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.
With Americans getting ready for their Thanksgiving holiday, markets around the world have been digesting recent moves. U.S. index futures are flat, holding on to recent gains that saw the Dow, S&P 500, Nasdaq composite and Russell 2000 all reach all-time highs on Tuesday. Gold is also steady while West Texas Intermediate crude oil is up slightly and copper is down slightly.
U.K. markets are more active today. The FTSE is down 0.1 per cent while the Dax is down 0.6 per cent. The pound is trading lower today against the U.S. dollar, euro and yen ahead of today's Autumn Statement. The U.K. government has confirmed its support of recent stimulus from the Bank of England. Since the Brexit vote, the U.K. economy has continued to perform really well so we may not see sweeping measures but we may see some initiatives to help the middle and working classes. Any comments related to the outlook for the U.K. economy may also impact trading.
It's a busy morning for economic news from the U.S. with several reports usually due later in the week being moved up. Some of the big numbers due include durable goods orders, jobless claims, flash manufacturing PMI and consumer sentiment. Department of Energy inventories may also attract some attention following last night's surprise 1.3-million barrel (mmbbl) drawdown in American Petroleum Institute inventories. Traders have been in a good mood this week and are likely looking to extend that feeling into the holiday weekend, so it would take a big surprise to move the markets meaningfully today. Volumes are likely to be light today so any swings that do happen could be amplified.
Minutes from the last Fed meeting are also due. Although a December rate hike is expected by pretty much everyone, any comments related to the path of future hikes into 2017 may attract some attention with the U.S. Dollar Index having priced in four to five increases next year.
Overall, U.S. markets are expected to go quiet after about noon as traders head out for the weekend. U.S. markets are closed Thursday and return for a quiet session Friday where the desks are staffed by junior people under orders not to make any waves while the heavy hitters are out shopping. Friday and over the weekend, Black Friday sales results and anecdotes from the shopping malls about traffic may give an idea of the state of consumer spending heading into the Christmas season.
Now, here is a closer look at what's going on this morning and what is still to come.
MARKET DATA:
Futures (as of about 9:00 a.m. ET)
Dow -0.01 per cent; S&P 500 -0.14 per cent; Nasdaq: -0.25 per cent; TSX 60 -0.10 per cent
Equities
Japan's Nikkei +0.31 per cent
Shanghai composite index -0.21 per cent
Hong Kong's Hang Seng -0.01 per cent
Germany's DAX -0.66 per cent
London's FTSE -0.15 per cent
France's CAC 40 -0.48 per cent
Commodities
WTI crude oil (Nymex Jan.) -0.21 per cent at $47.93 (U.S.) a barrel
Gold (Comex Feb.) -0.11 per cent at $1,212.80 (U.S.) an ounce
Copper (Comex March) -0.31 per cent at $2.55 (U.S.) a pound
Currencies
Canadian dollar -0.10 at 74.31 cents (U.S.)
U.S. dollar index +0.09 at 101.13
Bonds
Canada 10-year bond yield +1.48 at 1.55 per cent
KEY ECONOMIC RELEASES
Japanese markets are closed.
The Euro area reports manufacturing, services and composite PMI.
Mexico reports is third-quarter real GDP. Estimates are for a 2 per cent year-over-year increase.
(8:30 a.m. ET) U.S. durable goods orders for October. Consensus is for a 1.2 per cent increase.
Orders for big-ticket manufactured goods increased in October by the largest amount in a year, reflecting a surge in demand for commercial airplanes. The category that tracks business investment spending showed a far more modest advance, indicating this key category remains under stress. The Commerce Department says orders for durable goods rose 4.8 per cent in October. That is the best showing since a similar advance in October 2015. The gain primarily reflected a 94.1 per cent jump in demand for commercial airplanes, an extremely volatile category. The category that tracks business investment plans was up 0.4 per cent, erasing only a small part of a 1.4 per cent plunge in September. Business investment spending has been a drag on the economy this year, reflecting in part big cutbacks in the energy sector.
(8:30 a.m. ET) U.S. initial jobless claims for week of Nov. 19. Estimates are for a figure of 248,000, or up 13,000.
The number of Americans filing for unemployment benefits rose from a 43-year low last week, but remained below a level that is consistent with a tightening labor market. Initial claims for state unemployment benefits increased 18,000 to a seasonally adjusted 251,000 for the week ended Nov. 19, the Labor Department said on Wednesday. Claims for the prior week were revised to show 2,000 fewer applications filed than previously reported. Claims have now been below 300,000, a threshold associated with a healthy labor market, for 90 straight weeks. That is the longest run since 1970, when the labor market was much smaller.
(9:00 a.m. ET) U.S. mortgage activity last week.
A measure of U.S. mortgage application activity rose last week, rebounding from a 10-month low, even as 30-year mortgage rates climbed to their highest levels since January, data from the Mortgage Bankers Association released on Wednesday showed. The Washington-based industry group's seasonally adjusted mortgage market index rose 5.5 percent to 460.3 in the week ended Nov. 18. Last week, it stood at 436.3, the lowest since the week of Jan. 15.
(9:45 a.m. ET) U.S. PMI Manufacturing Index for November.
(10 a.m. ET) U.S. new home sales for October. Consensus is for a 0.5 per cent decrease to a 590,000 annualized rate.
(10 a.m. ET) U.S. consumer sentiment for November. Consensus are for a read of 91.6.
(10:30 a.m. ET) EIA Petroleum Status Report
(12 p.m. ET) EIA Natural Gas Report
(2 p.m. ET) U.S. Federal Open Markets Committee minutes released for policy statement on Nov. 2.
KEY STOCKS TO WATCH
Also see: Wednesday's small-cap stocks to watch
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Shares of Eli Lilly plunged 14.8 percent premarket after the company said it would stop developing its Alzheimer's drug following a trial failure. Other companies developing Alzheimer's drugs also fell. Biogen dropped 10 percent, while Axovant tumbled 17.3 percent.
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Urban Outfitter sank 10.6 percent to $34.87 after the apparel maker's comparable sales missed analysts' estimates.
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Deere soared 10.9 percent to $102 after the farm equipment maker's quarterly sales handily beat expectations.
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Data centre and services provider Hewlett Packard Enterprise reported adjusted quarterly profit of 61 cents per share, one cent a share above estimates. Revenue was slightly below forecasts, and the company gave an outlook for the current quarter that falls largely below Street forecasts in what it calls a "tough market."
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HP Inc., the other spinoff of the former Hewlett-Packard, reported adjusted profit of 36 cents per share, in line with street forecasts. The computer and printer maker's revenue came in above forecasts. HP said the personal computer market continues to be tough, but that it has eased somewhat.
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GameStop reported quarterly profit of 49 cents, two cents a share above estimates. The video game retailer's revenue essentially in line but it gave a disappointing holiday season forecast.
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Earnings include: Deere & Co.; Siemens Ltd.; Urbana Corp.;
With files from wire services, cnbc.com; marketwatch.com