Before the Bell: What every Canadian investor needs to know today
Wall Street futures moved higher early Tuesday as markets weigh results from big U.S. retailers. Major European markets were positive in morning trading. TSX futures gained as crude prices edged higher.
In the early premarket period, Dow and S&P futures were each up by more than 1 per cent while Nasdaq futures advanced more than 2 per cent. On Monday, U.S. stocks put in a mixed session with the Nasdaq losing 1.2 per cent and the S&P 500 falling 0.39 per cent. The Dow edged up 0.08 per cent. Canada’s S&P/TSX Composite Index outperformed, advancing 0.53 per cent on a rally in energy shares.
“Markets remain in fight or flight mode while rolling the dice on recession odds,” Stephen Innes, managing partner with SPI Asset Management, said.
“Still, traders seem to be in the mood to stay bearish until proven otherwise.”
Early Tuesday, investors got results from Home Depot and Walmart as U.S. earnings season continues to wind down.
Home Depot hiked its full-year sales forecast on demand for home improvement tools and building materials. The retailer now expects comparable sales to increase about 3 per cent in fiscal 2022, compared to its previous forecast of a slight positive growth. Analysts were expecting a 1.4-per-cent increase, according to IBES data from Refinitiv.
However, Walmart cut its full-year profit forecast. The company said it expects fiscal 2023 earnings per share to fall about 1 per cent, compared to its previous forecast of a mid-single digit increase.
Meanwhile, Elon Musk’s US$44-billion bid to buy Twitter Inc. remains in the spotlight with Mr. Musk saying the deal can’t move forward until the social media company shows proof that spam bots account for less than 5 per cent of its total users.
“My offer was based on Twitter’s SEC filings being accurate. Yesterday, Twitter’s CEO publicly refused to show proof of <5% (spam accounts). This deal cannot move forward until he does,” Musk said in a tweet.
On Monday, Mr. Musk suggested he could seek a cheaper price for the deal, telling a conference in Miami: “You can’t pay the same price for something that is much worse than they claimed.” Last week, Mr. Musk said the Twitter deal was on hold pending further user data from Twitter.
In this country, The Globe’s Alexandra Posadzki reports that Quebecor Inc. chief executive officer Pierre Karl Péladeau is crediting recent regulatory decisions with encouraging competition in the wireless sector, as Quebecor’s Videotron Ltd. subsidiary prepares to expand its mobile services beyond its home province of Quebec.
Overseas, the pan-European STOXX 600 rose 1.6 per cent in morning trading. Britain’s FTSE 100 gained 0.76 per cent. Germany’s DAX and France’s CAC 40 advanced 1.46 per cent and 1.37 per cent, respectively.
In Asia, Japan’s Nikkei finished 0.42-per-cent higher. Hong Kong’s Hang Seng jumped 3.27 per cent as Chinese tech shares surged.
S&P 500 FUTURES
TSX 60 FUTURES
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Crude prices were up in early going helped by optimism over the potential for further easing of COVID-19 restrictions in China and continued efforts in the EU to gradually phaseout Russian crude.
The day range on Brent is US$113.64 to US$115.14. The day range on West Texas Intermediate is US$113.49 to US$114.98.
“Oil prices have remained near multi-week highs this week, supported by surging gasoline and distillate prices in the U.S., and fears around an EU ban on Russian oil imports remaining in play,” OANDA senior analyst Jeffrey Halley said.
Sentiment was underpinned by reports that Shanghai marked a third consecutive day with no new COVID-19 cases outside quarantine zones. Shanghai plans to resume outdoor activities in stages, with most restrictions on movement remaining in place until May 21. The lockdown is likely to be lifted by June.
Markets have been nervously watching the situation in China, concerned that tough COVID-19 restrictions will hit demand and weigh on the broader economy.
Later in the session, traders will get weekly crude inventory numbers from the American Petroleum Institute. More official numbers follow on Wednesday morning from the U.S. Energy Information Administration.
Analysts are expecting to see a further decline in crude stocks.
In other commodities, gold prices steadied.
Spot gold was up 0.1 per cent at US$1,826.29 per ounce by early Tuesday morning. U.S. gold futures gained 0.6 per cent to US$1,825.00.
“The yellow metal has been very vulnerable to rising yields and a stronger [U.S.] dollar recently as central banks are forced into much more aggressive action,” OANDA senior analyst Craig Erlam said in a note.
“With the dollar remaining a hot favourite and pressure intensifying on central banks to tackle inflation, gold could remain out of favour for a while yet.”
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The Canadian dollar was higher, trading around 78 US cents, as its U.S. counterpart eased for a third session against a group of world currencies.
The day range on the loonie is 77.79 US cents to 78.08 US cents.
There were no major Canadian economic releases on Tuesday’s calendar. In the U.S., Federal Reserve chair Jerome Powell will speak at a conference this afternoon on the central bank’s plan for taming inflation.
In world currencies, the U.S. dollar index was down 0.39 per cent to 103.76, more than 1-per-cent below last week’s two-decade high of 105.010, according to figures from Reuters.
The euro rose 0.4 per cent to US$1.0476.
The yen was 0.24-per-cent lower at 129.41 per U.S. dollar, holding above a two-decade low while Britain’s pound jumped 1.2 per cent to US$1.2469.
In bonds, the yield on the benchmark U.S. 10-year note was modestly higher at 2.913 per cent in the predawn period.
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(8:30 a.m. ET) Canada’s international securities transactions for March.
(8:30 a.m. ET) U.S. retail sales for April.
(9:15 a.m. ET) U.S. industrial production for April.
(10 a.m. ET) U.S. NAHB Housing Market Index for May.
(10 a.m. ET) U.S. business inventories for March.
With Reuters and The Canadian Press