U.S. and Canadian stock markets appear headed for a higher opening this morning, as investors digest an avalanche of big-cap corporate earnings reports and take in favourable readings on the European economy.
S&P 500 heavyweight Apple Inc. reported earnings after the closing bell on Tuesday that beat analysts estimates, thanks to surprisingly strong sales of the iPhone. Shares are up about nearly 5 per cent in the premarket.
So far, it's been a favourable second-quarter earnings season overall, with 72 per cent of firms that have posted quarterly results prior to today beating analysts's profit estimates. But similar to the first quarter, revenues have been less impressive, with only 54 per cent of companies topping Street views, according to Bloomberg.
We detail the key earnings out today in our stocks to watch section below, which includes a handful of Canada's largest corporations.
Overnight, Chinese stocks came under pressure after the HSBC preliminary manufacturing purchasing managers' index slid to 47.7 in July - an 11-month low - from a final reading of 48.2 in June.
But similar manufacturing readings in France, Germany and the euro zone were more positive, with all of them coming in slightly better than expected. The euro-zone index, for instance, rose to an 18-month high of 50.4 in July from 48.7 in June. The reading above 50 signifies expansion. The U.S. releases its reading just ahead of the opening bell this morning.
Now, here's a closer look at what's going on and what's to come later today.
MARKETS:
Equities:
Futures: S&P 500 +0.29 per cent; Dow +0.18 per cent; Nasdaq +0.87 per cent; TSX +0.22 per cent
Hong Kong's Hang Seng +0.24 per cent
Shanghai composite index -0.53 per cent
Japan's Nikkei -0.32 per cent
London's FTSE 100 +0.83 per cent
Germany's DAX +0.97 per cent
France's CAC 40 +1.07 per cent
Commodities:
WTI crude oil (Nymex Sep) unchanged at $107,22 (U.S.) a barrel
Gold (Comex Dec) +0.6 per cent at $1,344.30 (U.S.) an ounce
Copper (Comex Sep) +0.9 per cent at $3.23 (U.S.) a pound
Currencies:
Canadian dollar at 97.27 (U.S.), versus 97.23 at Tuesday's North American close.
U.S. dollar index up 0.09 at 82.03
Bonds:
U.S. 10-year Treasury yield 2.52 per cent, up 0.02
ECONOMIC INDICATORS TO WATCH:
(858 a.m. ET) The final Market PMI manufacturing index for July is released, forecast to come in at 52.8.
(10 a.m. ET) U.S. Commerce Department reports new homes sales for June. Economists expect a 1 per cent increase over May.
STOCKS TO WATCH:
Encana Corp. reported second-quarter operating earnings of 34 cents per share, up from 27 cents a year earlier and beating Street forecasts for 19 cents. Shares are up 1.3 per cent in the U.S. premarket.
Rogers Communications reported adjusted earnings per share of 96 cents on revenue of $497-million.
Loblaw Companies Ltd. said net earnings were 63 cents a share, about 5 cents better than consensus forecasts. Revenue rose 2 per cent from a year earlier to $7.5-billion.
Canadian Pacific Railway reported second-quarter earnings per share of $1.43 on $1.5-billion in revenue as it maintained its financial guidance for the year from January. Analysts were expecting EPS of $1.50.
Apple shares are up 4.8 per cent in the premarket after beating earnings expectations in its second-quarter results late Tuesday.
Dell Inc. said founder Michael Dell and private equity partner Silver Lake raised their buyout offer for the PC maker by 10 cents (U.S.) per share to $13.75. Dell shares are up 2 per cent in the premarket.
Boeing reported second-quarter results of $1.67 a share, beating the $1.58 estimate. Backlog in orders grew to $410-billion, and it raised its earnings per share guidance. Shares are up 1.5 per cent in the premarket.
Caterpillar Inc. reported second-quarter earnings per share of $1.45, missing Street forecasts for $1.71. It cut its fiscal year 2013 earnings per share forecast to $6.50 from $7. Shares are down 1 per cent in the premarket.
Ford Motor Co. reported a pretax profit of 45 cents per share, beating the Street forecast for 37 cents. Shares are up 3 per cent in the premarket.
PepsiCo Inc reported profit, excluding special items, of $1.31 a share, beating the Street forecast for $1.19. Shares are up 1.7 per cent in the premarket.
Other earnings today include: Agnico Eagle Mines Ltd.; AOL Inc.; Baidu Inc. ADS; Canadian Pacific Railway Ltd.; Cenovus Energy Inc.; Cheesecake Factory Inc.; Dr Pepper Snapple Grp Inc.; Eli Lilly & Co.; Facebook Inc.;General Dynamics Corp.; GlaxoSmithKline PLC ADS; Loblaw Co.; Lundin Mining; Methanex Corp.; Moody's Corp.; Motorola Solutions Inc.; NASDAQ OMX Group Inc.; Qualcomm Inc.; Reynolds American Inc.; Sierra Wireless Inc.; and Visa Inc.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
Uncool or not, Apple is still a bellwether.
Humans are proving more adept than computers in reacting to the Federal Reserve's mixed messages on when policy makers will reduce their unprecedented stimulus.
A look at Warren Buffett's long-term stock picks.
Lumber prices are on an upswing.
The perils of picking past winners.
Talk about your micro ETF: Now there's an exchange traded fund to let you invest in Nashville.
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The premarket report is constantly updated to reflect the latest news developments and market moves. For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities. You can also be notified using our dashboard feature when new articles appear from this author. Read more on using this feature here.
Darcy Keith