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 in the red ahead of the open as investors await quarterly updates from a number of large companies, including three members of the Dow Jones industrial average.
Two of the best-known U.S. consumer brands that also generate a significant amount of revenues abroad, McDonald's Corp. and The Coca-Cola Company, are slated to release their quarterly results on yet another jam-packed day of earnings.
The FHRA house price index for the month of April will be released at 9:00 a.m. ET, while existing home sales for the month of March come out at 10:00 a.m. A robust recovery in housing has been largely missing in action since the financial crisis, though demographic factors and strong payroll growth seem to portend a pick-up in this segment that has, so far, been elusive. The volume of total mortgage applications rose by 2.3 per cent for the week ending April 17 relative to the previous week, with new purchase applications fuelling the bulk of the increase – a positive sign for overall housing activity.
S&P/TSX 60 futures are also moving lower in the pre-market trade.
West Texas Intermediate futures are also trading to the downside ahead of the weekly inventory and production report.
After last week's smaller-than-anticipated build, there's been chatter that more refining inventory coming on line might produce a draw-down in stockpiles, which would presumably offer support for the price of oil. U.S. domestic production, which has fallen in two of the past three readings, will also be closely watched.
In Asia, Japan's Nikkei closed above 20,000 for the first time since 2000. Both domestic consumer staples and large international exporters have contributed to the index's strong showing this year.
Japanese companies have traditionally kept a bevy of cash on hand; widespread moves to return capital to shareholders may help keep the benchmark Japanese index above this psychological level, though policymakers would prefer for management to give their employees a raise in order to help break the deflationary swoon for good.
The Shanghai Composite index continues to go parabolic after a brief breather on Monday, rising 2 per cent, while stocks in Hong Kong posted a more modest advance.
European stocks, meanwhile, largely gave back ground as concerns over Greece and lackluster earnings reports weighed on sentiment.
Here's a look at the latest market numbers and other highlights ahead of the trading day.
Futures:
S&P 500 -0.22 per cent; Dow -0.31 per cent; Nasdaq -0.15 per cent
Equities:
Hong Kong's Hang Seng +0.3 per cent
Shanghai composite index +2.44 per cent
Japan's Nikkei +1.13 per cent
London's FTSE 100 -0.59 per cent
Germany's DAX -0.82 per cent
France's CAC 40 -0.36 per cent
Stoxx 600 -0.33 per cent
Commodities:
WTI crude oil (Nymex May) -0.76 per cent at $56.18 (U.S.) a barrel
Natural gas (Nymex May) +1.24 per cent at $2.607
Gold (Comex Jun) -0.04 per cent at $1,202.60 (U.S.) an ounce
Copper (Comex May) -0.35 per cent at $2.696 (U.S.) a pound
Currencies:
Canadian dollar at 81.73 (U.S.), up 0.0031
U.S. dollar index down 0.333 at 97.671
Bonds:
U.S. 10-year Treasury yield 1.907 per cent, down 0.0018
ECONOMIC INDICATORS:
(10 a.m. ET) U.S. existing home sales for March. Consensus is 5.03 million (adjusted annual rate) or a 3.1-per-cent increase from February.
(10:30 a.m. ET) U.S. EIA petroleum status report.
STOCKS TO WATCH:
McDonald's Corp. posted first-quarter adjusted earnings per share of $1.01, five cents shy of the consensus estimate. Revenues were marginally above the Street's call. Same-store global sales fell 2.3 per cent compared to the first quarter of 2014, a larger decline than analysts expected. The quick service restaurant chain indicated that it was developing a turnaround plan and would unveil the initial details of this on May 4th.
The Coca-Cola Company booked a first-quarter profit that exceeded analysts' expectations as pricing inflation did not deter customers from purchasing its beverages. Revenues were slightly higher than anticipated. Management reiterated that 2015 will serve as a "transition year" for the company. Shares are rising in the pre-market trade.
The Boeing Company reported adjusted earnings per share of $1.97 for the first three months of the year, well above the consensus estimate. Though revenues rose by more than 8 per cent compared to the same period in 2014, at $22.15-billion, they came in more than $300-million shy of the Street's call.
Yahoo! Inc. reported first-quarter adjusted earnings per share of 15 cents (U.S.), three cents below the consensus estimate, while revenues fell by more than analysts had anticipated. However, during the conference call on Tuesday after the close, chief executive officer Marissa Mayer indicated that the firm had hired advisers to investigate a possible sale of its Japanese division, which helped give the shares a bid in the after-hours session despite these underwhelming results.
After the close on Tuesday, Chipotle Mexican Grill Inc. posted profits that exceeded analysts' expectations. However, sales, the more closely-watched metric for the fast-growing quick service restaurant, came in shy of the consensus estimate, with same-store sales rising less than anticipated. Shares fell in the after-hours session.
Earnings slated for Wednesday include: Abbott Laboratories; Ameriprise Financial Inc.; Assurant Inc.; Atrium Mortgage Investment Corp; AT&T Inc.; AutoNation Inc.; Bank of New York Mellon Corp.; Boeing Company; Cheesecake Factory Inc.; Citizens Financial Group Inc.; Citrix Systems Inc.; Coca-Cola Company; Crown Castle Intl Corp; Danier Leather Inc.; eBay Inc.; EMC Corp.; Equifax Inc.; Espial Group Inc.; Exco Technologies Ltd.; Facebook Inc.; Flowserve Corp.; Gentex Corp.; Logitech Intl S.A.; McDonald's Corp.; Metro Inc.; Mullen Group; Nielsen N.V.; Owens Corning; QUALCOMM Inc.; Raymond James Financial Inc.; TE Connectivity Ltd.; Texas Instruments Inc.; Toromont Industries Ltd.; Transforce Inc.
ANALYST ACTIONS:
Rogers Communications Inc. was upgraded to "buy" from "neutral" at Bank of America.
Agrium was downgraded to "sell" from "neutral" at Citigroup.
Black Diamond Group Ltd. was downgraded to "market perform" from "outperform" by Raymond James.
Trican Well Service Ltd. was lowered to "underperform" from "market perform" at Raymond James.
Encana Corp. was initiated with a "buy" rating at Nomura.
Catamaran Corp. was lowered to "hold" from "buy" at Maxim Group.