Before the bell: what every Canadian investor needs to know today

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US equity futures were higher on Wednesday morning, as investors awaited the latest Federal Reserve political announcement later in the session as well as a reading on how the COVID-19 pandemic hit the US economy. in the first quarter. Abroad, the main European markets were mixed in morning trade. TSX futures were higher as crude prices recovered from recent losses.

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For markets, the US economy is at the forefront, with the Fed’s decision expected at 2 p.m. ET and first quarter GDP just before the opening bell.

Few fireworks are expected from the Fed, which has already cut rates to almost zero, although investors will seek a roadmap for recovery as economies begin to reopen. GDP, for its part, is expected to contract by almost 4% in the quarter as the spread of the virus stops huge sectors of the economy.

The country’s results will hit the headlines with major energy and retail companies. Cenovus, Husky Energy, Roots, Gildan Activewear and Maple Leaf Foods publish all of their results before trading begins.

South of the border, Boeing Co. delivers its latest results.

In pre-market trading, shares of Alphabet, the parent company of Google, rose more than 7% after the company announced a drop in sales of Google ads in April, with some consumers returning to use the search engine to do shopping. The results were released after Tuesday’s closing bell.

After the close, investors get results from Facebook, Microsoft and Tesla.

“Looking at the big picture, even if the S&P 500 has successfully maintained gains since the start of earnings announcements, this is mainly due to a few key growth stocks, including Amazon, which continue to boost the index higher , while not all companies are doing equally well relative to the benchmark, “said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, in a morning note.

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“In this sense, the main stock market indices may not reflect the true nature of market sentiment while profits are pouring in, especially provided that FAANG stocks, which represent up to 15% of the S&P 500 index, tend bias the index upward, as these stocks may not be as badly affected by the coronavirus lockout. ”

Abroad, the pan-European STOXX 600 changed little in the morning trade. The British FTSE 100 increased by 0.67%. The German DAX gained 0.20%. The French CAC 40 was down 0.13%.

In Asia, the Hang Seng in Hong Kong rose 0.28%. The Shanghai composite index added 0.44%. In Japan, markets were closed on a public holiday.

Raw materials

Crude oil prices were higher as a smaller-than-expected increase in inventories in the United States eased some storage problems, while the reopening of some economies fueled hopes for improved demand.

So far, the range of days on the Brent has been US $ 20.53 to US $ 21.60. The range on West Texas Intermediate is from US $ 12.67 to US $ 14.49.

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The American Petroleum Institute said on Tuesday evening that stocks of American crude oil rose 10 million barrels to 510 million barrels last week. Analysts expected a gain close to 10.6 million.

Gasoline inventories fell 1.1 million barrels compared to an expected increase of 2.5 million barrels.

“I never thought we would be excited about an inventory report of +10 million barrels,” said AxiCorp chief market strategist Stephen Innes.

He also said that the latest gains may reflect the market perception that demand has

“Meanwhile, OPEC + quotas are expected to take effect on Friday, May 1, suggesting that short-term supply conditions are likely to have peaked,” he said.

In other commodities, gold prices rose slightly following a weaker US dollar.

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Spot gold rose 0.2% to $ 1,711.31 an ounce after three consecutive sessions of decline. The US gold futures contract increased 0.3% to $ 1,727.50 an ounce.

“There is a movement out of the [U.S.] dollar because there is a lot of uncertainty around an event like the Fed meeting, and that kind of supports an intraday gold rally, “said the IG analyst. Markets, Kyle Rodda.

Currencies

The Canadian dollar rose in line with the stabilization of crude prices at the start.

The range of days on the loonie is 71.41 cents US to 71.78 cents US.

“The Canadian dollar extended its push against the US dollar modestly during the night’s session, as the CAD was lifted alongside the Australian dollar and the New Zealand dollar on the back of investor risk sentiment and , for CAD in particular, a slight gain in still low energy prices, “said Shaun Osborne, chief currency effects strategist for Scotiabank.

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Before the opening bell, Statscan released a survey of economic conditions and the impact of COVID-19. The agency has already given a first glimpse of the impact on March’s GDP, which contracted sharply.

In world markets, the US dollar fell against the major currencies to a two-week low.

Against a basket of rivals, the greenback fell 0.3% to 99.60 at the start of the day in London, just above the two-week low of 99.43 reached in the previous session, according to Reuters.

The euro climbed 0.4% to US $ 1.0862 before a meeting of the European Central Bank on Thursday.

More company news

Cenovus Energy On Wednesday, it suffered a quarterly loss, affected by a sharp drop in global demand for oil caused by the coronavirus epidemic and a price war between Saudi Arabia and Russia. Net loss was $ 1.80 billion, or $ 1.46 per share, in the first quarter ended March 31, compared to earnings of $ 110 million, or 9 cents per share, compared to the previous year.

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Husky energy posted a quarterly loss from a year ago profit and recorded $ 1.1 billion in impairments related to its producing assets as lower oil prices eroded their value. Net loss was $ 1.71 billion, or $ 1.71 per share, for the quarter ended March 31, compared to earnings of $ 328 million, or 32 cents per share, per year latest.

Boeing Co announced a loss for the second consecutive quarter and announced on Wednesday that it would further reduce production of the 787 Dreamliner to seven jets per month amid declining travel demand. He plans to resume production of 737 MAX at a low rate in 2020, but has not given a schedule. The planner said he would reduce the overall workforce through a voluntary layoff program.

Maple Leaf Foods Inc. says the increased spending associated with fighting the COVID-19 pandemic will add up to $ 20 million to its costs in the second quarter. The company says the additional expenses include increased labor, personal protective equipment, sanitation and other expenses. He says it works to partially mitigate spending through other savings. Maple Leaf updated its outlook by announcing a loss of $ 3.7 million or three cents per share in the first quarter, compared to earnings of $ 50.1 million or 41 cents per share a year ago.

Loblaw Companies Ltd. said first-quarter profit increased compared to a year ago as buyers stockpiled supplies due to the pandemic, but said costs also increased by increasing spending to protect workers and his clients. The company, which owns Loblaws grocery stores and the Shoppers Drug Mart chain, said it made profit attributable to common shareholders of $ 240 million or 66 cents per share for the 12-week period ended March 21.

General Electric Co announced a 7.6% drop in revenues in the first quarter, penalized by the weakness of its aviation and power units due to the coronavirus pandemic, and did not meet its own cash flow objectives for the trimester. Free cash flow from industrial activities was negative $ 2.2 billion in the first quarter, below analysts’ estimates of $ 2.02 billion negative, according to Refinitiv data.

German Bank The bank suffers a loss in the first quarter as the bank undergoes a costly overhaul and fights income pressure amid the coronavirus crisis, the German lender said on Wednesday. The bank released results earlier this week, but not shareholder net income, which reported a loss of 43 million euros ($ 46.64 million) in the quarter from a profit of 97 million. euros a year ago.

Hasbro Inc Canceled its full-year outlook and forecast a blow to its second quarter revenues and profits, sales of its toys and games are suffering from global bottlenecks to contain the spread of the coronavirus pandemic. Hasbro said delay in the release of new films and the suspension of production would also hurt sales. The company that holds toy licenses for Disney’s “Avengers”, “Star Wars” and “Frozen” franchises depends more on big Hollywood blockbusters to attract consumers than its rival Mattel Inc.

McDonald’s Canada says it will start importing beef as Canada’s beef supply chain struggles to meet current demand under COVID-19. The restaurant chain, which prides itself on using only Canadian beef, said in a statement that its policy change was due to the limited processing capacity of Canadian suppliers, such as a Cargill Inc. factory near High River, in Alberta. Cargill has temporarily closed after the death of a COVID-19 coronavirus worker and hundreds of other workers tested positive.

Economic calendar

(8:30 a.m.ET) Q1 real US GDP.

(10:00 am ET) Sales in the United States pending for March.

(2:00 p.m. ET) US Fed announcement with President Jerome Powell’s video briefing to follow.

With Reuters and The Canadian Press

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