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.
Here's the number you've been waiting for: U.S. payrolls rose just 74,000 in
December, miles below expectations of 200,000. There was an upside though, in
that the unemployment rate fell to 6.7 per cent from 7 per cent.
So far, the impact on markets is modest: Futures for the Dow Jones industrial
average were up about 60 points before the report was released at 8:30, and the
gains were reduced to 24 points after the release. They did briefly dip into the red before recovering. The yield on the 10-year Treasury
bond fell 7 basis points, and European stocks held onto impressive
gains.
Just as dismal employment growth implies that the economic
recovery might not be as strong as originally envisaged, it also suggests that
the Federal Reserve won't be in such a rush to wind down its bond-buying
stimulus. As well, there could be some mitigating factors at work here: December
was a bad month for weather. According to the report, 273,000 Americans missed
work because of wintry conditions.
The Canadian employment report was nothing to cheer about either, with the country actually shedding jobs last month instead of seeing growth. That has heightened expectations that interest rates could be cut, rather than raised, by the Bank of Canada - and the loonie has tumbled to a fresh four-year low and well below 92 cents now.
Here's a closer look at what's going on this morning and what is to come.
MARKETS:
Equities:
Futures: S&P 500 +0.26 per cent; Dow +0.19 per cent; Nasdaq +0.27 per cent; S&P Toronto +0.04 per cent
Hong Kong's Hang Seng +0.26 per cent
Shanghai composite index -0.72 per cent
Japan's Nikkei +0.20 per cent
London's FTSE 100 +0.98 per cent
Germany's DAX +0.92 per cent
France's CAC 40 +0.87 per cent
Commodities:
WTI crude oil (Nymex Feb) +1.05 per cent at $92.62 (U.S.) a barrel
Gold (Comex Feb) +0.32 per cent at $1,233.30 (U.S.) an ounce
Copper (Comex Mar) +0.35 per cent at $3.31 (U.S.) a pound
Currencies:
Canadian dollar at 91.58 (U.S.), vs. 92.15 at Thursday's North American close.
U.S. dollar index down 0.17 at 80.83
Bonds:
U.S. 10-year Treasury yield 2.89 per cent, down 0.08
ECONOMIC INDICATORS:
The U.S. created 74,000 jobs in December, way below Street expectations of about 200,000. The unemployment rate was sharply lower, at 6.7 per cent from November's 7.0 per cent, but that was before more people dropped out of the workforce.
Canada unexpectedly shed 45,900 jobs in December. Economists had expected job growth of 14,100. The unemployment rate unexpectedly rose to 7.2 per cent from 6.9 per cent.
STOCKS TO WATCH:
Target shares are down 1.6 per cent in the premarket after projecting fourth-quarter same-store sales were down 2.5 per cent, instead of earlier expectations of being flat. It also said up to 70 million customers' personal information were stolen in the recent credit card data theft, more than earlier expected.
Alcoa shares are down 6 per cent in the premarket after reporting fourth-quarter earnings that missed the Street view by 2 cents per share. It also said it will pay $384-million to settle corruption charges with the SEC and Department of Justice.
Shares of Sears holdings are down 13 per cent in the premarket after late Thursday revealing sales at its stores in the United States dropped 9.2 per cent during the nine-week period that ended Jan. 4. Watch for pressure in Sears Canada shares as well, as the parent company revealed sales in Canada slid 4.4 per cent.
A major Sherritt International shareholder says the company rejected its request to overhaul the board, setting the Canadian miner up for a nasty proxy fight.
ANALYST ACTIONS:
RBC Dominion Securities upgraded BlackBerry to a "sector perform" rating and raised its price target to $10 (U.S.) from $6.
Desjardins Securities raised its price target on Sandvine to $3.60 (Canadian) from $2.80 and maintained a "buy" rating.
Desjardins Securities hiked its price target on Gluskin Sheff to $29 (Canadian) from $27 and maintained a "hold" rating.
Goldman Sachs upgraded Target to "buy" from "neutral" and raised its price target to $72 (U.S.) from $71.
Barclays upgraded Microsoft to "overweight" from "equalweight" and raised its price target to $42 from $35.
Goldman Sachs upgraded Macy's to "buy" from "neutral" and raised its price target to $65 (U.S.) from $54.
Barclays upgraded Bristol-Myers Squibb to "overweight" from "equalweight" and raised its price target to $65 (U.S.) from $52.
Barclays downgraded Eli Lilly to "underweight" from "equalweight" and cut its price target to $51 (U.S.) from $58.
Barclays downgraded Johnson & Johnson to "equalweight" from "overweight" and maintained a $99 (U.S.) price target.
FBR Capital downgraded Las Vegas Sands to "market perform" from "outperform" but raised its price target to $85 (U.S.) from $80.
THIS MORNING'S TOP INVESTING LINKS:
BlackBerry's new CEO says smartphone keyboards are the future.
There is mounting evidence that the best days of the shale boom are over.
Highlights from Bill Gross's latest bond market outlook.
Short seller Carson Block says investors are kidding themselves if they think it's safe to flock back to U.S.-listed Chinese stocks just a few years after accounting scandals triggered a stampede for the exits.
The great rotation into stocks has largely already happened.
A look at bond valuations across the globe.
-----
For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities.
David Berman