The Before the Bell report is constantly updated to reflect the latest news developments and market moves in the premarket. Check back later for updates.
North American stock futures are largely unchanged this morning, as traders take in a heavy schedule of earnings reports that will provide clues on whether the market should be able to continue to rally - or is overvalued from a valuation perspective.
Markets so far in 2014 have mostly treaded water. To justify the surge in stock values last year, there will have to be a corresponding lift in profits - and this earnings season is still young.
Of the 66 S&P 500 stocks that posted results for the quarter prior to today, 68 per cent beat profit estimates, while 67 per cent have surpassed sales projections, according to Bloomberg. Today, there are 25 companies in the benchmark index reporting results.
Overnight, China had a particularly strong session, with the Shanghai index rallying 2.1 per cent. The move was tied to easing cash rates in the country after the People's Bank of China on Tuesday pumped $42-billion in the interbank market to ease fears of a credit squeeze. That was the biggest one-day amount in nearly a year. It did little, however, to ease worries about China's exploding debt levels.
Japanese stocks held relatively steady as that country's central bank did the expected and announced no change in its monetary policy. The central bank's inaction on signalling further monetary easing measures disappointed some observers, however.
Here at home, it's Bank of Canada day. It'll be releasing its latest decision on interest rates at 10 a.m. (ET) - which will undoubtedly be left unchanged - but commentary in the monetary policy report could ignite considerable action in the currency and credit markets. The loonie on Tuesday slipped below 91 cents to a 4 1/2-year low. It's off those levels this morning, but hints from the Bank of Canada that it would consider a cut in interest rates are very likely to put the loonie under pressure again.
Now, here's a closer look at what's going on this morning and what's to come.
MARKETS:
Equities:
Futures: S&P 500 -0.08 per cent; Dow -0.21 per cent; Nasdaq +0.01 per cent; S&P Toronto -0.06 per cent
Hong Kong's Hang Seng +0.21 per cent
Shanghai composite index +2.18 per cent
Japan's Nikkei +0.16 per cent
London's FTSE 100 -0.11 per cent
Germany's DAX -0.22 per cent
France's CAC 40 -0.18 per cent
Commodities:
WTI crude oil (Nymex Mar) +0.98 per cent at $94.88 (U.S.) a barrel
Gold (Comex Feb) -0.07 per cent at $1,241.00 (U.S.) an ounce
Copper (Comex Mar) -0.57 per cent at $3.33 (U.S.) a pound
Currencies:
Canadian dollar at 91.21 (U.S.), vs. 91.14 at Tuesday's North American close.
U.S. dollar index down 0.04 at 81.05
Bonds:
U.S. 10-year Treasury yield 2.85 per cent, up 0.02
ECONOMIC INDICATORS:
(10 a.m. ET) Bank of Canada to release its latest interest rate announcement and monetary policy report.
(1115 a.m. ET) Bank of Canada governor Stephen Poloz holds news conference to discuss the central bank's monetary policy report.
STOCKS TO WATCH:
Valeant Pharmaceuticals International Inc.'s board has approved a new share buyback program for up to $1.5-billion.
BlackBerry Ltd. confirmed Tuesday it plans to sell most of its Canadian real estate. Shares are up 3 per cent in the premarket, continuing their recent surge higher.
Air Canada said its domestic pension plans had a small surplus as of Jan. 1, according to preliminary estimates — contrasting with the $3.7 billion solvency deficit a year earlier.
IBM shares are down 3 per cent in the premarket after reporting fourth-quarter earnings late Tuesday and a full-year earnings forecast below Street expectations.
Advanced Micro Devices shares are down 10 per cent in the premarket after saying it expects first-quarter revenue to decline as much as 19 per cent from its fourth-quarter results.
Freeport-McMoRan Copper & GOld reported Q4 EPS of 68 cents (U.S.), below expectations of 80 cents. Shares are down 1.5 per cent in the premarket.
General Dynamics reported Q4 EPS from continuing operations of $1.76 (U.S.) compared to the Street view of $1.75.
Norfolk Southern reported Q4 EPS of $1.64 (U.S.) versus Street expectations of $1.51.
Other earnings today include: Allegheny Technologies; Coach; eBay; F5 Networks; Jacobs Engineering Group; Logitech International; Netflix; Noble; and SanDisk.
Coach Inc said comparable sales in North America fell 13.6 percent in the final quarter of 2013. Shares are down 6 per cent in the premarket.
ANALYST ACTIONS:
Canaccord Genuity downgraded CAE to "hold" from "buy" on share price appreciation, hikes target to $15.50 (Canadian) from $13.50.
Canaccord Genuity downgraded Iamgold to "hold" from "buy" but keeps a $5 (Canadian) price target.
Industrial Alliance upgraded Mega Brands to "strong buy" from "hold" and hiked its target to $18 (Canadian) from $16.
Desjardins Securities downgraded Detour Gold to "hold" from "buy" on valuation, hikes target to $6.75 (Canadian) from $6.
RBC Dominion Securities downgraded Capstone Mining to "sector perform" from "outperform" after its recent rally and raised its price target to $3.40 (Canadian) from $3.
M Partners downgraded Wajax to "hold" from "buy" and maintained a $39 (Canadian) price target.
Goldman Sachs downgraded Mosaic to "sell" from "neutral" but raised its price target to $41 (U.S.) from $35.
FBR Capital upgraded Juniper Networks to "market perform" from "underperform" and raised its price target to $25 (U.S.) from $16.
RBC Dominion Securities downgraded Travelers to "outperform" from "top pick" and cut its price target to $98 (U.S.) from $100.
Sterne Agee downgraded Dollar Tree to "neutral" from "buy" and cut its price target to $56 (U.S.) from $63.
RBC Dominion Securities downgraded The Travelers Cos to "outperform" from "top pick" and cut its price target to $98 US from $100.
Argus initiated coverage on Catamaran with a "buy" rating and $65 (U.S.) price target.
THIS MORNING'S TOP INVESTING LINKS:
The gold-interest rate correlation suggests bullion could be heading a lot lower. Keeping to that theme, Morgan Stanley has just cut its gold price targets.
U.S. stocks are at a major inflection point.
The amazing run for consumer discretionary stocks may be coming to an end.
Why rising interest rates can be good for stocks.
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For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities.
Darcy Keith