Before the Bell: S&P 500 aims for record, gold plummets

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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.

Global markets this morning are cheering the Republican Party's success at retaking control of the Senate, with futures for the S&P 500 suggesting the index will flirt with fresh record highs when trading gets under way. New York crude oil prices are slightly firmer, natural gas is rallying, and gold prices are losing even more lustre this morning, down by roughly 2 per cent.

The Republicans now have full control of Congress, which markets are taking as a business-friendly result to Tuesday's mid-term elections. The party picked up at least seven more Senate seats, paving the way for Republican leader Mitch McConnell to set the legislative agenda for the next two years. While much is uncertain, there is hope that the election result will help ease the political gridlock in Washington.

The U.S. dollar jumped to a seven-year high against the Japanese yen after the election results. That's inflicting pain on the gold price this morning, pushing it to the weakest levels in four years. Rallying equity markets and subdued global inflation is keeping investors away from gold, which is also seeing relatively weak levels of physical demand even at much weaker prices. Holdings in the SPDR Gold Trust slid 0.3 per cent Tuesday to 738.8 tonnes, the lowest since September 2008 when Lehman Brothers Holdings collapsed

In overseas markets, Chinese stocks weakened modestly after HSBC released its purchasing managers' index for October for China's services sector, which weakened to 52.9 from 53.5 in September. It was the softest reading since July and followed mixed data on China's manufacturing sector earlier this week.

The S&P 500 closed Tuesday within 0.3 per cent of the record reached on Friday and is now up nearly 9 per cent for the year. But the TSX is far from hitting fresh all-time highs, weighed down by plummeting energy and mining shares, and there are few signals those trends will reverse in the near term. One development worth watching: according to Bloomberg, Saudi Oil Minister Ali Al-Naimi will attend a conference in fellow OPEC member Venezuela Thursday, which is preparing a proposal to defend the oil price for OPEC's Nov. 27 meeting.

There are plenty of fresh earnings reports out today, including from Tim Hortons, Magna International and Enbridge. Much more on those below.

MARKETS:

Futures:

S&P 500 +0.64 per cent; Dow +0.55 per cent; Nasdaq +0.70 per cent; S&P/TSX +0.53 per cent

Equities:

Hong Kong's Hang Seng -0.63 per cent

Shanghai composite index -0.48 per cent

Japan's Nikkei +0.44 per cent

London's FTSE 100 +0.91 per cent

Germany's DAX +1.24 per cent

France's CAC 40 +1.35 per cent

Stoxx 600 +1.25 per cent

Commodities:

WTI crude oil (Nymex Dec) +0.45 per cent at $77.54 (U.S.) a barrel

Natural gas (Nymex Jan) +2.96 per cent at $4.35 (U.S.)

Gold (Comex Dec) -1.89 per cent at $1,145.60 (U.S.) an ounce

Copper (Comex Dec) -1.42 per cent at $2.98 (U.S.) a pound

Currencies:

Canadian dollar at 87.31 (U.S.), down 0.0038

U.S. dollar index up 0.51 at 87.49

Bonds:

U.S. 10-year Treasury yield 2.36 per cent, up 0.02

ECONOMIC INDICATORS:

U.S. ADP National Employment for October showed 230,000 private-sector job gains, ahead of expectations for 219,000.

(10 a.m. ET) U.S. non-manufacturing ISM for October. It's forecast at 58.0.

STOCKS TO WATCH:

Eldorado Gold Corp., the largest foreign producer of the precious metal in China, is seeking a buyer for its mines in the country as part of a dual-track sale process, people with knowledge of the matter said, according to Bloomberg.

Tim Hortons reported Q3 adjusted EPS 95 cents (Canadian) vs. estimated 88 cents.

Enbridge reported Q3 adjusted EPS of 41 cents vs. the Street estimate of 38 cents. It said it's on track to meet its annual profit target.

Torstar missed earnings expectations, reporting an adjusted EPS of 6 cents versus expectations for 10 cents.

Magna International reported profit of $2.19 a share, up from $1.39 a year earlier. It trimmed the top end of its earnings outlook. RBC analysts said they expect a small positive reaction in Magna shares when they open today.

Time Warner reported Q3 adjusted EPS of $1.22 (U.S.) vs expectations for 94 cents.

Other earnings today include: ATS Automation; Calloway REIT; Chesapeake Energy; Calfrac Well; Canaccord Genuity; Essential Energy; Franco-Nevada; Genworth MI; Home Capital; Industrial Alliance, Intact Financial; Intertape Polymer; Kinross Gold; Hecla Mining; Kinross Gold; News Corp.; Manitoba Telecom; New Flyer Industries; North American Palladium; Penn West Petroleum; Sierra Wireless; Sun Life Financial; Sunoco; Sun Life;  RioCan REIT ; Tesla Motors; Toyota Motors; Trinidad Mining; Xtreme Drilling; Whole Foods Market; Zillow.

ANALYST ACTIONS:

Canaccord Genuity upgraded WestJet to "buy" from "hold" and hiked its price target to $35 (Canadian) from $34. But Raymond James downgraded its rating to "outperform" from "strong buy" and trimmed its target to $39 from $41.50.

Canaccord Genuity upgraded Linamar to "buy" from "hold" and hiked its price target to $69 (Canadian) from $61.

Canaccord Genuity upgraded Detour Gold to "buy" from "hold" and cut its price target to $11 (Canadian) from $12.

Industrial Alliance securities downgraded Aimia to "buy" from "strong buy" and cut its price target to $19.50 (Canadian) from $20.

RBC Dominion Securities upgraded Avigilon to "outperform" from "sector perform" with a price target of $24 (Canadian).

RBC Dominion Securities downgraded Bank of Nova Scotia to "sector perform" from "outperform" with a price target of $71 (Canadian).

TD Securities downgraded Bellatrix Exploration to "hold" from "buy" with a price target of $6 (Canadian).

FirstEnergy Capital upgraded Brookfield Renewable Energy Partners to "outperform" from "market perform" with a price target of $33 (U.S.).

Cormark Securities downgraded Mawson West to "market perform" from "speculative buy" with a price target of 20 cents (Canadian).

Raymond James downgraded Goodrich Petroleum to "outperform" from "strong buy" with a price target of $12 (U.S.).

THIS MORNING'S TOP INVESTING READS ON THE WEB:

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Have feedback on our daily Before the Bell report and suggestions on how to make it more useful in your investing day? Please contact Inside the Market Editor Darcy Keith at dakeith@globeandmail.com.