The Before the Bell report is constantly updated to reflect the latest news developments and market moves in the premarket. Check back later for updates.
U.S. and Canadian stock futures are on the rise this morning after markets got a shot of better-than-expected economic news out of Europe and China at a time when slowing activity in those regions have been a key concern. Some key earnings beats in the U.S. - including Dow component Caterpillar - are helping stock futures to extend gains. S&P 500 futures are up about 0.70 per cent and TSX futures about 0.6 per cent.
China's HSBC flash manufacturing purchasing manager's (PMI) index rose to a three-month high of 50.4 in October - not exactly a robust reading, but enough to exceed market forecasts. Stocks in China nevertheless lost ground overnight amid concerns that new initial public offerings may dilute funds heading into existing equities, and there were reports a planned stock-trading link with Hong Kong may be delayed.
The euro zone factory PMI came in at 50.7 for this month, up from the last reading of 50.3. Economists were looking for a reading of just below 50, which separates expansion from contraction. There were some other upbeat economic reports out of Europe as well: Spain's third-quarter unemployment dropped to the lowest level since 2011, and in Germany, factories rebounded from a slump in September. Added up, today's data suggest the euro zone recovery has at least not completely ground to a halt.
The U.S. will release its own PMI reading later this morning, and has already reported weekly jobless claims largely in line with expectations.
But today's main focus is likely to be on earnings. It's one of the busiest of the third-quarter season, and we have some key highlights below in our Stocks to Watch section, including beats by Caterpillar and General Motors.
Heading into this morning, just over 41 per cent of the S&P 500's market cap have reported. So far, earnings are beating by 4.2 per cent while revenues have surprised by 0.8 per cent, according to RBC estimates. Earnings results have not been even, with the recent rally in the greenback appearing to account for that: Domestically-oriented companies in the U.S. are on track to grow earnings by 9.1 per cent vs. 1.5 per cent for more global names and are beating by a greater percentage: 5.5 per cent vs 0.9 per cent, RBC notes.
Now, here's a closer look at what's going on this morning and what is still to come.
MARKETS:
Futures:
S&P 500 +0.69 per cent; Dow +0.75 per cent; Nasdaq +0.72 per cent; S&P/TSX +0.62 per cent
Equities:
Hong Kong's Hang Seng -0.30 per cent
Shanghai composite index -1.06 per cent
Japan's Nikkei -0.37 per cent
London's FTSE 100 -0.11 per cent
Germany's DAX +0.39 per cent
France's CAC 40 +0.51 per cent
Stoxx 600 +0.27 per cent
Commodities:
WTI crude oil (Nymex Dec) +0.72 per cent at $81.26 (U.S.) a barrel
Natural gas (Nymex Jan) -0.57 per cent at $3.81 (U.S.)
Gold (Comex Dec) -0.92 per cent at $1,234.20 (U.S.) an ounce
Copper (Comex Dec) +0.48 per cent at $3.03 (U.S.) a pound
Currencies:
Canadian dollar at 88.90 (U.S.), down 0.0004
U.S. dollar index down 0.04 at 85.69
Bonds:
U.S. 10-year Treasury yield 2.23 per cent, up 0.02
ECONOMIC INDICATORS:
U.S. jobless claims came in at 283,000 last week, up by 17,000, vs. estimates for 281,000
U.S. FHFA house price index rose 0.5 per cent in August, ahead of expectations of 0.3 per cent and the previous month's reading of 0.1 per cent.
(945 a.m. ET) U.S. Markit Flash Manufacturing PMI for October.
STOCKS TO WATCH:
Rogers Communications reported Q3 adjusted EPS of 78 cents (Canadian) vs. Street estimate 88 cents. Revenue matched estimates and it reaffirmed its profit forecasts for the year.
Shaw Communications reported Q4 EPS of 40 cents (Canadian) vs. the estimated 37 cents.
Cenovus Energy reported Q3 EPS of 49 cents vs. Street estimate of 42 cents.
Potash Corp cut its full-year guidance as it reported Q3 EPS of 38 cents, vs. estimates for 42 cents.
Husky Energy reported Q3 adjusted EPS of 50 cents versus the estimated 59 cents.
Caterpillar reported Q3 EPS of $1.72 (U.S.) vs. estimates of $1.36. It also beat on revenues and raised its guidance for the year. Shares are up nearly 5 per cent in the premarket.
3M topped Q3 earnings expectations by 2 cents and lifted its fiscal year 2014 profit outlook.
General Motors reported adjusted Q3 EPS of 97 cents, beating the Street consensus by 2 cents. The stock is up nearly 3 per cent in the premarket.
Dunkin' Brands Group reported adjusted third-quarter profits of 49 cents, beating the Street view of 47 cents. But the restaurant chain operator warned that it may have trouble reaching its sales targets for the year and shares are down more than 6 per cent in the premarket.
Comcast beat earnings expectations by 2 cents.
Eli Lilly and Co. reported adjusted profit of 66 cents a share, a penny below Street estimates.
Union Pacific reported Q3 EPS of $1.53 (U.S.) versus estimates for $1.51.
U.S. homebuilder PulteGroup reported a 4 per cent rise in its quarterly revenue from home sales and raised its quarterly dividend to 8 cents (U.S.) from 5 cents.
Other earnings today include: Alamos Gold; Corus Entertainment; Domtar; IMAX; AllianceBernstein; Altera; Amazon.com; Basic Energy Services; Celgene; Comcast; Credit Suisse Group; Diamond Offshore Drilling; Dolby Laboratories; Domtar; Dr. Pepper Snapple Group; Edwards Lifesciences; JetBlue Airways; Juniper Networks; KKR & Co.; KLA-Tencor; Lorillard; Microsoft; Nielsen; Nokia; Nucor; Occidental Petroleum; Pandora Media; Patterson-UTI Energy; Precision Castparts; Raytheon Company; Reliance Steel & Aluminum; Southern Copper; Southwest Airlines; United Continental Holdings.
Brookfield Asset Management Inc. announced that it has made a proposal to Brookfield Residential Properties to acquire the approximately 30 per cent of common shares of Brookfield Residential that it does not own (about 36.8 million shares) for $23 (U.S.) cash per share.
Penn West Petroleum has agreed to sell some of its Alberta non-core assets for about $355 million to an unidentified private company.
ANALYST ACTIONS:
RBC upgraded TransAlta Renewables to "outperform" from "sector perform" and hiked its price target to $14 (Canadian) from $12.
Raymond James upgraded Mullen Group to "market perform" from "underperform" and hiked its price target to $27.50 (Canadian) from $25.
Jefferies upgraded Alcatel-Lucent to "hold" from "underperform" but cut its price target to $2.53 (U.S.) from $3.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
A summary of stock picks from hedge fund managers at the Robin Hood Investors Conference.
Lies investors tell themselves.
Low mortgage down payments are coming back in the U.S.
Five U.S. ETFs that are crushing their indexes.
How Bill Ackman made the trains run on time in Canada.
Why the stock market rally is bad news.
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Have feedback on our daily Before the Bell report and suggestions on how to make it more useful in your investing day? Please contact Inside the Market Editor Darcy Keith at dakeith@globeandmail.com.
Darcy Keith