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.
North American equities are poised to open lower after the Dow Jones and S&P 500 closed at record highs to end last week.
On Friday afternoon, Greece and its creditors came to a four-month bailout extension agreement, pending an outline of reforms from Athens that are palatable to the European powers. This deal, as tenuous as it may be, has given European equities a lift on Monday despite news that Germany's Ifo business climate index rose by less than anticipated.
However, the length of this extension – four months, rather than the rumoured six – is significant, and tilts the balance of power in negotiations further away from Greece.
"Greece will also be cognisant that it faces €6.7 billion in bond redemptions in July and August; so unless there is firm agreement in the upcoming negotiations, then Greece will default," writes IG chief market strategist Chris Weston this morning.
In Asia, Japan's Nikkei index set a fresh 15-year high while the Shanghai Composite remains closed for the Lunar New Year holidays.
West Texas Intermediate crude oil futures are back below $50 (U.S.) per barrel this morning as a strong U.S. dollar and continued oversupply dragged on prices. S&P/TSX 60 futures are sharply lower ahead of the open, as weakness in oil will weigh on the energy-laden composite index.
Details on upcoming economic data, market performance, and stocks to watch can be found below.
MARKETS:
Futures:
S&P 500 -0.23 per cent; Dow -0.24; Nasdaq -0.04 per cent; TSX 60 -0.60 per cent
Equities:
Hong Kong's Hang Seng +0.02 per cent
Shanghai composite index Closed for holiday
Japan's Nikkei +0.73 per cent
London's FTSE 100 -0.32 per cent
Germany's DAX +0.34 per cent
France's CAC 40 +0.15 per cent
Stoxx 600 +0.30 per cent
Commodities:
WTI crude oil (Nymex Apr) -3.13 per cent at $49.22 (U.S.) a barrel
Natural gas (Nymex Apr) +2.27 per cent at $3.018
Gold (Comex Apr) -0.86 per cent at $1,194.50 (U.S.) an ounce
Copper (Comex May) -0.77 per cent at $2.571 (U.S.) a pound
Currencies:
Canadian dollar at 79.35 (U.S.), down 0.0043
U.S. dollar index up 0.52 at 94.773
Bonds:
U.S. 10-year Treasury yield 2.1196 per cent, up
0.0079
ECONOMIC INDICATORS:
(8:30 a.m. ET) The Chicago Federal Reserve releases its national activity index for January.
(10 a.m ET) U.S. existing home sales for January. Consensus is for a 1.6 per cent drop to an annual rate of 4.96 million.
STOCKS TO WATCH:
Valeant Pharmaceuticals International Inc. is buying U.S.-based Salix Pharmaceuticals Ltd., which specializes in treatments of gastrointestinal disorders, for $10.4-billion (U.S.) in cash. This transaction will be financed through bank debt and bonds. The Canadian pharma company expects to generate $500-million in synergies following this transaction. Valeant shares are up 7 per cent in the U.S. premarket.
HSBC booked profits of $18.7-billion in 2014, more than $2-billion shy of the consensus estimate, which weighed on its stock on Monday. The bank continues to be dogged by reports of its how its Swiss division helped clients evade taxes in the mid-2000s.
3M Co. has entered into an agreement to by Polypore International Inc.'s media business for $1-billion. This division has sales of $210-million over the past twelve months, and specializes in ultrafiltration membrane technology. This deal will be financed with cash on hand, most of which will come from outside the U.S., according to 3M.
Apple plans to invest nearly $2-billion in data centers in Europe that will be powered wholly by renewable energy.
Earnings include: Agrium; Express Scripts; First Majestic Silver; Nautilus; CT REIT; PrairieSky.
ANALYST ACTIONS:
Enerplus Corp. was downgraded to "hold" from "buy" at TD Securities and Desjardins Securities.
The Boeing Co. was cut to "sell"
from "neutral" by analysts at Goldman Sachs.
West Fraser Timber Co. Ltd.
was downgraded to "sector perform" from "outperform" at RBC Dominion Securities.
Colgate-Palmolive Co. was raised to "buy" from "neutral" at Citigroup Inc.
SNC-Lavalin Inc. was downgraded to "hold" from "buy" at TD Securities.
Precision Castparts Corp. was lowered to "neutral" from "buy" at Goldman Sachs.