(Updated with the latest corporate news, market data and economic reports)
Get set for an ugly start to trading today. U.S. stock futures are down about 1 per cent and major commodities are also deep into red territory, suggesting the TSX is in store for some significant losses this morning.
The bearish tone is being blamed on U.S. corporate earnings. They were expected to slow this quarter and so far they've lived up to those expectations. About a quarter of U.S. firms have now reported, and only 60 per cent of them posted a positive earnings surprise, which is below the post-2000 average beat rate of 69 per cent, according to a report from Credit Suisse today.
Perhaps more worrisome, of the 20 companies in the S&P 500 that issued guidance for the fourth quarter, 18 have cut their forecasts, according to Goldman Sachs.
There are plenty of fresh earnings out today, including Facebook after the closing bell. For a recap of results so far and what to expect later, see Stocks and Economic Indicators to Watch below.
Here in Canada, retail sales for August came in as expected this morning, with a monthly gain of 0.3 per cent.
And the Bank of Canada announced it was keeping interest rates unchanged. That was widely anticipated, but the bank was less dovish than some expected, commenting that "over time, some modest withdrawal of monetary policy stimulus will likely be required." That indicates the bank believes the next move will be higher interest rates and diminished thoughts that the bank was backing away for tightening monetary policy. The loonie spiked nearly half a cent on the bank statement and is now nearly unchanged.
Now, here's the rundown of what else you need to know before the trading day gets underway:
MARKETS:
Equities:
Futures: Dow -1.1 per cent, S&P 500 -1.2 per cent, Nasdaq -1.0 per cent
Hong Kong's Hang Seng index +0.68 per cent
Shanghai composite index -0.88 per cent
Japan's Nikkei +0.04 per cent
London's FTSE 100 -0.92 per cent
France's CAC 40 -0.81 per cent
Germany's DAX index -1.27 per cent
Commodities:
WTI (Nymex Nov) -1.94 per cent at $88.30 (U.S.) a barrel
Gold (Comex Dec) -0.94 per cent at $1,710.10 (U.S.) an ounce
Copper (Comex Dec) -1.21 per cent at $3.58 (U.S.) a pound
Currencies:
Canadian dollar down 0.0001, or 0.01 per cent, at $1.0079 (U.S.)
STOCKS AND ECONOMIC INDICATORS TO WATCH:
Statistics Canada reported retail sales rose 0.3 per cent in August, in line with economists' forecasts.
(0900 a.m. ET) The Bank of Canada makes its interest rate announcement. The benchmark rate is expected to remain unchanged at 1 per cent.
Royal Bank of Canada has agreed to acquire the Canadian auto finance and deposit business of Ally Financial Inc. for a total consideration of $3.1-billion to $3.8-billion.
Target said that it plans to sell its credit card portfolio to TD Bank Group. TD Bank will pay an amount equal to the gross value of the outstanding receivables when the deal closes. Right now, the gross value is about $5.9-billion.
Yahoo beat quarterly earnings expectations late Monday as its new CEO, Marissa Mayer, sketched out her plan for revamping the mobile and search advertising business. Shares are up 4 per cent in the premarket.
Texas Instruments reported late Monday that earnings jumped but revenues slipped 2 per cent.
Canadian National late Monday reported quarterly profit of $1.52 a share, nearly equal to a year ago, and announced a share buyback.
Dupont met quarterly earnings expectations on an adjusted basis, but cut its full-year outlook and said it aims to eliminate around 1,500 jobs. Shares are down 6 per cent in the premarket.
3M has cut its 2012 guidance to $6.27 to $6.35 from an earlier $6.35 to $6.50, citing "current economic realities." Shares are down 3 per cent in the premarket.
Xerox reported adjusted profit of 25 cents, meeting analyst expectations.
Apple is hosting a media event in California at which it's expected to unveil a new iPad tablet with a seven-inch screen. Follow our live blog of the event here.
Other earnings include: Canfor Corp., Celestica Inc., Embraer SA, Facebook Inc., Harley-Davidson Inc., Juniper Networks Inc., Netflix Inc., United Parcel Service Inc., United Technologies Corp., and Whirlpool Corp.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
U.S. stocks are beating every major asset class for the first time in 17 years even as economic growth weakens and profits rise at the slowest rate since 2009.
A good reason to buy Facebook's beaten-down shares, even if Tuesday's earnings report brings more bad news.
Rich private investors are turning their backs on hedge funds because moves to attract more conservative pension fund clients mean managers no longer deliver the big returns they crave.
It's October, which means that funds are scouring the market for stocks that they think are set to outperform — and they're agreeing on which names are their favorites right now.
Strategists are warming up once again to emerging markets.
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For analyst actions, breaking investing news and exclusive analysis, follow Darcy Keith on Twitter at @eyeonequities
Darcy Keith