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.
Just when you think that the markets have adjusted to the idea of a Fed taper in the months ahead, they go wild. U.S. stocks were hammered on Wednesday, and the ripples could be seen in overseas trading on Thursday.
European stocks were down about 0.6 per cent, taking them to two-month lows. In Japan, the Nikkei 225 fell 1.1 per cent in overnight trading. As for futures activity, the Dow Jones industrial average was down about 0.1 per cent, a sign of moderation following the 130-point dip yesterday. Stock futures came off their lows from this morning as the U.S. reported an unexpected jump in jobless claims. (See how all the morning data came in below in our Economic Indicators section.)
The volatility seems to flow from the idea that the Federal Reserve is going to view upbeat economic data and a budget agreement in Washington as the go-ahead for cutting back on its monthly bond purchases – perhaps as early as next week, when it concludes a two-day monetary policy meeting on Wednesday.
Famed Canadian retailer Lululemon is having a tough morning, with shares off 10 per cent in the premarket after revealing weak fourth-quarter guidance. Meanwhile, keep an eye on Facebook Inc. The social media company, which went public just last year, has been added to the S&P 500, giving its credibility as a blue-chip stock a big boost.
Here's a closer look at what's going on this morning and what is to come.
MARKETS:
Equities:
Futures: S&P 500 -0.10 per cent; Dow -0.13 per cent; Nasdaq -0.10 per cent; S&P Toronto -0.33 per cent
Hong Kong's Hang Seng -0.52 per cent
Shanghai composite index -0.05 per cent
Japan's Nikkei -1.12 per cent
London's FTSE 100 -0.96 per cent
Germany's DAX -0.72 per cent
France's CAC 40 -0.34 per cent
Commodities:
WTI crude oil (Nymex Jan) +0.33 per cent at $97.76 (U.S.) a barrel
Gold (Comex Feb) -1.72 per cent at $1,235.90 (U.S.) an ounce
Copper (Comex Mar) -0.15 per cent at $3.29 (U.S.) a pound
Currencies:
Canadian dollar at 94.59 (U.S.), vs. 94.40 at Wednesday's North American close.
U.S. dollar index up 0.01 at 79.91
Bonds:
U.S. 10-year Treasury yield 2.85 per cent, down 0.01
ECONOMIC INDICATORS:
U.S. jobless claims for last week rose to 368,000 from 298,000 the previous week, much greater than the 320,000 expected by the market. But the holidays may have distorted the numbers.
U.S. retail sales in November rose 0.7 per cent, a little better than the Street estimate of 0.6 per cent.
Canada's new housing price index rose 0.1 per cent in October, matching the Street estimate. In September, it was flat.
Canada's capacity utilization rate in the third quarter was 81.7 per cent from the second, a bit higher than the 81.0 per cent forecast by the Street.
(10 a.m. ET) U.S. releases business inventories for October, forecast to rise 0.3 per cent after gaining 0.6 per cent the previous month.
STOCKS TO WATCH:
Lululemon shares are down 10 per cent in the premarket after the company reported third-quarter earnings that beat Street expectations but disappointingly said sales in the fourth quarter will be flat at between 78 cents and 80 cents. Analysts had expected earnings at 84 cents for the fourth quarter.
Transat reported fiscal fourth-quarter adjusted EPS of $1.40 vs. the $1.00 Street estimate. Revenues topped expectations too.
BRP reported a 52 per cent hike in quarterly profit to 50 cents per share on an adjusted basis, beating the Street view of 42 cents. It also raised its adjusted earnings forecast to $1.49 to $1.54 per share from $1.45 to $1.50.
Other earnings today include: Empire, Adobe Systems, and Ciena.
Hilton Worldwide Holdings will make its stock market debut after pricing its initial public offering at $20 (U.S.) per share.
Facebook shares are up 3.8 per cent in the premarket. The stock is being added to the S&P 500 index later this month.
ANALYST ACTIONS:
CIBC World Markets downgraded Hudson's Bay to "sector performer" but kept a $20 price target because of the value of the company's real estate. Similarly, BMO Nesbitt Burns downgraded Hudson's Bay to "market perform" on its disappointing third quarter and outlook. BMO maintained a $21 price target.
AltaCorp downgraded Encana to "sector perform" from "outperform" and sliced its price target to $22.50 (U.S.) from $25.
CIBC World Markets downgraded Painted Pony Petroleum to "sector performer" and cut its price target to $9 (Canadian) from $13
Desjardins Securities raised its price target on Canadian National Railway to $63 (Canadian) from $59 and reiterated a "buy" rating.
Canaccord Genuity hiked its target on SNC-Lacalin to $59 (Canadian) from $54 and reiterated a "buy" rating.
Industrial Alliance downgraded The North West Co. to "hold" from "buy" but maintained a $27 (Canadian) price target.
Canaccord Genuity cut its target on Fortis to $31 (Canadian) from $34 and maintained a "hold" rating.
Desjardins Securities cut its price target on Southern Pacific Resource to 10 cents (Canadian) from 50 cents and maintained a "hold" rating.
Canaccord Genuity raised its target on Mainstreet Equity to $37 (Canadian) from $32.35 and maintained a "hold" rating.
Berstein initiated coverage on Teck Resources with a "market perform" rating and $25 (Canadian) price target.
Bernstein initiated coverage on Freeport-McMoRan with an "outperform" rating and $42 (U.S.) price target.
Macquarie initiated coverage on TransAlta with an "outperform" rating and $14.75 (U.S.) price target.
RBC Dominion Securities downgraded Scripps Networks Interactive to "sector perform" from "outperform" and kept an $85 (U.S.) price target.
THIS MORNING'S TOP INVESTING LINKS:
How the big U.S. banks fared in their 2013 market predictions.
Take note income investors: Jeff Gundlach is not in any hurry to buy mortgage REITs.
Three reasons why Twitter is hitting record highs.
Microsoft may finally be getting it right in tablet computing.
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For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities.