Colin Cieszynski
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 overseas have been rallying overnight and into this morning. The FTSE is leading the pack rallying 1.8 per cent while the Dax is up 0.5 per cent on its return to trading and the Nikkei rose 0.8 per cent. U.S. index futures are up 0.1 per cent. Crude oil contracts are down 0.9 per cent in normal trading corrections with Brent still above $50 (U.S.) and West Texas Intermediate still above $48.
U.K. markets remain in focus today. Cable -- the pound versus the U.S. dollar -- has broken $1.28 to a new low following reports that the U.K. government may not seek special protection for The City (the U.K. financial sector) in Brexit talks. Meanwhile, the positive benefits of the lower pound continue to shine through as U.K. Construction PMI moved back above 50 into expansion territory and beat the Street.
There hasn't been any news related to Deutsche Bank's financial woes or the potential size of its big U.S. fine. Gold continues to trend lower this morning, however, indicating that the street does not expect either Brexit or European bank capital to spiral into a global financial crisis.
The U.S. dollar is trading higher today relative to most majors including the euro, yen, pound and Canadian dollar. Monday's U.S. economic reports were mixed with manufacturing PMI beating the Street and construction spending staging a surprise drop. The next big data points for the U.S. are ADP payrolls on Wednesday and non-farm payrolls on Friday.
The Vice Presidential debate being held tonight is usually a snoozer but could be somewhat significant for trading in the Mexican peso today in light of the close contest and U.S.-Mexican relations a core campaign wedge issue. North of the border the Blue Jays do-or-die playoff game tonight is likely and deservedly going to attract far more attention.
Now, here is a closer look at what's going on this morning and what is still to come.
MARKET DATA:
Futures (as of about 8:50 a.m. ET)
Dow +0.03 per cent; S&P 500 +0.02 per cent; Nasdaq: +0.11 per cent; TSX 60 +0.09 per cent
Equities
Japan's Nikkei +0.83 per cent
Shanghai composite index +0.23 per cent
Hong Kong's Hang Seng +0.45 per cent
Germany's DAX +0.63 per cent
London's FTSE +1.71 per cent
France's CAC 40 +1.05 per cent
Commodities
WTI crude oil (Nymex Nov.) -0.92 per cent at $48.36 (U.S.) a barrel
Gold (Comex Dec.) -0.11 per cent at $1,311.30 (U.S.) an ounce
Copper (Comex Dec.) -0.68 per cent at $2.18 (U.S.) a pound
Currencies
Canadian dollar -0.23 at 75.95 cents (U.S.)
U.S. dollar index +0.55 at 96.21
Bonds
Canada 10-year bond yield -1.13 at 0.9962 per cent
KEY ECONOMIC RELEASES
Japan consumer confidence
Euro Area producer price index
KEY STOCKS TO WATCH
Penn West Petroleum Ltd. has named David French of Bankers Petroleum to be its new president and chief executive officer and a member of its board of directors effective Oct. 24. He will succeed David Roberts, who has been Penn West's president and CEO since June 2013.
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Darden shares rose 5.5 per cent to $64.75 in premarket trading after the restaurant chain owner reported a rise in first-quarter sales, boosted by climbing same-store sales at its Olive Garden restaurant chain. Darden also raised its earnings forecast for the year.
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Pandora rose 4.2 per cent after Goldman Sachs added the stock to its "conviction list" and raised its price target.
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GrubHub fell 2.1 per cent to $41.79 after Stifel downgraded the stock to "hold".
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Ericsson says it's laying off 3,000 workers in Sweden and downsizing operations as part of its global plan to cut costs by 9 billion kronor ($1 billion) in 2017. The Swedish networks company says the job cuts will be in research and development, sales and administration. It employs 16,000 people in Sweden. The company said "technology shifts" were behind the layoffs.
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A Securities and Exchange Commission filing showed that Cypress Semiconductor adopted a restructuring plan on Sept. 27. Cypress expects to cut about 500 jobs, or about 8 per cent of its total work force.
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Missouri-based Aegion posted mixed quarterly results, with second-quarter adjusted earnings per share beating consensus by 1 cent a share. Sales missed estimates, however.
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Salesforce entered an agreement to buy Krux, a San Francisco-based software start-up, for about $700-million in cash and stock, The Wall Street Journal first reported. Salesforce shares were up marginally before the bell.
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Texas-based electric company Dynegy named Martin Daley its new chief operating officer as it gets set to close the takeover of French utility firm ENGIE.
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Transocean shares rebounded 2 percent in premarket trading, a day after falling 7.6 percent following the announcement that the company had lost its contract for Discover India, an ultra-deepwater drillship. The contract was originally scheduled to end January 2021.
Also see: Tuesday's small cap stocks to watch
Earnings include: Darden Restaurants Inc.; NovaGold Resources Inc.; Theratechnologies Inc.
With files from wire services