Top of the morning

Michael Batnick of Ritholtz Wealth brings up five things investors should pay attention to amid all the noise. Here are two of them:

2) A single earnings report is not the be-all and end-all, however there are things you can look for that are important. The quality of earnings is crucial to a healthy business. Management has a plethora of tools at their disposal to manipulate earnings so it pays to do a little detective work. Cash flow and accruals don’t lie. You want to see accruals as a percentage of earnings going down, not up…

4) Insider selling is largely meaningless. It’s impossible to know why they’re selling and shares are a big part of executive compensation these days. Big insider buying is a much better indicator of how an executive feels about the price of their company’s stock.

On the homefront

All 10 sectors were positive on Wednesday as Canada’s benchmark index booked its sixth consecutive gain. Though the near contract for WTI crude fell below $77 per barrel late in the trading day, energy stocks still managed to advance. The defensive consumer staples was the best-performing sector on Bay Street, buoyed in part by a strong set of earnings from Loblaw (L) that sent shares 3.4 per cent higher. WTI crude has moved another leg lower this morning, and isn’t too far away from the three-year low it slipped to on Nov. 4. Nonetheless, TSX 60 futures are trading higher ahead of the open.

 

The Canadian dollar is losing some of yesterday’s gains to trade at 0.883 against the greenback this morning.

 

BlackBerry investor day. The once-dominant Waterloo tech giant BlackBerry (BBRY) is holding its annual shareholder meeting today in San Francisco. The firm is expected to unveil BES12, the updated edition of its mobile device management system. Under John Chen’s leadership, the company has made significant progress in stemming cash burn and is on the cusp of profitability. But this new product is the key to its success growing forward: this will essentially serve as the primary channel through with the company can sell additional software and services to the enterprise space, and, as such, it is the foundation for its long-term growth.

 

Bank of Canada release. At 10:30 a.m. (EST), monetary policy-makers will publish a collection of articles pertaining to the domestic economy and central banking in general. Topics to be discussed in this issue include forward guidance, Canadian productivity and competitiveness, and the use of derivatives by domestic firms. In addition, senior deputy governor Carolyn Wilkins will deliver a speech at Wilfrid Laurier University on “Money in a Digital World.” Her remarks will not be broadcast, and there is no press conference following the event. In light of that, and the subject matter, it’s a safe guess that she won’t tell us anything about the Bank of Canada’s outlook that we haven’t already heard.

 

Canada’s biggest LifeCo reports earnings. Before the market opened on Thursday, Manulife (MFC) posted Q3 results that were largely in line with analysts’ expectations. CEO Donald Guloien indicated that, on a regional basis, the company’s sales in Asia were far more robust than those in North America. Shares of the company are up about five per cent year-to-date after going on a tear in 2013 in anticipation of higher bond yields, which have failed to materialize so far.

 

EnCana isn’t shying away from spending on new projects. During EnCana’s (ECA) conference call on Wednesday, management indicated that capital spending next year will “substantially” exceed the $2.5 billion (USD) spent in this segment in full-year fiscal 2015. In particular, the company is looking to boost production in the Permian basin, a place where it has a sizeable amount of reserves thanks to its acquisition of Athlon Energy. This commitment to increasing business investment comes at a time when other companies in the space are cheading in the opposite direction in light of the precipitous decline in crude oil prices since late June.

Daily dispatches

Disappointing Chinese data. Industrial production, retail sales, and fixed asset investment all rose by less than economists expected in October. Though the misses weren’t massive, taken as a whole, they suggest that the rate of economic growth cooled from the third to the fourth quarter. “There seems to be a growing view that Chinese officials are due to downgrade the 2015 GDP target soon,” writes IG chief market strategist Chris Weston. “There has been some talk that a seven per cent target could come into force at some stage.” However, the Hang Seng rallied on reports that the People’s Bank of China is moving to boost liquidity in smaller financial institutions.

 

But encouraging news out of Japan. Machinery orders unexpectedly rose 2.9 per cent month-over-month in September, with the consensus estimate calling for a one per cent decline. That’s the fourth consecutive monthly gain, and suggests the country is shaking off the effects of the tax hike in April.

 

Inflation in the euro area remains stubbornly low — and that’s a headline you can count on reading for a while. The three biggest nations in the currency union all have annual inflation running at below one per cent, however, some progress was made in October. Germany is sitting at 0.8 per cent, inflation in France edged up to 0.5 per cent, and Italy made its way out of deflation for the first time in five months as prices are up 0.1 per cent year-over-year.

 

A double dose of U.S. labour market data is slated to be released this morning, with last week’s initial jobless claims due out at 8:30 a.m. (EST) while the Job Openings and Labour Turnover Survey (JOLTS Report), one of Fed Chair Janet Yellen’s favourite indicators, is published an hour and a half later.