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Before the bell: Futures sharply higher after Crimea vote

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.

Stock futures this morning are suggesting a decidedly higher open for U.S. and Canadian markets, as global investors bet that the weekend vote in Crimea won't lead to serious ramifications in East-West relations. U.S. stock futures are up about 0.5 per cent.

The weekend referendum reportedly saw more than 95 per cent of Crimeans vote to break away from Ukraine and join Russia. But that was no surprise, and the pullback in markets last week suggested investors were already pricing in risks from the event prior to today.

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The U.S. and Western nations are expected to further discuss sanctions for Russia given that they deem the referendum illegal. That may include visa bans and freezing assets, and could come as early as today. But so far there hasn't been any response from the West suggesting a more serious reaction, and Russia - despite a buildup of its military forces along the Ukrainian border - hasn't made more moves against Ukraine. However, Russia's foreign ministry on Saturday said that the Kremlin is considering "requests for protecting civilians" in southeast Ukraine, where the Russian language is widely spoken.

Indeed, the situation in Ukraine and Russia remains tense, and markets could still react sharply to unfolding events.

The other big concern in markets this month - China's slowing economic growth rate - will continue to be a focus. On Saturday, the People's Bank of China announced a widening of the yuan trading band to 2 per cent from 1 per cent, meaning the currency will be allowed to trade 2 per cent above or below a midpoint fixed by the central bank. The action could lead to further depreciation in the currency.

Closer to home, U.S. industrial production last month rose more than expected, providing encouragement that recent weakness in U.S. economic data is mostly tied to the temporary factor of extreme winter weather conditions.

Now, here's a closer look at what's going on this morning and what is still to come.

MARKETS:

Equities:

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Futures: S&P 500 +0.6 per cent; Dow +0.6 per cent; Nasdaq +0.7 per cent; S&P Toronto +0.2 per cent

Hong Kong's Hang Seng -0.30 per cent

Shanghai composite index +0.98 per cent

Japan's Nikkei -0.35 per cent

London's FTSE 100 +0.35 per cent

Germany's DAX +0.59 per cent

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France's CAC 40 +0.51 per cent

Commodities:

WTI crude oil (Nymex Apr) -0.31 per cent at $98.25 (U.S.) a barrel

Gold (Comex Apr) +0.10 per cent at $1,380.30 (U.S.) an ounce

Copper (Comex May) +0.63 per cent at $2.97 (U.S.) a pound

Currencies:

Canadian dollar at 90.48 (U.S.), up 0.0045

U.S. dollar index up 0.04 at 79.49

Bonds:

U.S. 10-year Treasury yield 2.68 per cent, up 0.02

ECONOMIC INDICATORS:

Canada February existing home sales were up 0.3 per cent after dropping 3.3 per cent in January. From a year ago, sales were up 1.9 per cent, close to expectations. MLS prices were up 5.1 per cent from a year ago.

U.S. industrial production, forecast to rise 0.2 per cent after declining 0.3 per cent in January, came in +0.6 per cent in February. February capacity Utilization rose 0.3 on a percentage point to 78.8 per cent, above the consensus of 78.5 per cent.

(10 a.m. ET) U.S. National Association of Homebuilders releases its index for March, forecast to come in at 50, ahead of February's 46.

STOCKS TO WATCH:

Whitecap Resources announced it is buying oil and gas assets from Imperial Oil for $855-million. It also struck a financing deal of $500-million to fund the transaction, and raised both its dividend and forward guidance.

Encana may sell its huge Jonah natural-gas field in Wyoming to a pair of U.S. private-equity firms in a $2-billion (U.S.) deal as it seeks to refocus efforts on its richest prospects, according to a Wall Street Journal report.

Bombardier Inc. is one of four companies picked to supply a total of 1,064 locomotives to South Africa's state-owned freight rail system. Transnet Freight Rail says the total contract is worth about $5.16-billion (Canadian).

Yahoo shares are up 3 per cent in the premarket amid reports that Alibaba Group, of which Yahoo owns 24 per cent, may file for an initial public offering in the U.S. as soon as next month.

Earnings include: Churchill; Ensign Energy; Fortuna Silver Mines; Intrawest Resorts Holdings.

ANALYST ACTIONS:

Raymond James cuts target on Baylin Technologies to $5 (Canadian) from $9 and maintained an "outperform" rating.

Raymond James downgrades Tahoe Resources to "market perform" from "outperform" but hikes target to $26 (Canadian) from $23.

Desjardins Securities downgraded B2Gold to "hold" from "buy" on share price appreciation. Hikes target to $3.50 (Canadian) from $3.20.

M Partners cut its price target on Baylin Technologies to $9 (Canadian) from $12.50 but maintained a "buy" rating.

Goldman Sachs downgraded National-Oilwell Varco to "neutral" from "buy" and cut its price target to $85 (U.S.) from $90.

Goldman Sachs upgraded Baker Hughes to "buy" from "neutral" and raised its price target to $72 (U.S.) from $60.

Baird raised its price target on Tesla Motors to $275 (U.S.) from $245 and maintained an "outperform" rating.

Argus downgraded Facebook to "hold" from "buy" and removed its price target, which had been at $73 (U.S.). It cited the strong rise in its share price.

Goldman Sachs upgraded Patterson-UTI Energy to "conviction buy" from "buy" and raised its price target to $37 (U.S.) from $28.50.

THIS MORNING'S TOP INVESTING LINKS:

Valuable insight from pension funds about bonds and how they still play an important role in a portfolio.

The latest market insights from Warren Buffett.

Reasons for not betting against China right now.

U.S. employee turnover is near record lows, and that could be a disturbing sign for the economy.

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For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities.

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About the Author
Investment Editor

Darcy Keith is The Globe and Mail's Investment Editor. He has been a business journalist since 1992 and joined the Report on Business in 2010 from Yahoo! Canada, where he was the senior editor of finance. More

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