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Inside the Market Before the bell: Stocks claw back, loonie dives on jobs data

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.

European markets today are having success at recovering some of Thursday's losses, while North American stock futures are pushing higher - although they are off their highs from earlier this morning. The Canadian dollar made a sudden move lower against the greenback, as jobs data for June came in much weaker than Street forecasts.

S&P 500 futures are up about 0.1 per cent, after earlier seeing a 0.3 per cent lift. Futures for the S&P/TSX are nearly flat, as most major commodities are tracking lower, keeping a lid on advances from the resource-heavy index.

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The Canadian dollar is trading at 93.55 cents (U.S.), down nearly half a cent from where it was trading at prior to the 830 a.m. (ET) jobs data that showed a net loss of 9,400 jobs in June from May. Economists had forecast 20,000 net new jobs. The unemployment rate unexpectedly went up one notch to 7.1 per cent, and year over year, Canada added only 72,300 jobs, the slowest annual rate of jobs growth in over four years.

Global equity markets are much calmer this morning than 24 hours ago, when investors started fretting that the financial woes of Portugal's Banco Espirito Santo SA could spiral into a Western European banking crisis. Banco Espirito Santo resumed trading today after being suspended Thursday, and are trading down just 3.9 per cent. A parent company of the bank failed to make some short-term debt payments this week after being embroiled in accounting irregularities in recent weeks. Portugal's PSI 20 index is up 2.2 per cent, and bond prices in the region are higher this morning.

Many observers, including analysts at Goldman Sachs Group, suggest there is little risk that the financial troubles of the Espirito Santo Group will have systemic implications for the euro area. After all, Portuguese bank assets only represent 1.6 per cent of the region's total and foreign banks' exposure to the country is minimal. There's also the reassurance that the European Central Bank would step in and support all banks.

But investors, faced with equity valuations that are looking lofty as stocks challenge all-time highs in many global markets and corporate earnings for the second quarter arrive, are nervously looking for reasons to take profits.

There could be a little more light shed on another issue that's a key focus of markets right now: the timing of the Federal Reserve's first interest rate hike. Three Fed officials will be speaking at various events today: Philadelphia Fed President Charles Plosser, Chicago Fed president Charles Evans, and Atlanta Fed Bank president Dennis Lockhart. The hawkish Mr. Plosser is a voting member of the Fed's policy committee, and had said last month that the federal funds rate should be raised starting in the third quarter, as the central bank is nearing its economic targets faster than many expected.

Few believe such a Fed move will happen this year, but many traders are bringing forward their projections on when the first interest rate hike since before the financial crisis will arrive, with the majority now expecting a move by September of 2015.

Meanwhile, watch for some action in the Canadian dollar and bond markets later this morning as domestic jobs figures are released for June.

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

MARKETS:

Equities:

Futures: S&P 500 +0.16 per cent; Dow +0.15 per cent; Nasdaq +0.30 per cent; S&P/TSX +0.07 per cent

Hong Kong's Hang Seng -0.03 per cent

Shanghai composite index +0.42 per cent

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Japan's Nikkei -0.34 per cent

London's FTSE 100 +0.22 per cent

Germany's DAX +0.07 per cent

France's CAC 40 +0.46 per cent

Commodities:

WTI crude oil (Nymex Sep) -0.41 per cent at $101.98 (U.S.) a barrel

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Gold (Comex Aug) -0.10 per cent at $1,337.90 (U.S.) an ounce

Copper (Comex Sep) -0.28 per cent at $3.26 (U.S.) a pound

Currencies:

Canadian dollar at 93.59 (U.S.), up 0.0014

U.S. dollar index down 0.02 at 80.10

Bonds:

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U.S. 10-year Treasury yield 2.53 per cent, down 0.009

ECONOMIC INDICATORS:

Canada saw a net loss of 9,400 jobs in June from May. Economists had forecast 20,000 net new jobs. The unemployment rate went up one notch to 7.1 per cent, and year over year, Canada added only 72,300 jobs, the slowest annual rate of jobs growth in over four years. A surge of hiring in the construction sector offset by the biggest decline in part-time jobs in nearly two years

STOCKS TO WATCH:

Wells Fargo reported Q2 EPS of $1.01 (U.S.), matching Street forecasts. Revenue was a touch higher than expected. Shares are down 0.2 per cent in the premarket.

ANALYST ACTIONS:

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Merrill Lynch downgraded Teck Resources to "underperform" from "neutral" and cut its price target to $21 (U.S.) from $22.

Desjardins Securities downgraded Saputo to "hold" from "buy" on share price appreciation and kept a $64 (Canadian) price target.

RBC Dominion Securities downgraded OpenText to "sector perform" from "outperform" with a price target of $55 (U.S.).

RBC Dominion Securities upgraded Sandvine to "outperform" from "sector perform" and hiked its price target to $4.60 (Canadian) $4.

Credit Suisse started coverage on CGI Group with an "outperform" and price target price of $48 (Canadian).

Desjardins Securities upgraded Parex Resources to "top pick" from "buy" and hiked its price target to $17 (Canadian) from $14.

TD Securities started coverage on Linamar with a "hold" rating and a price target of $73 (Canadian).

Canaccord Genuity started coverage on Great Prairie Energy Services with buy rating and 70 cents (Canadian) price target.

RBC Dominion Securities started coverage on Canexus with an "outperform" rating and $6 (Canadian) price target.

Wells Fargo downgraded Procter & Gamble to "market perform" from "outperform" and cut its price target range to $85-87 (U.S.) from $88-90.

Canaccord Genuity hiked its price target on Apple to $112 (U.S.) from $102 and maintained a "buy" rating.

THIS MORNING'S TOP INVESTING LINKS:

A close examination of the Vanguard FTSE All-World ex-Canada index.

What to do when valuations are high.

Tips on what to do if you think the correction has started.

Successful technical analysis is easier believed than achieved.

Why emerging markets stocks are still a lousy investment.

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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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