Luke KawaThe Globe and Mail
The Before the Bell report is updated throughout the premarket to reflect the latest news developments and market moves. Check back later for updates.
U.S. equity futures are flat ahead of a busy morning of economic data to kick off the week.
Two readings on the health of the United States' manufacturing sector – the Markit Purchasing Managers' Index and the ISM PMI – are due out this morning, along with January's personal consumption expenditures index, which is the Federal Reserve's preferred gauge of inflation.
Over the weekend, China received the most attention as policymakers responded to softening economic data and rising real interest rates with the addition of monetary stimulus. The People's Bank of China lowered its benchmark one-year lending and deposit rates by 25 basis points to 5.35 and 2.5 per cent, respectively, on Saturday evening.
The cut to both the deposit rate and lending had been largely speculated in Chinese media for some time, so it shouldn't necessarily surprise, said IG chief market strategist Chris Weston. "The moves were designed to lower 'real' interest rates, which have effectively been increasing as inflation has been dropping, in turn creating a tightening of financial conditions. Corporate and household debt stands around 200 per cent of GDP, so servicing this debt equates to a huge 30 per cent of GDP, so the easing measures should make rolling this debt over cheaper."
These moves came prior to the annual meeting of the National People's Congress, which begins on Thursday.
On Monday, Chinese equities strengthened while the yuan weakened.
Chinese manufacturing data released over the weekend was mixed, with the CFLP or "official" PMI coming in at a level which points to contraction in the sector for the second consecutive month. The HSBC PMI, however, surprised to the upside, hitting a seven-month high in February.
Over in Europe, inflation declined by less than economists anticipated in February, down 0.3 per cent year-over-year. The labour market also improved by more than expected, with the euro area's unemployment rate falling to 11.2 per cent. Meanwhile, euro zone manufacturing PMIs showed that the sector continued to expand in February with the exception of Austria, Greece, and France.
"Coming months will hopefully see all countries' manufacturing sectors pick up speed, as business and consumer confidence is buoyed by ECB stimulus," said Markit chief economist Chris Williamson. "The recent fall in the euro should also provide a noticeable stimulant to export sales."
Oil is moving lower, a continuation of its slide in the second half of February after failing to break above $55 per barrel on the 17th. Reports of rising output in Saudi Arabia and Libya, as well as the increased odds of an Iranian nuclear agreement (which would presumably boost the nation's oil exports) are weighing on the price of crude. The near contract for West Texas Intermediate sank below $49 per barrel this morning after a strong rally on Friday afternoon. Nonetheless, S&P/TSX 60 futures are slightly higher ahead of the open.
Here's a look at the latest market numbers and other highlights ahead of the trading day.
Futures:
S&P 500 +0.02 per cent; Dow +0.04 per cent; Nasdaq +0.12 per cent
Equities:
Hong Kong's Hang Seng +0.21 per cent
Shanghai composite index +0.78 per cent
Japan's Nikkei +0.15 per cent
London's FTSE 100 -0.24 per cent
Germany's DAX -0.16 per cent
France's CAC 40 -0.81 per cent
Stoxx 600 -0.49 per cent
Commodities:
WTI crude oil (Nymex Apr) -1.85 per cent at $48.84 (U.S.) a barrel
Natural gas (Nymex Apr) -1.10 per cent at $2.704
Gold (Comex Apr) +0.07 per cent at $1,213.90 (U.S.) an ounce
Copper (Comex May) -0.32 per cent at $2.683 (U.S.) a pound
Currencies:
Canadian dollar at 80.05 (U.S.), up 0.001
U.S. dollar index down -0.163 at 95.130
Bonds:
U.S. 10-year Treasury yield 2.00 per cent, up 0.0069
ECONOMIC INDICATORS:
Canada's current account deficit for the fourth quarter came in $13.9-billion, lower than the consensus estimate of $12.5-billion.
U.S. personal income rose by 0.3 per cent month-over-month in January, a tick less than expected, while personal spending fell by 0.2 per cent month-over-month, a tick worse than anticipated.
(945 a.m. ET) U.S. Markit manufacturing PMI for February.
(10 a.m. ET) U.S. manufacturing ISM PMI.
(10 a.m ET) U.S. construction spending for January, forecast to rise 0.3 per cent.
STOCKS TO WATCH:
This weekend, BlackBerry Ltd. announced that it had enhanced its partnership with Samsung Electronics Co. Ltd., signing a new agreement that will see greater integration of its services into Samsung's mobile security platform in an effort to bolster the South Korean company's prospects in the enterprise space.
Canadian Tire Corporation has called a meeting of the holders of its notes due on April 2028, of which there are $350-million outstanding. Amending the terms of these notes, according to management, would provide the company with greater flexibility to manage and finance its business.
Eldorado Gold Corp. said its Greek subsidiary received a formal notice from authorities in the country revoking the approval to build a processing plant. Management said this decision "has no legal basis" and that it will act to challenge to challenge it in the courts if necessary.
Hewlett-Packard Company has entered into a definitive agreement to acquire wireless networks provider Aruba Networks Inc. for roughly $2.7-billion in cash
Hunter Harrison, chief executive officer of Canadian Pacific Railway Ltd., will speak before the Canadian Club of Toronto early in the afternoon.
NXP Semiconductors NV is buying U.S.-based Freescale Semiconductor Ltd. for $11.8-billion in cash and stock. Both firms supply chips used in automobiles.
Earnings include: Morneau Shepell, Pizza Pizza, SunOpta, Acceleron Pharma Inc., Carmike Cinemas Inc., Chuy's Holdings Inc., Core-Mark Holdings Co., Cumulus Media Inc., DTS Inc., Federal Signal Corp., Guidewire Software Inc., Halozyme Therapeutics Inc., Matador Resources, McDermott International, Mid-Con Energy Partners, Mylan Inc., Nabors Industries Ltd., Newcastle Investment Corp., NutriSys Inc., Palo Alto Networks Inc., Salix Pharmaceutical Ltd., Sotheby's, Vanguard Natural Resources.
ANALYST ACTIONS:
Weight Watchers International Inc. was cut to "underweight" from "equal weight" at Morgan Stanley.
BlackRock Inc. was downgraded to "neutral" from "buy" at Citigroup.
Joy Global Inc. was lowered to "neutral" from "buy" at Bank of America.
Aimia Inc. was upgraded to "action list buy" from "buy" at TD Securities.