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 have lost the sugar high provided by a dovish Federal Reserve, and are trading slightly to the downside ahead of the open.
On Wednesday, Fed Chair Janet Yellen declared that a rate hike was on the table in June, but stressed that the labour market needs to improve more and that monetary policymakers need to be confident that inflation is trending back towards target. Ms. Yellen and her colleagues also downgraded the outlook for U.S. economic growth, and the group's so-called "dot plot" showed members do not anticipate hiking rates as aggressively this year as they had in December.
These communiqués prompted most economists to push back their timetables for the first rate hike until September.
"There are a couple of things the Fed seems to be worried about here, namely wage growth and the stronger U.S. dollar impacting exports growth," said IG market strategist Stan Shamu. "However, given the strong improvement we've seen in the labour market, one wonders how much longer wage growth can be held back."
The Fed derailed the U.S. dollar bull rally for at least one day, which also provided support for commodity prices.
West Texas Intermediate April futures spiked above $45 per barrel (U.S.) on Wednesday afternoon, but are down to about $43 per barrel ahead of the open. Nevertheless, S&P/TSX 60 futures are slightly in positive territory this morning.
Likewise, the Canadian dollar, which briefly broke above 80 cents U.S. in the midst of its biggest intraday gain in six years on Wednesday, is back below 79 cents this morning.
Most European stocks are on the rise, taking their cues from the strong finish in U.S. equities. The euro, which went on a tear against the U.S. dollar, has given back nearly all of those gains overnight.
Asian stocks, which the exception of Japan's Nikkei, also enthusiastically greeted the news that the Federal Reserve is in no rush to hike rates.
Here's a look at the latest market numbers and other highlights ahead of the trading day.
Futures:
S&P 500 -0.4 per cent; Dow -0.3 per cent; Nasdaq -0.2 per cent
Equities:
Hong Kong's Hang Seng +1.45 per cent
Shanghai composite index +0.14 per cent
Japan's Nikkei -0.35 per cent
London's FTSE 100 +0.09 per cent
Germany's DAX -0.15 per cent
France's CAC 40 -0.04 per cent
Stoxx 600 +0.51 per cent
Commodities:
WTI crude oil (Nymex Apr) -3.69 per cent at $43.01 (U.S.) a barrel
Natural gas (Nymex Apr) -1.44 per cent at $2.878
Gold (Comex Apr) +1.09 per cent at $1,163.90 (U.S.) an ounce
Copper (Comex May) +2.78 per cent at $2.642 (U.S.) a pound
Currencies:
Canadian dollar at 78.95 (U.S.), down 0.0062
U.S. dollar index up 0.183 at 98.732
Bonds:
U.S. 10-year Treasury yield 1.9459 per cent, up 0.026
ECONOMIC INDICATORS:
Last week's initial U.S. jobless claims came in at 291,000, slightly better than the consensus estimate.
STOCKS TO WATCH:
Potash Corp. said changes to Saskatchewan's tax rules contained in the provincial budget announced on Wednesday would reduce pretax profit by up to $100-million this year. Shares are down 4 per cent in the U.S. premarket.
Apple Inc. will have its first full day of trading as part of the Dow Jones industrial average today.
Williams-Sonoma Inc. reported fourth-quarter adjusted earnings of $1.52 per share, matching analysts' expectations.
Target Corp. will receive a $1.6-billion (U.S.) tax break in the United States after its Canadian division filed for bankruptcy protection, much to the chagrin of its creditors. The retailer also agreed to a settle a lawsuit related to its data breach for $10-million.
TransCanada Corp. is under investigation by the National Energy Board pertaining to alleged natural gas pipeline safety-code violations.
Earnings include: Alaris Royalty, AutoCanada, Fiera Capital, Martinrea, Medical Facilities, Care.com Inc., Lennar Corp., Marcus Corp., Michaels Companies Inc., Micron Tech Inc., Movado Group, New York & Company Inc., NIKE Inc., Rally Software Development Corp., Tech Data Corp., Veracyte Inc., Vital Therapies Inc.
ANALYST ACTIONS:
Chesapeake Energy Corp. was lowered to "underperform" from "neutral" at Sterne Agee,
eBay Inc. was downgraded to "underweight" from "neutral" at Piper Jaffray.
Janus Capital Group Inc. was upgraded to "neutral" from "sell" by Citigroup.