MARKETS

TSX and U.S. stock futures are indicating a slightly higher open while global stocks generally flat-lined and gold fell as investors continued to question the ‘reflation’ trades that had lifted markets since the election of U.S. president Donald Trump.

European stock indices are mixed with London's FTSE 100 lower. 

The Shanghai Composite Index fell 0.8%, taking its four-day loss to 3.2%. The Hang Seng Index slid 0.4%. Japan’s Topix index was little changed, while Australia’s S&P/ASX 200 Index lost 0.6% and South Korea’s Kospi index fell 0.5%.

CURRENCIES

The Canadian dollar is losing more ground to $0.7443 U.S.

The yen dropped 0.6% to 109.04 per dollar after gaining 0.5% Tuesday.

The U.S. dollar index rose 0.2% following a two-day decline.

The pound held steady at $1.2853 after its 2.2% surge Tuesday in reaction to the UK election call. 

The euro was little changed at $1.0726.

BONDS

The yield on 10-year Treasuries rose four basis points to 2.21% after an eight-basis-point plunge Tuesday.

COMMODITIES

U.S. crude prices are flat at $52.43 as oil inventories fell 840,000 barrels last week, according to the API. More official EIA data due today may show a larger drop of 1.4 million barrels.

Gold had been creeping toward the $1,300 level but is lower at $1,286.00.

STOCKS THAT MAY MOVE 

Parkland Fuel Corp (PKI-T), Chevron Corp (CVX-N) sold its Canadian gasoline stations and refinery in British Columbia Parkland for $1.46 billion (Canadian). The assets include 129 gasoline stations, three terminals and the Burnaby oil refinery. Chevron is also exploring the sale of its 20% stake in Canada's Athabasca Oil Sands project, which could fetch about $2.5 billion.

Loblaw (L-T) Still at the pumps, the retailer is selling its gasoline stations to Brookfield Business Partners (BBU.U-T, BBU-N) for $545 million. Brookfield is teaming up with Imperial Oil (IMO-T) to rebrand the stations under the Mobil brand. The stations will continue to offer Loblaw's PC Plus loyalty program. 

Richelieu Hardware (RCH-T) is buying Weston Premium Woods Inc., which is a Brampton, Ont.-based distributor of wood materials, decorative products and hardwoods. Richelieu says Weston Premium has about $60 million in annual sales. 

Algoma Central (ALC-T) says it has sold some properties known as Corporate Park in St. Catharines, Ont. The net proceeds are $26.4 million.

Surge Energy (SGY-T) is looking to increase its dividend by nearly 12% to 9.5 cents per year from 8.5 cents. The company also says it bought a crude oil producing asset in its Sparky area of central Alberta, and some undeveloped sections in the company's Eyehill asset, for $37 million.

Dream Industrial REIT (DIR.UN-T) CEO Brent Chapman will be leaving in March, 2018, "to pursue other career opportunities." The company is starting a search committee to find a replacement. 

Rogers Communications Inc (RCI.B-T) reported a sharp rise in first-quarter profit and higher revenue as it boasted a surprisingly large jump in new wireless customers. Rogers shares have recently  broken through to all-time highs. 

CANADIAN ANALYSTS' CALLS

This is an overview of some of today's analyst research. We'll have more details on many of these reports in the next Digest.

Rogers Communications Inc (RCI.B-T). More on Rogers as JP Morgan raises the target price to $62 from $60; rating Neutral based on updated discounted cash flow analysis after the company reported a solid Q1/2017 results.

Spectra7 Microsystems (SEV-T) Mackie Research raises the price target to $0.60 from $0.55, maintains Buy. 

"Management sounding more bullish than in past six months. SEV has secured additional design wins in Q1, according to the company’s Q1/2017 pre-announcement after market close yesterday. So far, we have confirmed SEV’s presence in Oculus Rift and HTC Vive Virtual Reality (VR) headsets. Last fall, we indicated that HP, Dell, Lenovo, Asus and Acer are all working on tethered VR headsets for PC, which we suspect could include SEV chips. We believe new Q1 design wins announced last night could likely extend SEV’s presence beyond those providers to include most major headsets. In addition, data center customers appear to be moving forward beyond taking product samples."  

Asanko Gold (AKG-T) RBC reduces price target to $4.75 from $5, giving the shares 40% potential upside, maintains Sector Perform, Speculative Risk rating.

Kelt Exploration (KEL-T) RBC raises price target to $10 from $9, implying 32% upside, maintains Outperform.

Roxgold (ROXG-T) GMP maintains Buy and price target of $2, giving the shares 45% upside potential, after a company update. 

CanWel Building Products Group (CWX-T) GMP raises price target to $7.50 from $7.25, maintains Buy. Current price $6.11. 

Copper Mountain Mining (CMMC-T) Raised to Speculative Buy at TD.

Dream Industrial (DIR.U-T) Raised to Outperform at BMO, price target $9.50. As mentioned, the CEO is stepping down.

Imperial Metals (III-T) Raised to Hold at Canaccord, price target $6.50.

Russel Metals (RUS-T)  Raised to Outperform at Raymond James.

U.S. ANALYSTS' CALLS

Whirlpool (WHR-N) RBC reiterates as a Top Pick and price target of $200 (U.S.), giving the shares 21% upside. The analysts say the appliance maker with emerging markets exposure is "oversold".

"We believe that investor skepticism is excessive given our
view that WHR can still generate 201717 EPS of at least $15.50 (Guidance:
$15.25 to $16.25). Headwinds related to promotional activity in North
America, sluggish demand as well as integration issues in Europe, and the
potential impact of rising steel costs on profitability are factored into our
estimates. We also believe that potential upside to estimates next year
resulting from a demand recovery in Brazil is being overlooked. Lastly, the  stock is trading at an attractive valuation compared with the peer group average." 

IMAX (IMAX-N) B. Riley maintains Buy and price target of $46 after the company expanded its agreement with China's state-owned Ominjoi Cinemas to include 40 more theatres by 2021. Omnijoi is IMAX's fifth-largest client, according to the analyst. 

International Paper (IP-N) RBC upgrades to Outperform from Sector Perform, raises price target to $56 (U.S.) from $50, which implies 12% upside.

Lam Research (LRCX-O) Pacific Crest raises the target to $180 from $163. 

Bank of America Corp (BAC-N) Instinet raises target price to $26 from $25 to reflect higher fee income, better efficiency, and strong capital progress.

Johnson & Johnson (JNJ-N) Raymond James raises the price target to $129 from $122 following the company's earnings results. 

Eli Lilly and Co (LLY-N) Berenberg cuts target price to $100 from $103; rating Buy after the company was dealt a setback with the FDA rejection of baricitinib, its oral janus kinase inhibitor for rheumatoid arthritis.

Goldman Sachs (GS-N) JP Morgan cuts target price to $238 from $251; rating Overweight based on revised estimates after the company reported weak first quarter results.

Omnicom Group Inc (OMC-N) RBC cuts target price to $96 from $101 citing weak sentiment on the sector.

EARNINGS

Morgan Stanley (MS-N) reported a 74% jump in quarterly profit, helped by a bump in trading gains as investors shuffled their portfolios following interest rate hikes by the Federal Reserve.

BlackRock Inc (BLKP-N) the world's biggest asset manager, reported a 31% rise in quarterly profit helped by higher investment advisory fees and securities lending revenue.

International Business Machines Corp (IBM-N) Make it five years in a row that IBM has had declining revenue. The company reported a bigger-than-expected decline in revenue due to weak demand in its IT services business, a sign that the company's turnaround could take longer than expected. IBM's net income dropped 13% to $1.75 billion.

Intuitive Surgical Inc (IRSG-O) The company increased its 2017 forecast for growth in procedures using its da Vinci surgical robots after reporting higher-than-expected first-quarter revenue and profit. Intuitive said it now expected full-year procedure growth of 12-14%, up from its prior view of 9-12%. Excluding items, Intuitive had adjusted earnings of $5.09 per share, beating analysts' average estimate by 12 cents. Revenue for the quarter rose 13% to $674 million, topping Wall Street's estimate of $666.5 million.

DEALS

KKR & Co (KKR-N) A group backed by the private equity firm said it had made a revised $6.15 billion (Australian) offer for Australia's biggest lottery operator Tatts Group Ltd, upping the ante in a bidding war against Tabcorp Holdings Ltd. Both proposals are valued at less than Tatts' trading price and shareholders are divided over whether the board should favour the KKR-led all-cash bid over Tabcorp's cash-and-subscription receipt offer and allow the U.S. firm to do due diligence.

WHAT WE'RE READING

Good charts tracking $17 trillion in fund flows. The Trump trade is cracking. bloomberg.com/news/articles/2017-04-18/follow-17-trillion-of-fund-money-to-see-cracks-in-trump-trade

Fund managers are avoiding U.S. stocks. marketwatch.com/story/fund-managers-are-avoiding-us-stocks-like-never-before-in-this-bull-market-2017-04-19

Goldman Sachs Group Inc. dropped their long dollar positions, citing a slowdown in the reflationary momentum of the U.S. economy

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Have a great day!