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.
Equity futures are slightly lower after U.S. indexes set records on Tuesday.
The retreat in the U.S. dollar index and gains in precious metals suggest the Asian markets view Fed Chair Janet Yellen's testimony Tuesday as dovish; on the other hand, shorter-term U.S. Treasuries have weakened, which indicates the opposite. She'll provide a second day of testimony today.
"The idea of when the Federal Reserve lifts rates has transfixed markets and rightly so; it is a big deal," said IG chief market strategist Chris Weston. "There are so many market dislocations and these will be exposed if we get the signal from the Fed that they are ready to start a normalisation process. Janet Yellen's dialogue to Congress has been described as 'vague' but there is probably enough in the rhetoric for both the hawks and doves."
Concerns over political turmoil in Europe emanating from Greece have largely faded after officials in the European Commission agreed that Athens' list of reforms were "sufficiently comprehensive to be a valid starting point."
European stocks are, for the most part, in the red on Wednesday.
Meanwhile, the Shanghai Composite reopened after the Lunar New Year holidays and gave back ground.
Along with playing catch-up, traders are also reacting to the HSBC China Flash Manufacturing Purchasing Managers' Index, which came at 50.1, besting the consensus estimate for a reading of 49.5. Readings below 50 indicate the sector is contracting, while prints above this level point to expansion in the sector.
While the new orders and output sub-indexes showed an increase in the rate of growth, new export orders shrank and employment deteriorated at a faster pace than in January.
In Canada, oil prices and the financials will continue to dominate the discussion today amid a heavy slate of corporate earnings. West Texas Intermediate spent the better part of Tuesday hovering around the $50 per barrel (U.S.) mark, and is trading about 50 cents below that level this morning.
Better-than-expected earnings from the Royal Bank of Canada and National Bank of Canada may help turn sentiment on the Canadian financials after the Bank of Montreal posted an earnings miss on Tuesday.
Here's a look at the latest market numbers and other highlights ahead of the trading day.
Futures:
S&P 500 -0.12 per cent; Dow -0.03 per cent; Nasdaq -0.16 per cent; TSX 60 down 0.1 per cent
Equities:
Hong Kong's Hang Seng +0.11 per cent
Shanghai composite index -0.56 per cent
Japan's Nikkei -0.1 per cent
London's FTSE 100 -0.26 per cent
Germany's DAX -0.11 per cent
France's CAC 40 -0.32 per cent
Stoxx 600 -0.19 per cent
Commodities:
WTI crude oil (Nymex Apr) +0.57 per cent at $49.56 (U.S.) a barrel
Natural gas (Nymex Apr) +0.14 per cent at $2.906
Gold (Comex Apr) +0.96 per cent at $1,208.80 (U.S.) an ounce
Copper (Comex May) -0.19 per cent at $2.6345 (U.S.) a pound
Currencies:
Canadian dollar at 80.48 (U.S.), up 0.0042
U.S. dollar index down 0.234 at 94.259
Bonds:
U.S. 10-year Treasury yield 1.9731 per cent, down 0.0069
ECONOMIC INDICATORS:
(10 a.m. ET) Fed Chair Yellen's semi-annual monetary policy testimony to the House Financial Services Committee.
(10 a.m. ET) U.S. new home sales for January. Consensus is for a 2.3 per cent fall to an annualized rate of 470,000.
STOCKS TO WATCH:
The Royal Bank of Canada recorded earnings per share of $1.65 in its fiscal first quarter, besting the consensus estimate by 10 cents. Management also bumped the quarterly payout up by 3 per cent to $0.77 per share.
National Bank of Canada posted earnings per share of $1.16 in its fiscal first quarter, ahead of analysts' expectations for $1.12.
Magna International Inc. announced plans to hike its dividend by 16 per cent to $0.44 (U.S.) and split its stock two-for-one. In the fourth quarter, the auto parts maker reported earnings per share of $2.44, 20 cents higher than the consensus estimate.
Encana Corp. posted operating earnings per share of $0.05 in the fourth quarter, well below the consensus estimate for $0.21 . The company also trimmed its capital budget by roughly $700-millino to a range of $2 to $2.2-billion.
Hudson's Bay Co. is joining forces with RioCan Real Estate Investment Trust and Simon Property Group to form joint ventures that unlock value from its real estate holdings. The retailer plans to use the proceeds from its partners to reduce debt.
Target Corp. exceeded analysts' estimates on both profits and revenues in the fourth quarter. However, the upper end of its guidance range for full-year earnings in 2015 is barely within the consensus call.
Shares of Lowe's Companies Inc. are moving higher in the pre-market after the company reported better than expected earnings in the fourth quarter and indicated that full-year 2015 sales would be stronger than the Street had anticipated.
Other earnings today include: Ballard Power Systems; Bill Barrett; Campbell Soup; Chesapeake Energy; Dollar Tree; Encana; Liberty Media; Lowe's Companies; SodaStream International; Target; TC Pipelines; Transocean; TJX Cos.; Western Gas Partners; Workday; Calfrac Well; Clearwater Seafoods; Extendicare; MacDonald Dettwiler; National Bank of Canada; Sears Canada; Tricon Well.
ANALYST ACTIONS:
BHP Billiton Ltd. was downgraded to "neutral" from "buy" at Citigroup, but raised to "outperform" from "neutral" by Macquarie.
First Solar was upgraded to "neutral" from "underperform" at Merrill Lynch.
Iamgold Corp. was upgraded to "overweight" from "underweight" at HSBC.