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Before the Bell: Futures up, eye Trump news conference

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.

Equity traders have been reluctant to make big commitments ahead of today's developments, but aren't shaking in their boots either. U.S. index futures, the FTSE and the Dax are all slightly in positive territory today.

The huge moves across global markets in late 2016 radiated outward from big rallies in U.S. stocks and the U.S. dollar as traders positioned themselves and picked potential winners and losers in a Trump administration. By the start of this year traders had priced Trump to perfection, increasing the risk of disappointment or negative surprises.

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With the new Congress sitting and Cabinet confirmation hearings underway, traders are starting to turn from hope and speculation to ‎looking at what is actually happening or not happening. Today's Trump press conference is another big step in the transition with markets looking for more clarity on which promises and policies are top priority as the Jan. 20 inauguration approaches.

Ahead of the press conference, which is scheduled for 11 a.m. EST, the U.S. dollar is trading higher against the euro, British pound and yen. Gold and copper are both up about 0.5 per cent, extending this week's gains. Higher metal and energy prices are keeping support behind resource currencies like the Canadian and Australian dollars.

Crude oil has been trying to rebound from two days of heavy losses with WTI holding $51 (U.S.) and gaining 0.4 per cent. Iraq exports, OPEC cuts and U.S. production remain in focus. American Petroleum Institute inventories rose 1.3 milllion (mbbls) last week. Crude could be active through today's Department of Energy weekly inventories at 10:30 a.m. EST with a 2.0 mmbbl increase widely anticipated.

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


Futures (as of about 8:50 a.m. ET)

Dow +0.03 per cent; S&P 500 -0.08 per cent; Nasdaq: +0.03 per cent; TSX 60 +0.07 per cent

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Japan's Nikkei +0.33 per cent
Shanghai composite index -0.77 per cent
Hong Kong's Hang Seng +0.84 per cent 
Germany's DAX +0.33 per cent
London's FTSE +0.13 per cent
France's CAC 40 +0.09 per cent

WTI crude oil (Nymex Feb.) +0.37 per cent at $51.01 (U.S.) a barrel
Gold (Comex Feb.) +0.24 per cent at $1,188.30  (U.S.) an ounce
Copper (Comex March) 0.00 per cent at $2.61 (U.S.) a pound

Canadian dollar -0.04 at 75.48 cents (U.S.)
U.S. dollar index +0.38 at 102.39

Canada 10-year bond yield +0.06 at 1.67 per cent


Japan November leading index.

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U.K. November non-EU trade deficit, industrial production, manufacturing production.

(8:15 a.m. ET) Canada December housing starts. Estimates for a 3.3 per cent increase to an annual rate of 190,000.

Earnings include: Cogeco Communications Inc., Cogeco Inc., DragonWave Inc., HB Fuller Co., KB Home, Sirius XM Canada Holdings Inc., Supervalu Inc., Corus Entertainment Inc.


Also see: Wednesday's small-cap stocks to watch

Merck rose 1.85 percent to $61.03 premarket after the FDA agreed to a speedy review of the company's application to combine immunotherapy with other drugs to treat lung cancer. AstraZeneca and Bristol-Myers, which are also developing similar therapies, were down 1.5 percent and 3.3 percent, respectively.


Mylan rose nearly 2 per cent to $39.72 after the FDA accepted a biologics license application for the company and Biocon's proposed biosimilar to treat breast cancer.


Archer Daniels fell 5.6 percent to $41.96 after China increased punitive tariffs on U.S. imports of an animal feed which would affect the global ethanol trader.


An Alstom and Bombardier consortium has won a French train contract estimated to be worth €1.16-billion ($1.22-billion) for the consortium, the companies and French authorities said on Wednesday.


Corus Entertainment Inc. reported a lower-than-expected quarterly profit for the twelfth straight quarter, hurt by lower revenue at its television business on a pro-forma basis. This is the first quarter in which Corus' results include its 2016 acquisition of media assets from sister company Shaw Communications Inc. and excludes Corus' pay television business, which the company exit last year. It reported $71.1-million of net income in the first quarter of its 2017 financial year, a big increase from the same time a year earlier before it acquired Shaw Media last spring. The profit amounted to 36 cents per share of the Toronto-based television, radio and entertainment company. Its adjusted earnings amounted to 41 cents per share or $80.8-million while revenue was just under $468-million. Analysts on average had expected adjusted earnings of 45 cents, according to Thomson Reuters I/B/E/S.


Supermarket operator Supervalu reported adjusted earnings of 5 cents per share, short of the consensus forecast of 13 cents per share, as it continues to be affected by a competitive grocery market. Its shares were down 7 per cent in premarket trading.


Ford said 2017 would be a less profitable year than 2016. Ford also declared a special dividend of 5 cents per share in addition to its regular quarterly dividend of 25 cents per share. Its shares were down 0.6 per cent in premarket trading.


Boeing will conduct involuntary layoffs of engineers this year, according to an internal memo seen by Reuters. No specific numbers were mentioned, and the jet maker also mentioned voluntary layoffs in a variety of job categories. Its shares were down 0.4 per cent in premarket trading.


Volkswagen's supervisory board is meeting on Wednesday to approve a draft $4.3-billion (U.S.) settlement with the U.S. Justice Department, marking a milestone in its attempts to recover from its emissions test cheating scandal. Shares in Europe's biggest carmaker rose as much as 4 per cent as investors welcomed the latest move to draw a line under the biggest business scandal in its 80-year history.


United Continental raised revenue projections for the just-concluded fourth quarter and year, thanks to stronger performance in November and December. American Airlines Group Inc. said on Wednesday it now expected its fourth-quarter unit revenue to be flat to up 2 per cent. The company's previous forecast ranged from a decline of 1 per cent to an increase of 1 per cent. American's shares were up 1.3 per cent in premarket trading. United's shares were unchanged.


Stryker said 2016 profit would come in at the high end of its prior forecasts, with the medical device maker helped by both stronger sales and recent acquisitions. Its shares were down 2.2 per cent in premarket trading.


U.S. Bancorp was named a "top" pick and given a "buy" rating in a new report by UBS. Rival regional banks BB&T, PNC, and SunTrust were all given ratings of "neutral."


AT&T was downgraded to "hold" from "buy" at Deutsche Bank, which points to a more balanced risk/reward picture at current price levels as well as tougher fundamentals. Its shares were down 0.6 per cent in premarket trading.


Netflix was added to JPMorgan Chase's U.S. Focus List. The firm called Netflix its #2 large cap stock pick behind Facebook, saying the video stream service should benefit from stronger content and increased revenue. Its shares were up 0.5 per cent in premarket trading.


With files from wire services

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