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. equities posted solid gains to open the week, but futures are trading to the downside this morning ahead of the Federal Reserve's announcement on Wednesday. S&P/TSX 60 futures are also down modestly, with April West Texas Intermediate futures striking a fresh six-year low of $42.65 (U.S.) a barrel, as concerns over a global supply glut continue to drive bearish sentiment.
Fed monetary policymakers are widely expected to remove "patient" from the statement, putting a rate hike in play around the middle of the year.
"The biggest source of uncertainty at the moment is what will happen with the U.S. and rates lift-off, given the country is faced with a different set of fundamentals to the rest of the world," said IG market strategist Stan Shamu.
Bonds are rallying this morning, however, giving the impression that the tone is that of risk-off rather than traders worrying about a sooner-than-anticipated commencement of a tightening phase south of the border.
European equities were broadly lower.
The revised euro area CPI figures indicated that core inflation rate crawled up to 0.7 per cent in February, a tick higher than the initial estimate. Germany's ZEW indicator of economic sentiment inched up to 54.8 in March, an improvement from February's print, but far below the consensus estimate.
Chinese equities posted another day of solid gains after commentary from Premier Li opened up the possibility of stimulus if economic activity moderated more than desired.
In Japan, central bank governor Haruhiko Kuroda warned that inflation would likely reach zero per cent in the next few months due to falling oil prices, but reiterated his commitment to bringing inflation back to 2 per cent as soon as possible. The Bank of Japan did not signal that any additional stimulus was in the offing. Elsewhere in the realm of central banking, the release of minutes from the Reserve Bank of Australia suggested that further rate cuts are on the horizon.
Here's a look at the latest market numbers and other highlights ahead of the trading day.
Futures:
S&P 500 -0.32 per cent; Dow -0.27 per cent; Nasdaq -0.17 per cent
Equities:
Hong Kong's Hang Seng -0.2 per cent
Shanghai composite index +1.55 per cent
Japan's Nikkei +0.99 per cent
London's FTSE 100 +0.05 per cent
Germany's DAX -1.25 per cent
France's CAC 40 -0.59 per cent
Stoxx 600 -0.74 per cent
Commodities:
WTI crude oil (Nymex Apr) -2.53 per cent at $42.77 (U.S.) a barrel
Natural gas (Nymex Apr) +2.03 per cent at $2.771
Gold (Comex Apr) +0.04 per cent at $1,153.70 (U.S.) an ounce
Copper (Comex May) -1.84 per cent at $2.6185 (U.S.) a pound
Currencies:
Canadian dollar at 78.22 (U.S.), down 0.0007
U.S. dollar index down 0.126 at 99.478
Bonds:
U.S. 10-year Treasury yield 2.0498 per cent, down 0.0228
ECONOMIC INDICATORS:
Canada manufacturing sales fell by 1.7 per cent month-over-month in January, worse than economists' expectations for a 1.2 per cent drop.
U.S. housing starts tumbled to an annualized rate of 897,000 in February, the worth one-month decline in four years. The consensus estimate was for starts to come in at 1.04-million.
STOCKS TO WATCH:
Bank of Montreal has lowered its five-year fixed mortgage rate, the dominant product in the market, to 2.79 per cent from 2.99 per cent.
Bombardier Inc. has received a letter of intent from Flymojo, a Malaysian airline, to purchase 20 C-Series planes (valued at $1.47-billion) with options to double the size of this order.
Alimentation Couche-Tard Inc. reported adjusted earnings per share of $0.51 in its fiscal third quarter, seven cents below the consensus estimate. Revenues of $9.11-billion also came in below analysts' expectations. The company also announced that it is buying A/S Dansk Shell's retail, commercial fuels, and aviation operations in Denmark with cash on hand and credit. No financial terms were disclosed.
Molycorp Inc's shares were set to open lower on Tuesday after the rare earths miner's auditor raised doubts about its ability to continue as a "going concern" and the company posted a net loss for the twelfth quarter in a row. Molycorp said it had engaged financial and other advisers to restructure its debt, but may not have enough money to stay afloat if the efforts failed.
Transcontinental Inc. is raising its dividend rate by six per cent with its next quarterly payment on April 30. The Montreal-based printing and publishing company also announced financial results showing a higher profit as it benefited from restructuring its operations, cost-cutting and the rising value of the U.S. dollar.
Concordia Healthcare Corp. announced a $320-million bought deal of shares. The proceeds will be used to partially finance its acquisitions of Covis Pharma and Covis Injectables as well as pay down debt.
Allied Properties Real Estate Investment Trust has reached an agreement to purchase 180 John Street in Toronto for $8.25-million. The firm plans to redevelop the existing building for office and retail use.
Earnings include: Aeterna Zentaris, Alimentation Couche-Tard, New Look Eyewear, Solium Capital, Transcontinental, Adobe Systems, Burlington Stores, Flex Pharma Inc., Interoil Corp., Navigator Holdings, Oracle Corp., Pacific Sunwear of California Inc., Papa Murphy's Holdings Inc., Plug Power Inc., Sunshine Heart Inc., Zebra Tech Corp.
ANALYST ACTIONS:
Alibaba Group Holding Ltd. was upgraded to "buy" from "hold" at Stifel.
Dorel Industries was lowered to "sector underperformer" from "sector perform" at CIBC.