Colin Cieszynski
The Before the Bell report is compiled by editors of The Globe and Mail and is updated throughout the morning to reflect latest developments. Colin Cieszynski, Chartered Financial Analyst and Chartered Market Technician, is chief market strategist with CMC Markets.
March came in like a lion for stocks and appears to be going out like a lamb with most major markets around the world in decline Friday. U.S. index futures are down 0.2 per cent, the Dax is down 0.05 per cent, the FTSE is down 0.5 per cent while the Nikkei and Hang Seng fell 0.8 per cent. Copper is down 0.5 per cent while crude oil is down 0.3 per cent. In currency markets, the U.S. dollar is up slightly against pretty much everything except gold. U.S. stock index futures were slightly lower on Friday as investors prepared to lock in gains, with Wall Street set for its best first quarter in four years.
There has been a flood of economic data overnight and results have been mixed. China manufacturing and service purchasing managers' index (PMI) was better than expected. Japanese household spending fell dramatically while industrial production was better than expected. In Europe, declines in German and Spanish retail sales were offset by a stronger than expected German employment report.
Brexit remains in the spotlight with the European Union's response to Article 50 in focus. Reports indicate the EU wants to settle the bill on divorce terms first before negotiating a new trade arrangement, while the U.K. has been pushing to do both at the same time. The EU is expected to hold a summit in late April to decide on its negotiating stance with talks expected to start in the second half of May. Expect to see more overtures, threats, speculation and trial balloons disguised as leaks in the coming weeks.
It's the last day of the week, month, quarter and fiscal year for many financial companies so we could see position adjustments and trading swings in both directions through the day. There are more Fed speakers due and traders may digest U.S. President Donald Trump's initial draft outline of what the U.S. wants to get out of renegotiating NAFTA. There is more economic news on the way which could move markets including Canada monthly gross domestic product for January, U.S. monthly core personal consumption expenditure (PCE) inflation (an indicator the Fed uses) and Chicago PMI, another prelude to the manufacturing PMI due from around the world Sunday night and Monday morning.
Now, here is a closer look at key market data, and corporate and economic news.
MARKET DATA:
Futures (as of about 7:30 a.m. ET)
Dow -0.14 per cent; S&P 500 -0.21 per cent; Nasdaq: -0.14 per cent; TSX 60 -0.20 per cent
Equities
Japan's Nikkei -0.81 per cent
Shanghai composite index +0.39 per cent
Hong Kong's Hang Seng -0.78 per cent
Germany's DAX -0.03 per cent
London's FTSE -0.48 per cent
France's CAC 40 -0.19 per cent
Commodities
WTI crude oil (Nymex May) -0.34 per cent at $50.18 (U.S.) a barrel
Gold (Comex June) -0.26 per cent at $1,244.70 (U.S.) an ounce
Copper (Comex May) -0.34 per cent at $2.66 (U.S.) a pound
Currencies
Canadian dollar +0.01 at 74.93 cents (U.S.)
U.S. dollar index +0.14 at 99.96
Bonds
Canada 10-year bond yield +0.07 at 1.62 per cent
KEY ECONOMIC RELEASES
Japan CPI, industrial production, household spending and jobs
China PMI
Euro Area CPI
Germany retail sales and unemployment
(8:30 a.m. ET) Canada real GDP at basic prices for January. The consensus estimate is an increase of 0.3 per cent from December.
The Canadian economy expanded by 0.6 percent in January from December, more than expected, on widespread growth in goods- and service-producing industries, Statistics Canada data indicated on Friday. The increase, the seventh in the past eight months, was greater than the 0.3 percent advance forecast by analysts in a Reuters poll. The month-on-month expansion was the biggest since the 0.6 percent in June. The strong start to the year signals that first-quarter annualized growth could exceed the 2.5 percent that the Bank of Canada forecast in January. Manufacturing in January grew 1.9 percent on strength in virtually every sector, while mining, quarrying, and oil and gas extraction also increased by 1.9 percent. Wholesale trade advanced by 2.4 percent, the largest monthly gain since July 2013, on higher imports and exports of motor vehicles and parts. Retail sales grew by 1.5 percent.
**
(8:30 a.m. ET) Canada Survey of Employment, Payrolls, and Hours for January.
**
(8:30 a.m. ET) U.S. personal spending and personal income for February. The consensus projections are increases of 0.2 per cent and 0.4 per cent, respectively, from January.
U.S. consumers increased their spending at the weakest pace in six months, while the 12-month rise in consumer prices was the largest in nearly five years. The Commerce Department says consumer spending edged up a tiny 0.1 per cent in February following a 0.2 per cent increase in January. The small gain supports the view of many economists that overall economic growth probably slowed in the first quarter. Incomes, however, were up a solid 0.4 per cent in February, offering hope for stronger consumer spending in coming quarters. Meanwhile, an inflation gauge closely watched by the Federal Reserve increased 2.1 per cent in February compared to a year ago. It is the sharpest 12-month rise since March 2012 and slightly above the Fed's 2 per cent inflation target.
**
(8:30 a.m. ET) U.S. core PCE price index for February. Consensus is an increase of 0.2 per cent from January and 1.7 per cent year over year.
(10 a.m. ET) U.S. University of Michigan consumer sentiment for March. Consensus is 97.6, up from 96.3 in February.
KEY STOCKS TO WATCH
Also see: Friday's small-cap stocks to watch
**
BlackBerry Ltd. shares are up about 7 per cent in premarket action after it posted a narrower fourth-quarter loss. BlackBerry said its quarterly loss narrowed to $47-million (U.S.) or 9 cents a share, basic, from $238-million or 45 cents a year earlier.
**
David Baazov, the founder and former chief executive of Amaya Inc. has sold about two-thirds of his remaining shares in the Montreal-based owner of PokerStars, for a total of $267.7-million. Prior to this week's sales, Baazov owned about 17.6 million Amaya shares – or 12 per cent of its common stock. That drops to 3.8 per cent of Amaya's shares following this week's transactions, which were disclosed late Thursday.
**
Shares of DuPont were up 0.6 per cent at $82.11 in premarket trading after the company said it would sell its crop protection business to FMC Corp and buy FMC's health and nutrition unit in a deal that will give DuPont about $1.6-billion.
**
French food group Danone said on Friday it would sell its U.S. organic yogurt business Stonyfield to facilitate the rapid completion of its $10.4-billion acquisition of U.S. organic food producer WhiteWave foods Co. The decision to sell Stonyfield stemmed from an agreement in principle reached with the U.S. Department of Justice's anti-trust department, Danone said in a statement.
**
U.S. private equity firm Silver Lake Partners LP and U.S. chipmaker Broadcom Ltd. have offered Toshiba Corp. about $17.9-billion (U.S.) for its chip unit, the Nikkei business daily reported on Friday. Broadcom's shares were down nearly 1 per cent in premarket trading.
**
A federal judge on Thursday said Wells Fargo & Co. must face litigation seeking to hold it responsible for billions of dollars of claimed investor losses stemming from its alleged failures as a trustee overseeing risky residential mortgage-backed securities.
**
Corning was downgraded to "neutral" from "buy" at Citi. Corning's shares slipped nearly 1 per cent in premarket trading.
**
Earnings include: BlackBerry Ltd.
**
With files from wire services