Skip to main content

The Globe and Mail

Before the bell: TSX to struggle after ugly China data

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.

Weaker-than-expected trade data out of China over the weekend will bring a shaky start to trading in North America this morning, especially for the resource-rich TSX, which will struggle amid hefty declines in oil and copper prices.

U.S. stock futures, early this morning trading nearly unchanged, are now down in the 0.1 per cent to 0.17 per cent range. Futures contracts for the S&P Toronto 60 index are down 0.2 per cent, in a signal that the Canadian market is set for a day of underperformance against Wall Street.

Story continues below advertisement

It was a rough session overnight in Asia, with the Shanghai stock index diving 2.8 per cent as China reported that its exports plunged 18.1 per cent in February, whereas economists were expecting a rise of 6.8 per cent. Imports rose 10.1 per cent from a year earlier, producing a trade deficit of $23-billion (U.S.), well ahead of market expectations of $14.5-billion.

That fed the flames of worry that growth in the Chinese economy is struggling to retain its lofty levels, with Friday's news of a corporate debt default by a solar company still weighing on traders' minds.

Copper, which is particularly sensitive to the economic picture in China given the country accounts for about 40 per cent of its demand, is pulling back significantly for the second day in a row. The most heavily trade copper futures contract on the Shanghai Futures Exchange fell 5 per cent today - its daily limit - to its lowest level in five years.

The New York copper futures contract is down nearly 2 per cent so far this morning, and that's likely to translate into more heavy losses in stocks such as First Quantum Minerals and HudBay Minerals on the TSX.

News out of Japan wasn't very encouraging today either. The country's GDP for the fourth quarter was revised down to show growth of only 0.7 per cent as capital spending and private consumption slowed. The previous reading was 1 per cent. The Nikkei closed down 1.01 per cent.

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

MARKETS:

Story continues below advertisement

Equities:

Futures: S&P 500 -0.16 per cent; Dow -0.17 per cent; Nasdaq -0.06 per cent; S&P Toronto -0.20 per cent

Hong Kong's Hang Seng -1.75 per cent

Shanghai composite index -2.86 per cent

Japan's Nikkei -1.01 per cent

London's FTSE 100 +0.39 per cent

Story continues below advertisement

Germany's DAX -0.06 per cent

France's CAC 40 +0.79 per cent

Commodities:

WTI crude oil (Nymex Apr) -1.24 per cent at $101.31 (U.S.) a barrel

Gold (Comex Apr) -0.10 per cent at $1,336.80 (U.S.) an ounce

Copper (Comex May) -1.80 per cent at $3.03 (U.S.) a pound

Currencies:

Canadian dollar at 89.98 (U.S.), down 0.0018.

U.S. dollar index up 0.04 at 79.76

Bonds:

U.S. 10-year Treasury yield 2.80 per cent, up 0.006.

ECONOMIC INDICATORS:

Canada housing starts rose to an annualized rate of 192,094 in February from an upwardly revised 180,481 in January. That also beat the Street estimate of 190,000.

STOCKS TO WATCH:

Chiquita Brands International and Fyffes PLC announced a merger involving stock. Chiquita shares are up 15 per cent in the premarket.

Earnings include: Com Dev; Second Cup; Endeavour Silver; United Natural Foods; Total Energy; Fortress Paper; Urban Outfitters; American Midstream Partners; Casey's General Stores.

ANALYST ACTIONS:

Macquarie upgraded Encana to "outperform" from "neutral" with a price target of $25.

Raymond James hiked its price target on Methanex to $85 (U.S.) from $72 and maintained an "outperform" rating.

Desjardins Securities hiked its price target on Detour Gold to $12 (Canadian) from $9.50 and maintained a "top pick" rating.

Raymond James hiked its target on NuVista Energy to $11.25 (Canadian) from $9.50 and maintained an "outperform" rating.

Nomura Securities upgraded U.S. Steel to "buy" from "neutral" and raised its price target to $32 (U.S.) from $27.

MKM Partners raised its price target on Twitter to $72 (U.S.) from $50 and reiterated a "buy" rating.

UBS raised its price target on Facebook to $90 (U.S.) from $72 and maintained a "buy" rating.

Jefferies raised its price target on Baker Hughes to $75 (U.S.) from $65 and reiterated a "buy" rating.

FBR Capital upgraded Big Lots to "outperform" from "market perform" and raised its price target to $45 from $35.

BMO Nesbitt Burns upgraded Archer Daniels Midland to "outperform" from "market perform" with a price target of $50 (U.S.)

THIS MORNING'S TOP INVESTING LINKS:

Seven signs we're near a market top, and what to do now.

How smart is Dr. Copper?

What the charts are saying about gold equities.

Twitter's ad rates are continuing to fall fast.

Bill Gross is declaring E-Erian is "trying to undermine me'

The difference between the 2007 market top and today.

-----

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

Report an error Licensing Options
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

Comments

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨