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Before the Bell: Gold prices could weigh on TSX

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.

North American traders appear to be returning from a long weekend in a good mood with both U.S. stocks and the greenback in rally mode. U.S. index futures are up 0.25 per cent so far with the FTSE flat and the Dax up 0.5 per cent. Positive flash manufacturing reports for France and Germany overnight have boosted continental stocks a bit.

U.S. traders appear to be responding favourably to the first retailer earnings reports which has seen Home Depot come in very strong, beating the street by a wide margin and announcing an eye catching 29-per-cent dividend increase. ‎Wal-Mart beat the street by a smaller margin and announced a more modest 2-per-cent dividend increase. Struggling Macy's is scheduled to report later this morning. Kraft Heinz may also be active again as its plan to bid for Unilever collapsed over the weekend.

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Resource stocks, particularly energy companies and base metal miners, may also attract attention from traders with commodity prices rallying today. WTI crude oil and copper are both up 1.5 per cent today.

Gold stocks, on the other hand, could struggle today with the yellow metal down 0.6 per cent and silver down 0.8 per cent. The U.S. dollar  is outperforming ahead of today's Fed member speeches with Philadelphia Fed President Patrick Harker having suggested over the weekend the potential for a rate hike in March. The U.K. pound is down against the U.S. dollar but up against euro and yen as the House of Lords continues debate on the Brexit bill.

MARKET DATA:

Futures (as of about 7:45 a.m. ET)

Dow +0.37 per cent; S&P 500 +0.24 per cent; Nasdaq: +0.26 per cent; TSX 60 -0.13 per cent

Equities
Japan's Nikkei +0.68 per cent
Shanghai composite index +0.41 per cent
Hong Kong's Hang Seng -0.76 per cent 
Germany's DAX +0.57 per cent
London's FTSE -0.01 per cent
France's CAC 40 +0.26 per cent

Commodities
WTI crude oil (Nymex Feb.) +1.59 per cent at $54.25 (U.S.) a barrel
Gold (Comex Feb.) -0.62 per cent at $1,231.40  (U.S.) an ounce
Copper (Comex March) +1.34 per cent at $2.76 (U.S.) a pound

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Currencies
Canadian dollar -0.17 at 76.09 cents (U.S.)
U.S. dollar index  unchanged at 100.95

KEY ECONOMIC RELEASES

Japan manufacturing purchasing managers' index (PMI), all-industry activity index and department store sales
Euro Area manufacturing, services and composite PMI

(9:45 a.m. ET) U.S. Markit PMI
(11:30 a.m. ET) Bank of Canada senior deputy governor Carolyn Wilkins participates in a panel hosted by the Competition Bureau.

Also: British Columbia budget

Earnings include: 5N Plus Inc.; Advance Auto Parts Inc.; American Water Works Company Inc.; Anglo American PLC; Capital Power Corp.; Concho Resources Inc.; Ecolab Inc.; Edison International; First Solar Inc.; Genuine Parts Co.; Golden Star Resources Ltd.; Home Depot Inc.; La-Z-Boy Inc.; La-Z-Boy Inc.; Macy's Inc.; Newmont Mining Corp.; Richmont Mines Inc.; Ritchie Bros. Auctioneers Inc.; Taseko Mines Ltd.; Wal-Mart Stores Inc.; Waste Connections Inc.; Westlake Chemical Corp.; Whiting Petroleum Corp.

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KEY STOCKS TO WATCH

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

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Restaurant Brands International Inc. (QSR-T), owner of the Burger King and Tim Hortons fast-food chains, is nearing a deal to acquire Popeyes Louisiana Kitchen Inc. (PLKI-Q), people familiar with the matter said on Monday.

**

Wal-Mart Stores Inc. (WMT-N) reported higher-than-expected global comparable sales on Tuesday, helped by a rise in online sales and higher traffic at Wal-Mart and Sam's Club stores.

Sales at U.S. stores open at least a year rose 1.8 per cent, excluding fuel. Analysts polled by research firm Consesus Metrix had forecast a rise of 1.3 per cent.

**

Home Depot Inc. (HD-N), the world's largest home improvement chain, reported higher-than-expected profit and sales, helped by a strong U.S. housing market, and set a $15 billion share repurchase plan.

Shares of the company, which also forecast 2017 sales ahead of Wall Street estimates, were up 1.8 per cent at $145.59 in premarket trading on Tuesday.

The Atlanta-based company said it expects 2017 sales to increase by 4.6 per cent, which translates to $98.95 billion. Analysts on average had expected $98.45-billion, according to Thomson Reuters I/B/E/S.

**

Kraft Heinz Co. (HNZ-Q) shares fell 4.3 per cent on Tuesday after it walked away from its $143 billion offer to buy Unilever , a day after the Anglo-Dutch company rejected the proposal. Unilever's U.S.-listed shares were down 8.4 percent.

**

Verizon Communications Inc. (VZ-N), the No. 1 U.S. wireless carrier, said on Tuesday it agreed to buy the core internet business of Yahoo Inc. (YHOO-Q) for $4.48-billion, reflecting a $350-million cut to the original price.

The deal, which is expected to close in the second quarter, will combine Yahoo's search, email and messenger assets as well as advertising technology tools with its AOL unit.

**

Freeport McMoRan Inc. (FCX-Q) was down 5 per cent at $14.16 after the miner warned on Monday it could take the Indonesian government to arbitration and seek damages over a dispute that has halted operations at a copper mine.

With files from wire services

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