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Before the bell: Stock futures soft, Canada banks may rally

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 slightly lower ahead of the opening bell, suggesting the S&P 500 will struggle to hit another record intraday high today. The TSX, which traded at fresh three-year highs on Monday, will also face the headwinds of generally weaker commodity prices this morning.

The rebound in the stock market since emerging market worries sparked a pullback in January has some market participants skeptical the gains will hold. U.S. economic data of late have been on the weak side, though the common thinking is that the adverse winter weather conditions are to blame. The U.S. this morning released housing prices for December, which came in largely as the Street anticipated. Shortly after the opening bell will come consumer confidence numbers.

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Here in Canada, a big focus will be on bank earnings. Both National Bank and the Bank of Montreal have beaten Street views in reporting their latest quarters, which should bolster the TSX financial sector today in anticipation of more good news to come from the other big banks.

The overseas picture isn't encouraging this morning. European stocks are mostly lower, despite the European Union upgrading its economic forecasts today, believing that a modest recovery is now sustainable. The European Commission said its expects the euro zone to grow 1.2 per cent this year and 1.8 per cent in 2015, up from previous estimates given in November for 1.1 per cent and 1.7 per cent, respectively.

In Asia, Shanghai suffered a steep loss of more than 2 per cent after the Chinese yuan dropped the most since 2010 on speculation that the country's central bank wants an end the currency's steady appreciation. The yuan has been almost on a straight upwards path since a U.S. dollar peg ended in 2005, but it's speculated the central bank wants to change the perception of a one-way bet on yuan gains.

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

MARKETS:

Equities:

Futures: S&P 500 -0.18 per cent; Dow -0.12 per cent; Nasdaq -0.17; S&P Toronto -0.01 per cent

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Hong Kong's Hang Seng -0.32 per cent

Shanghai composite index -2.06 per cent

Japan's Nikkei +1.44 per cent

London's FTSE 100 -0.90 per cent

Germany's DAX -0.45 per cent

France's CAC 40 -0.48 per cent

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Commodities:

WTI crude oil (Nymex Apr) -0.90 per cent at $101.89 (U.S.) a barrel

Gold (Comex Apr) -0.29 per cent at $1,334.10 (U.S.) an ounce

Copper (Comex May) -0.73 per cent at $3.22 (U.S.) a pound

Currencies:

Canadian dollar at 90.35 (U.S.), vs. 90.36 at Monday's North American close.

U.S. dollar index down 0.09 at 80.13

Bonds:

U.S. 10-year Treasury yield 2.74 per cent, down 0.001

ECONOMIC INDICATORS:

S&P Case-Shiller home price index for the U.S for December. The 20-city index rose 13.42 per cent from a year earlier, pretty much in line with Street estimates.

(10 a.m. ET) U.S. consumer confidence for February from the Conference Board. Economists expect a reading of 80.1, slipping from last month's 80.7.

STOCKS TO WATCH:

Bank of Montreal reported adjusted first-quarter earnings per share of $1.61 versus the $1.53 Street estimate.

National Bank late Monday reported adjusted quarterly earnings of $1.15 a share, beating analyst expectations of $1.05 a share.

Tim Hortons said it will open 500 new locations in Canada by the end of 2018 as part of a new five-year strategic plan.

Macy's reported fourth-quarter adjusted earnings per share of $2.31 (U.S.) versus the Street estimate of $2.17.

Home Depot reported adjusted earnings of 73 cents per share, beating the Street view of 71 cents.

Toll Brothers reported adjusted earnings of 25 cents per share, beating the Street view estimate of 18 cents.

Other earnings include: Davis + Henderson; Dundee Industrial REIT; First National Financial; Innergex Renewable Energy; MacDonald Dettwiler; Trican Well Service; 5N Plus; AMC Entertain Holdings; AMC Entertain Holdings; Dillard's; Domino's Pizza; DreamWorks Animation; First Solar; Home Depot; Nordson; Oasis Petroleum; Office Depot; Rosetta Stone; T-Mobile US; Toll Brothers; United Natural Foods.

BlackBerry unveiled a number of new products and services including a low-cost smartphone that will be released in April and an update to its flagship server software for organizations. CEO John Chen also told Bloomberg today that the company could eventually consider divesting its BBM instant messaging service. Shares in the U.S. premarket are up 5 per cent.

ANALYST ACTIONS:

Moody's lowered TransAlta's credit outlook to negative, warning that there is a one in three chance it may downgrade its debt rating following quarterly results that failed to meet its expectations.

Canaccord Genuity upgraded Kinross Gold to "buy" from "hold" and hiked its price target to $7 (Canadian) from $5.50.

Canaccord Genuity upgraded Golden Star Resources to "hold" from "sell" and hiked its price target to $1 (Canadian) from 30 cents.

Goldman Sachs downgraded Pan American Silver to "sell" from "neutral" with a price target of $10 (Canadian) as the bank lowered its silver forecast.

Morgan Stanley raised its price target on Tesla Motors to $320 (U.S.) from $153 and maintained its "overweight" rating.

THIS MORNING'S TOP INVESTING LINKS:

A look at the longest and strongest bull markets of the past - and how they stack up to today.

Warren Buffett looks back at a pair of real estate purchases and the lessons they offer for equity investors.

When it comes to earnings growth this year, either analysts are wrong - or stocks will go crazy.

George Soros says he's a euro believer and is looking to invest in European banks.

All-bond portfolios are the one investment allocation everyone should avoid.

Most investors are outcome-focused, but to be successful, they should become process-focused.

People who cannot accurately forecast markets.

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For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities.

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About the Author
Investment Editor

Darcy Keith is The Globe and Mail's Investment Editor. He has been a business journalist since 1992 and joined the Report on Business in 2010 from Yahoo! Canada, where he was the senior editor of finance. More

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