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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 have stabilized overnight but crude oil remains under pressure with WTI falling 0.2 per cent. The Hang Seng is up 0.9 per cent while the FTSE and Dax are mixed. U.S. index futures are up 0.1 per cent.

Earnings season continues today with more Canadian companies getting into the game.‎ So far today, Thomson Reuters and WestJet have come in well above expectations. Molson Coors beat the Street by a penny.

Manufacturing PMI reports for October from around the world have been coming out overnight, with the U.S. and Canada mid-morning. China did particularly well picking up from the neutral 50 to over 51 to show renewed upward momentum after months of sputtering, and ‎beating Street estimates. Sweden, Russia and India also did really well while the U.K. and Japan were in expansion territory but a touch below expectations. Greece's contraction accelerated again, an ongoing failure on the part of the EU to support its members and a potential flashpoint for future instability.

The good news from China has attracted new interest to stocks and commodity currencies like the Australian and New Zealand dollars. The Canadian dollar is up but lagging behind a bit due to the oil overhang. The loonie could be active this morning around Canadian August GDP and PMI reports with traders still looking for signs of the summer rebound the Bank of Canada had been hoping for.

Canada's economy expanded by 0.2 per cent in August from July, the third consecutive month of growth, on strength in mining, quarrying and oil and gas extraction, Statistics Canada said on Tuesday. The output of goods-producing industries grew by 0.7 per cent while service-producing industries posted no change.

Two central bank meetings have been moving currency markets as well. The Reserve Bank of Australia maintained interest rates and had a neutral not dovish outlook helping to support and Aussie dollar rebound.

The Bank of Japan maintained its negative rate and QQE‎ -- qualitative and quantitative easing --  but pushed out the target date for meeting its inflation target to fiscal 2018 from fiscal 2017. This suggested stimulus remains here to stay for longer even if not increased, a neutral-to-dovish stance that had the Japanese yen falling against the U.S. dollar,  euro and British pound overnight.

News that Mark Carney is likely to stick around as Governor of the Bank of England through mid-2019 to provide stability through the Brexit Article 50 process may also be helping to support Sterling today.

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 8:30 a.m. ET)

Dow +0.11 per cent; S&P 500 +0.18 per cent; Nasdaq: +0.13 per cent; TSX 60 +0.17 per cent

Equities
Japan's Nikkei +0.10 per cent
Shanghai composite index +0.69 per cent
Hong Kong's Hang Seng +0.93 per cent 
Germany's DAX -0.13 per cent
London's FTSE +0.09 per cent
France's CAC 40 -0.20 per cent

Commodities
WTI crude oil (Nymex Dec.) -0.19 per cent at $46.77 (U.S.) a barrel
Gold (Comex Dec.) +1.08 per cent at $1,286.80 (U.S.) an ounce
Copper (Comex Dec.) +0.00 per cent at $2.21 (U.S.) a pound

Currencies
Canadian dollar +0.22 at 74.73 cents (U.S.)
U.S. dollar index -0.29 at 98.14

Bonds
Canada 10-year bond yield +2.36 at 1.21 per cent

KEY ECONOMIC RELEASES

Japan manufacturing PMI; Bank of Japan monetary policy meeting
China manufacturing and non-manufacturing PMI

(8:30 a.m. ET) Canada real GDP at basic prices for August. Consensus is an increase of 0.2 per cent from July.
(9:30 a.m. ET) Canada Markit Manufacturing PMI for October.
(10 a.m. ET) U.S. manufacturing ISM for October. Consensus is 51.7, up from 51.5 in September.
(10 a.m. ET) U.S. construction spending for September. Consensus is an increase of 0.5 per cent from August.
(11:45 a.m. ET) Bank of Canada governor Stephen Poloz speaks in Vancouver to the Business Council of British Columbia with a press conference to follow at 1:15 p.m.
(3:20 p.m. ET) Canada Federal Fiscal and Economic Update

Also: Canada auto sales for October; U.S. Ward's Total Vehicle Sales

KEY STOCKS TO WATCH

See also: Tuesday's small-cap stocks to watch

Corn Flakes maker Kellogg Co. reported a better-than-expected quarterly profit, helped by cost-cutting and lower cost of goods sold, but sales fell for the seventh straight quarter. Excluding items, the company earned 96 cents per share, beating the average analyst estimate of 87 cents per share, according to Thomson Reuters I/B/E/S. Its shares were up 2.15 per cent in premarket trading.

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Yum China Holdings, the former China unit of Yum Brands, will begin trading today on the New York Stock Exchange under the ticker "YUMC" following its separation from Yum.

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Handbag maker Coach matched estimates with adjusted quarterly profit of 45 cents per share. Revenue came in below forecasts. But Coach maintained its prior full-year forecast. Its shares were up 0.6 per cent in premarket trading.

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Grain processor Archer Daniels Midland beat estimates by 13 cents a share, with adjusted quarterly profit of 59 cents per share. Revenue fell short of Street forecasts.  Its shares were up 4.6 per cent in premarket trading.

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Occidental Petroleum lost 15 cents per share for its latest quarter, but revenue came in above estimates.

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Dow component Pfizer was down 2.2 percent at $31 in premarket trading after the drugmaker's quarterly profit fell below expectations.

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Valeant Pharmaceuticals' U.S.-listed shares rose 3.9 percent to $18.55 after Bloomberg reported that the drugmaker's former chief executive and chief financial officer were at the center of a U.S. criminal probe.

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Tenet Healthcare fell 4.6 percent to $18.80 after the hospital operator reported a lower-than-expected adjusted quarterly profit.

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WestJet Airlines Ltd. reported a better-than-expected quarterly profit as it flew more passengers and expenses fell. WestJet's net earnings rose to $116-million, or 97 cents per share, in the third quarter ended Sept. 30, from $101.80-million, or 82 cents per share, a year earlier. Analysts on average had expected a profit of 94 cents per share, according to Thomson Reuters I/B/E/S.

**

Thomson Reuters Corp. said on Tuesday it would eliminate about 2,000 jobs worldwide and take a fourth-quarter charge of $200-million to $250-million to streamline its business. The company also reported slightly lower third-quarter net earnings. Net income was $286-million or 36 cents per share, compared with $293-million or 36 cents per share, a year earlier. Excluding special items, earnings were 54 cents per share. Analysts on average were expecting 47 cents, according to Thomson Reuters I/B/E/S/.

**

Ford Motor Co. and the union representing its workers in Canada reached a last-minute agreement on a new contract, averting a strike. The auto maker agreed to terms of a contract that Unifor signed earlier after negotiations with General Motors Co. and Fiat Chrysler Automobiles NV. Ford shares were up 0.34 per cent in premarket trading.

**

Royal Dutch Shell Plc reported third-quarter profit that beat analyst estimates after its acquisition of BG Group Plc boosted oil production, helping to counter a slump in prices. The shares rose. Profit adjusted for one-time items and inventory changes advanced 17 percent from a year earlier to $2.79 billion, Shell said Tuesday. That exceeded the $1.79 billion average estimate of analysts surveyed by Bloomberg. Its shares were up 4.12 per cent in premarket trading.

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Earnings include: 5N Plus Inc.; Aecon Group Inc.; Alleghany Corp.; American Electric Power Company Inc.; Ametek Inc.; BP PLC; Canaccord Genuity Group Inc.; CanWel Building Materials Group Ltd.; Cardinal Energy Ltd.; Cerner Corp.; Coach Inc.; Cummins Inc.; Detour Gold Corp.; Devon Energy Corp.; DIRTT Environmental Solutions Ltd.; Diamondback Energy Inc.; Eaton Corporation PLC; Ecolab Inc.; Edison International; Electronic Arts Inc.; Electronic Arts Inc.; Etsy Inc.; Genesee & Wyoming Inc.; Gibson Energy Inc.; Gilead Sciences Inc.; Harris Corp.; Herbalife Ltd.; Horizon North Logistics Inc.; Illumina Inc.; Indigo Books and Music Inc.; Kellogg Co.; LyondellBasell Industries N.V.; MacDonald Dettwiler and Associates Ltd.; Molson Coors Brewing Co.; Mosaic Co.; Newfield Exploration Co.; Noble Energy Inc.; North American Energy Partners Inc.; Occidental Petroleum Corp.; Pfizer Inc.; Pioneer Natural Resources Co.; Pitney Bowes Inc.; PPL Corp.; Royal Dutch Shell PLC; Sleep Country Canada Holdings Inc.; Square Inc.; Thomson Reuters Corp.; United States Steel Corp.; Veresen Inc.; Wajax Corp.; WestJet Airlines Ltd.; Xylem Inc.

With files from wire services

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