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 nearly unchanged ahead of the open after the Dow Jones and S&P 500 gave back a bit of ground on Monday. West Texas Intermediate futures remain below the $50 per barrel (U.S.) mark after choppy trade on Monday, while S&P/TSX 60 futures are pointing towards a slightly lower open on Bay Street. The Canadian financial sector could see renewed selling after the Bank of Montreal, the first bank to reveal fiscal first-quarter results, reported lower-than-expected earnings. Adjusted EPS missed the Street consensus by 10 cents.
North American central bankers will be in the spotlight today as Federal Reserve Chair Janet Yellen testifies before the Senate. The minutes from the central bank's meeting in January, released last week, suggested that a number of monetary policymakers were uncertain that inflation was poised to return to its desired level, and led the market to believe that the first rate hike would not come as soon as some expected (in June).
However, January's meeting came before the publication of robust payroll figures for the month, which included a marked pick-up in wage growth. So the data-dependent central bank now has another month of data to incorporate into its framework, and any shift in opinion since the latest meeting is likely to be reflected in Ms. Yellen's testimony this morning.
"There is perhaps an air of anticipation given the real momentum in the labour market of late, while we have seen Federal Reserve members Bullard, Williams, Plosser, Mester and Lacker all talking up the prospects of a normalisation of policy," writes IG chief market strategist Chris Weston. "We have seen Walmart stating they will make quite a punchy increase to wages starting from April, while wage hikes have also been seen at the likes of Ikea, Starbucks and Gap. Corporate America is raising wages and the Fed will be cognisant of this."
The U.S. dollar and Treasury yields are rising ahead of the Chair's remarks.
Meanwhile, Bank of Canada Governor Stephen Poloz will deliver a speech in London this afternoon. As the governor and his colleagues are widely expected to lower the Bank of Canada's overnight rate again in early March, his comments could meaningfully impact the Canadian dollar and fixed income.
Over in Europe, Greece has submitted its list of reform proposals to the Eurogroup. Dutch Finance Minister Jeroen Dijsselbloem, who is also president of the group, indicated that he had a positive first impression of Athens' list.
European stocks are mixed, while the Athens Stock Exchange is on a tear, up more than 7 per cent on the day.
However, headline inflation in the euro area fell by 0.6 per cent year-over-year in January, with 17 of 19 nations seeing prices decline on an annual basis. The data served as a reminder that despite recent green shoots, all is not well on the continent, and also reinforced the prudence of the European Central Bank's decision to add stimulus starting next month.
Details on upcoming economic data, market performance, and stocks to watch can be found below.
MARKETS:
Futures:
S&P 500 +0.2 per cent; Dow +0.09 per cent; Nasdaq -0.01 per cent; TSX 60 -0.1 per cent
Equities:
Hong Kong's Hang Seng -0.38 per cent
Shanghai composite index Closed for holiday
Japan's Nikkei +0.74 per cent
London's FTSE 100 +0.16 per cent
Germany's DAX -0.01 per cent
France's CAC 40 -0.08 per cent
Stoxx 600 +0.14 per cent
Commodities:
WTI crude oil (Nymex Apr) +0.57 per cent at $49.73 (U.S.) a barrel
Natural gas (Nymex Apr) -0.76 per cent at $2.857
Gold (Comex Apr) -0.21 per cent at $1,198.30 (U.S.) an ounce
Copper (Comex May) +0.29 per cent at $2.594 (U.S.) a pound
Currencies:
Canadian dollar at 79.17 (U.S.), down 0.0038
U.S. dollar index up 0.168 at 94.737
Bonds:
U.S. 10-year Treasury yield 2.0714 per cent, up 0.014
ECONOMIC INDICATORS:
The S&P Case-Shiller Home Price Index rose 4.5 per cent year-over-year in December, bettering the consensus estimate by 0.2 percentage points.
(10 a.m. ET) Fed Chair Yellen's semi-annual monetary policy testimony to the Senate Banking Committee.
(10 a.m. ET) U.S. Conference Board consumer confidence index. Consensus is for 99.5.
(2 p.m. ET) Bank of Canada Governor Poloz speaks at Western University in London and holds 315 p.m. news conference.
STOCKS TO WATCH:
Bank of Montreal posted adjusted earnings per share of $1.53 in its fiscal first quarter, missing the consensus estimate by 10 cents.
Home Depot Inc. posted adjusted earnings per share of $1.00 in the fourth quarter, well above the consensus estimate of $0.89, while revenues also exceeded expectations. Management also boosted the home improvement retailer's quarterly dividend to $0.59 per share from $0.47, and outlined plans to repurchase $4.5-billion worth of its own shares this year.
Canadian National Railway Co. reached a tentative deal with one of its unions to avoid a lock out and keep the railway running at full capacity.
Toll Brothers beat Street expectations for its latest quarter and shares are up 4 per cent in premarket trading.
Other earnings include: Comcast; Cott; Domino's Pizza; Dynegy; First Solar; Hertz Global Holdings; Hewlett-Packard; Macy's; Office Depot; Valeant; 5N Plus; Altus Group; Choice Properties; Equitable Group; First National; Kinaxis.