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 falling after some wild gyrations on Tuesday evening. Shortly before 9pm ET, futures tumbled for seemingly no cause, but other 'risk' assets did not follow suit.
S&P 500 futures are now down about 0.3 per cent ahead of the opening bell. Tuesday night, futures for the U.S. benchmark suddenly dropped about 1.3 per cent within a 20-minute timespan.
"It's been a fairly crazy session today in Asia and there has been a lot of head scratching as to the reason behind the sharp moves, which were predominantly centred in U.S. futures," said IG chief market strategist Chris Weston. "Generally you will see the algorithms pull markets closer together in alignment, especially when U.S. futures do their own thing, but that wasn't the case."
S&P/TSX 60 futures are slightly higher despite continued softness in the price of oil.
West Texas Intermediate futures are trading near $47 per barrel after world powers continued discussions with Iran regarding its nuclear program, which look to be bearing fruit.
A deal between the two sides has the potential to allow Iran to unleash even more crude onto the market, which would be a net negative for the price of the battered commodity, or, at the very least, pressure the spread between the more expensive Brent and West Texas Intermediate. The weekly update on U.S. crude oil inventories is due out at 10:30 a.m. (ET).
The ADP non-farm employment report, considered by some to be a preview for the U.S. nonfarm payrolls report on Friday (at which point the markets will be closed), was released earlier this morning and came in weaker than expected.
Fed regional presidents Dennis Lockhart and John Williams are also expected to deliver public remarks this morning.
Overnight and throughout the morning, we received updates on the state of the global economy.
March's Purchasing Managers' Index readings for Canada and the United States are scheduled to be published at 9:30am and 9:45 am ET, respectively.
China's "official" CFLP Manufacturing PMIs came unexpectedly rose into expansionary territory of 50.1 in March.
Any reading above 50 suggests growth in the manufacturing sector, while prints below 50 signal contraction.
However, China's HSBC Manufacturing PMI dipped back below 50 for the month.
"The latest data indicate that domestic and foreign demand remains subdued amid weaker market conditions, which dampened output growth as a result," said Markit economist Annabel Fiddes. "Meanwhile, company downsizing policies contributed to a further decline in manufacturing employment, with the pace of job shedding the strongest since last summer."
Chinese equities, however, did not seem to mind this mixed bag of data, posting sizeable gains.
Japan's quarterly Tankan survey showed that conditions for big manufacturers were flat compared to the final three months of 2014, but are expected to diminish in the second quarter. The Nikkei retreated on Wednesday.
European PMIs continue to indicate that growth is on the upswing. The manufacturing PMI for the euro zone as a whole rose to its highest level in ten months, with an acceleration in the pace of the sector's expansion seen in Italy, Germany, the Netherlands, and Spain.
"Producers are benefitting from the weaker euro, which has had the dual effect of boosting competitiveness in export markets as well as making competing imports more expensive in the home markets," said Chris Williamson, chief economist at Markit. "New orders are consequently showing the best growth for nearly a year, and the fact that manufacturers are boosting their payroll numbers at the fastest rate for three-and-a half years indicates optimism that the upturn will be sustained in coming months."
After a poor end to the first quarter, European bourses are moving higher on Wednesday.
Here's a look at the latest market numbers and other highlights ahead of the trading day.
Futures:
S&P 500 -0.35 per cent; Dow -0.28 per cent; Nasdaq -0.28 per cent
Equities:
Hong Kong's Hang Seng +0.69 per cent
Shanghai composite index +1.66 per cent
Japan's Nikkei -0.90 per cent
London's FTSE 100 +0.75 per cent
Germany's DAX +0.95 per cent
France's CAC 40 +1.25 per cent
Stoxx 600 +0.57 per cent
Commodities:
WTI crude oil (Nymex May) -0.76 per cent at $47.24 (U.S.) a barrel
Natural gas (Nymex May) -0.30 per cent at $2.632
Gold (Comex Apr) +0.07 per cent at $1,184.00 (U.S.) an ounce
Copper (Comex May) +0.07 per cent at $2.742 (U.S.) a pound
Currencies:
Canadian dollar at 78.87 (U.S.), up 0.0003
U.S. dollar index down 0.008 at 98.349
Bonds:
U.S. 10-year Treasury yield 1.9083 per cent, down 0.0148
ECONOMIC INDICATORS:
U.S. ADP employment report showed 189,000 private-sector jobs were added in March, below the consensus estimate for growth of 225,000.
(9:45 a.m. ET) U.S. PMI manufacturing index.
(10 a.m. ET) U.S. ISM manufacturing index Consensus is 52.5 in March, down from 52.9 in February.
(10 a.m. ET) U.S. construction spending. Consensus is a decline of 0.2 per cent in February.
(10:30 a.m. ET) EIA petroleum status report
Canadian and U.S. auto sales for March are tentatively scheduled to be released.
STOCKS TO WATCH:
Royal Bank of Canada has entered into a definitive agreement to sell its operations in Suriname to Republic Bank Limited. Financial terms were not disclosed, though RBC indicated the selling price reflects the book value of that business. Management expects to transaction to result in a $23-million loss both before and after taxes.
COM DEV International Ltd. announced an agreement to buy Pacific Waves Systems for $20.1-million (U.S.) in cash that will be financed by funds on hand and tapping an available credit facility. Management expects the deal to be accretive to earnings per share this year.
Grocer Metro Inc. indicated that it plans to buy back up to 5.25-million common shares at discounts to the current market price through private agreements.
Regulators in South Africa are investigating whether Bombardier Inc. paid bribes in order to win a $3-billion train contract, CBC News is reporting.
Monsanto Company reported second-quarter ongoing earnings per share of $2.90 (U.S.), three cents below the consensus estimate.
Laurentian Bank holds its annual general meeting in Montreal.
Fortis Inc. is hosting a U.S. investor day in New York City.
Other earnings include: Acuity Brands, Progress Software, Sportsman's Warehouse.
ANALYST ACTIONS:
Ithaca Energy Inc. was upgraded to "buy" from "hold" at Mackie.
Tahoe Resources Inc. was raised to "outperform" from "market perform" at Raymond James.
Empire Co. Ltd. was upgraded to "outperform" from "sector perform" by National Bank Financial.
Domtar Corp. was lowered to "neutral" from "buy" at D.A. Davidson.
American Airlines Group Inc. was downgraded to "hold" from "buy" at Deutsche Bank.
Twitter Inc. was initiated with a "buy" rating and price target of $65 (U.S.) by Jefferies.