to a two-week low and a rally in European shares stalled on Wednesday after a Greek official said the country may not make an upcoming repayment to the International Monetary Fund.
The euro's fall follows remarks from a European Central Bank board member on Tuesday that the central bank could increase the pace of its bond-buying in May and June, bringing its losses against the dollar this week to more than 3 percent.
The pause in European shares mirrored the sticky performance of Asian bourses, although the Nikkei in Tokyo jumped to a 15-year high after Japan posted surprisingly strong economic growth for the first quarter.
Japan's Nikkei stock index ended up 0.9 per cent at a fresh 15-year peak, helped by a weaker yen and data showing the economy grew at a 2.4 per cent annualized rate in the January-March period. That was its fastest pace in a year, beating the consensus estimate for 1.5 per cent growth.
Now, here's a closer look at what's going on this morning and what is still to come.
Futures:
S&P 500 +0.1 per cent; Dow +0.1 per cent; Nasdaq +0.1 per cent
Equities:
Hong Kong's Hang Seng -0.39 per cent
Shanghai composite index +0.64 per cent
Japan's Nikkei +0.85 per cent
London's FTSE 100 +0.17 per cent
Germany's DAX -0.15 per cent
France's CAC 40 -0.12 per cent
Stoxx 600 +0.05 per cent
Commodities:
WTI crude oil (Nymex Jly) +1.02 per cent at $58.58 (U.S.) a barrel
Gold (Comex Jun) +0.10 per cent at $1,207.90 (U.S.) an ounce
Copper (Comex Jul) -0.25 per cent at $2.83 (U.S.) a pound
Currencies:
Canadian dollar at 81.84 (U.S.), up 0.0007
U.S. dollar index +0.32 at 95.59
Bonds:
U.S. 10-year Treasury yield 2.26 per cent, -0.03
ECONOMIC DATA:
Canada wholesale trade for March rose 0.8 per cent from February, slightly below forecasts for a 0.9 per cent rise.
OTHER MARKET EVENTS:
(1030 a.m. ET) The U.S. Energy Information Administration releases its weekly petroleum inventory report.
(2 p.m. ET) U.S. Federal Open Market Committee minutes from April 28-29 meeting released.
STOCKS TO WATCH:
Lowe's reported Q1 EPS of 70 cents (U.S.) vs. Street estimates for 74 cents. The performance was a stark contrast to the performance of its rival, Home Depot Inc., with beat almost all projections Tuesday and raised its outlook for the year. Shares are down 7 per cent in the premarket.
Target reported Q1 adjusted EPS of $1.10 (U.S.) vs. a Street estimated $1.03. It matched revenue expectations.
Staples reported Q1 adjusted EPS of 17 cents, matching Street views.
Sears Canada reported a Q1 loss of 58 cents a share vs. a Street estimated loss of 44 cents.
Other earnings today include: American Eagle Outfitters Inc.; Bristow Grp Inc.; Eaton Vance Corp.; Hormel Foods Corp.; NetApp Inc.; Staples Inc.; Synopsys Inc.; Target Corp.; and Williams-Sonoma Inc.
Valeant Pharmaceuticals International is in talks to buy Egyptian drugmaker Amoun Pharmaceutical Co to expand its veterinary and human medicines portfolio, Bloomberg reported, citing people familiar with the matter. A sale could value Amoun at $700-million (U.S.) to $800-million, Bloomberg said.
Yahoo shares will be in focus after falling 7.6 per cent on Tuesday on concerns that a possible change in U.S. tax regulations would affect Yahoo's planned spinoff of its stake in Alibaba Group Holding. Yahoo is up about 2 per cent in the premarket.
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With files from wire services
Darcy Keith