The Before the Bell report is constantly updated to reflect the latest news developments and market moves in the premarket. Check back later for updates.
Major U.S. stock indexes are set to push higher into record territory at the open and the TSX should hit its highest level in more than two years, as traders continue to rejoice over the Federal Reserve's decision Wednesday to keep its $85-billion monthly bond buying program untouched for now.
Gold and silver futures are skyrocketing this morning in New York, with the December contracts for the metals up 4 per cent and 7 per cent, respectively. But those moves are based on closing settlement prices in New York Wednesday, which came before the Fed announcement. Spot gold, a better indication of how bullion is doing today, is still extending gains, up about $5 at $1371 an ounce.
The Fed stunned some market observers by refraining from any "tapering" of its extraordinary stimulus measures, commenting that it wants to see more evidence of an economic recovery before adjusting the pace of its bond purchases. U.S. jobless claims this morning provided a hint that the unemployment problem in the country is continuing to ease a bit, with new claims less than the Street expected.
The Fed slightly reduced its GDP growth projections for 2013 and 2014, but was somewhat more optimistic on the unemployment and inflation targets than the committee had been in its June projections. While that could set the stage for the "tapering" process to begin at the next Federal Reserve Open Market Committee meeting in October, that's unlikely given the risks presented by U.S. budget talks and a showdown on the debt ceiling next month. That could mean markets may continue to have uninterrupted stimulus until December - and maybe even into early next year.
All this has added up to a fantastic September so far for stock returns, defying seasonality trends that clearly point to a weak month. With the conflict in Syria no longer an immediate risk for markets, the focus turns to budgetary negotiations in Washington as the next potential hurdle for the powerful market rally of this year to overcome.
Asian and European markets rallied overnight in reaction to the Fed news, and metals this morning continue to climb higher. Emerging markets did particularly well, not surprising given they had sold off sharply in recent weeks on fears their economies could get hit hard by less stimulative Fed policy. Indonesian equities were up over 7 per cent at one point, and closed up 4.7 per cent, the most in almost two years. Turkey's stock market was up by 5 per cent and India's Sensex rose 3.4 per cent. The MSCI Emerging Markets index jumped 2.3 per cent, which has left this year's decline to only 3 per cent.
For the TSX, investors should be treated to a continuation of what was seen late Wednesday, with metals stocks rallying and income-producing securities likely doing well, including real estate investment trusts, as bond yields this morning hold close to the sharply lower levels seen Wednesday after the Fed news. The U.S. dollar is also continuing to soften a bit.
Now, here's a closer look at what's going on this morning and what's to come.
MARKETS:
Equities:
Futures: S&P 500 +0.3 per cent; Dow +0.1 per cent; Nasdaq +0.3 per cent; S&P Toronto +0.2 per cent
Hong Kong's Hang Seng +1.67 per cent
Shanghai composite index +0.29 per cent
Japan's Nikkei +1.80 per cent
London's FTSE 100 +1.44 per cent
Germany's DAX +1.12 per cent
France's CAC 40 +1.07 per cent
Commodities:
WTI crude oil (Nymex Nov) +0.51 per cent at $107.83 (U.S.) a barrel
Gold (Comex Dec) +4.36 per cent at $1,364.50 (U.S.) an ounce
Silver (Comex Dec) +7.24 per cent at $23.13 (U.S.) an ounce.
Copper (Comex Dec) +1.77 per cent at $3.34 (U.S.) a pound
Currencies:
Canadian dollar at 98.08 (U.S.), up 0.0028 from yesterday's North American close.
U.S. dollar index down 0.12 at 80.11
Bonds:
U.S. 10-year Treasury yield 2.71 per cent, up 0.02
ECONOMIC INDICATORS TO WATCH:
Canada July wholesale trade rose 1.5 per cent from August
U.S. jobless claims rose 15,000 to 309,000 last week; economists' survey was for 341,000.
The U.S. second-quarter current account deficit was $98.89-billion, more than the $97.0-billion that was forecast.
(10 a.m. ET) U.S. releases existing home sales for August, forecast to fall to 5.255 million when annualized from July's 5.390 million.
(10 a.m. ET) U.S. releases the Philadelphia Fed Survey for September.
STOCKS TO WATCH:
Oracle Corp. shares should come under pressure after the software giant's sales fell below expecations in its fiscal first quarter and it gave a disappointing outlook.
Earnings today include ConAgra Foods Inc. and Rite Aid Corp.
ANALYST ACTIONS:
Macquarie upgraded Rogers Communications Inc. to "outperform" from "neutral."
Deutsche Bank raised its target on Tesla Motors Inc. to $200 (U.S.) from $160.
Stifel Nicolaus upgraded Groupon to "buy" from "hold."
Morgan Stanley downgraded Walt Disney to "equalweight" from "overweight."
Morgan Stanley upgraded Time Warner to "overweight" from "equalweight."
Raymond James initiated coverage on Coeur Mining Inc. with an "outperform" rating and $18 (U.S.) price target.
Canaccord Genuity added Fiera Capital Corp. to its Canadian focus list - its best investment ideas - and raised its price target to $15.25 (Canadian) from $14.25.
Canaccord Genuity raised its price target on Fluor Corp. to $80 (U.S.) from $74 and reiterated its "buy" rating.
Goldman Sachs downgraded FedEx to "neutral" from "buy" with a target of $116 (U.S.), up from $112.
Goldman Sachs downgraded Boise Inc. to "neutral" from "buy" but raised its price target to $13 (U.S.) from $10.50.
Goldman Sachs downgraded Dr. Pepper Snapple to "sell" from "neutral" and cut its price target to $46 from $48.
Credit Suisse initiated coverage on Cisco with an "underperform" rating and $21 price target.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
Google is starting a new company to monetize life extension.
Notes from the 2013 Value Investing Congress in New York.
A billionaire investor in Berkshire Hathaway has been found with more shares in the company than Bill Gates.
The U.S. bond market is on track for its worst year in four decades.
Seasonality followers beware: The next few weeks have been especially tough for markets.
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For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities.
Darcy Keith