Global Market Update
Canadian Markets
Canada’s main stock index dropped, driven by investor concerns over the potential consequences of the U.S. President’s recent tariff threats, despite gains in commodity markets where oil and gold saw higher prices. Oil prices rose due to tightening supply concerns and geopolitical tensions, while gold was buoyed by its safe-haven appeal amid heightened economic risks.
American Markets
American markets also were in a downward trend on Wednesday, as investors were on edge as they digested the implications of the latest tariff threats, which were expected to add to existing trade tensions. As a result, many investors turned cautious and moved away from riskier assets. Additionally, traders awaited the release of the Federal Reserve’s meeting minutes, hoping to gain clarity on the central bank’s stance regarding interest rates and future monetary policy. The minutes were expected to provide further insight into whether the Fed would maintain its accommodative approach or signal any shift towards tightening due to concerns over inflation.
European Markets
European stock markets also saw declines, with real estate shares being among the hardest hit. The sector’s weakness was attributed to higher bond yields, which have been rising due to expectations of inflation and potential tightening of monetary policy in major economies. As bond yields increase, the attractiveness of dividend-paying stocks, particularly in sectors like real estate, decreases, leading to a pullback in stock prices. Rising bond yields can also signal investor worries about inflation and higher borrowing costs, both of which have a dampening effect on economic growth.
In the UK, stocks were also under pressure, influenced by a combination of rising bond yields and negative sentiment from the broader European market. However, a key economic report added another layer of concern. The UK’s annual inflation rate exceeded expectations, coming in above both the 2.5% recorded in December and the 2.8% forecast by economists. The Office for National Statistics (ONS) revealed that the annual inflation rate had reached its steepest increase since March of the previous year, driven by higher energy and food prices. This surge in inflation raised concerns that the Bank of England might be forced to take action on interest rates to combat rising costs, which could further dampen consumer spending and economic growth.
Corporate Stock News
Apple Inc:
Apple plans to launch a new budget iPhone model, targeting the mid-range smartphone market to compete against Samsung and Huawei. The iPhone SE will incorporate artificial intelligence tools. In the UK, the company raised concerns over the competition regulator’s proposed remedies for the mobile browser market.
Arista Networks Inc:
Forecasted Q1 revenue above Wall Street estimates, driven by demand for cloud networking gear fueled by AI applications. Q4 revenue of $1.93 billion exceeded expectations, with adjusted earnings rising to 65 cents per share from 52 cents last year.
BHP Group Ltd:
Raised $3 billion through senior unsecured bonds, with coupon rates between 5.0% and 5.3%, for general corporate purposes.
Bombardier Inc:
Under investigation by Canadian authorities regarding a Delta Air Lines regional jet crash in Toronto, which injured 21 people. The Bombardier-made jet flipped upon landing, and black boxes have been sent for analysis.
BP Plc:
Considering the sale of its Castrol lubricants business, potentially valued at $10 billion, as part of its broader asset divestment strategy under shareholder pressure from Elliott Management.
Cadence Design Systems Inc:
Forecasted annual revenue and profit below analysts’ expectations, citing weaker demand for chip design software. Q4 revenue was $1.36 billion, with earnings of $1.88 per share, slightly exceeding estimates.
Chevron Corp:
Plans to cut up to 8,000 jobs (about 20% of its workforce) due to lower oil prices, impacting 2024 profits. Despite the drop, Chevron posted a profit of $18.3 billion.
Citigroup Inc:
Appointed Nicole Giles as its new chief accounting officer, effective February 21. Giles previously worked at JPMorgan.
CoStar Group Inc:
Forecasted weaker-than-expected revenue for 2025 due to challenges in the U.S. housing market. Q4 revenue of $709.4 million slightly exceeded estimates, but net income of 15 cents per share fell short.
Delta Air Lines Inc:
Investigating a regional jet crash in Toronto involving a Bombardier CRJ900 aircraft, which injured 21 people. Black boxes are being analyzed by Canadian authorities with support from U.S. agencies.
Devon Energy Corp:
Reported a Q4 profit beat driven by a 28% increase in production, despite lower oil prices. The company’s total revenue rose 6% to $4.4 billion.
EQT Corp:
Beat Q4 profit expectations, benefiting from higher natural gas prices. The company’s debt stood at $9.3 billion after a $14 billion acquisition. For 2025, EQT forecasted spending between $1.95 billion and $2.12 billion.
Equifax Inc:
A U.S. federal judge ruled that Equifax must face a lawsuit accusing the company of monopolizing the electronic income and employment verification services market.
Ford Motor Co:
Some middle managers will not receive stock bonuses in an effort to control costs.
HSBC Holdings Inc:
Reported 2024 profit above expectations, driven by a rise in wealth and personal banking. The company plans to cut $1.8 billion in costs and announced a $2 billion share buyback. However, it will not meet its 2030 net-zero carbon emissions target, revising its timeline to mid-century.
Howard Hughes Holdings Inc:
Pershing Square Capital Management proposed a plan to buy more shares and appoint its CEO as the head of the company. Bill Ackman’s firm is purchasing 10 million shares for $900 million.
Intel Corp:
Silver Lake is in exclusive discussions to acquire a majority stake in Intel’s programmable chip business, Altera, for around $9 billion.
James Hardie Industries Plc:
Shares rose after reporting a strong Q3 profit, with forecasts of continued growth and margin expansion through fiscal year 2026.
LyondellBasell Industries N.V.:
Announced layoffs at its closed Houston refinery starting in April, affecting approximately 400 employees, mostly hourly workers.
National Health Investors Inc:
Activist investor Jonathan Litt is launching a proxy fight to oust two board members and improve lease terms with National Healthcare.
Occidental Petroleum Corp:
Divested $1.2 billion in upstream assets and reported a Q4 loss of $297 million. Proceeds will be used to reduce debt, and the company plans capital expenditures of $7.4 billion to $7.6 billion for 2025.
Shift4 Payments Inc:
Agreed to acquire Global Blue for $2.5 billion to expand its footprint in tax-free shopping.
Supernus Pharmaceuticals Inc:
Shares dropped after its depression treatment trial failed to meet its primary goal, with SPN-820 showing no significant improvement compared to a placebo in a trial for treatment-resistant depression.
Tesla Inc:
TSLA is making progress in entering the Indian market with plans to launch showrooms in New Delhi and Mumbai after a delay in its market entry.
The Howard Hughes Corp:
Bill Ackman’s Pershing Square is buying 10 million shares for $900 million, with plans for Ackman to become chairman and CEO, taking Pershing’s stake to 48%.
STA Research (StockTargetAdvisor.com) is a independent Investment Research company that specializes in stock forecasting and analysis with integrated AI, based on our platform stocktargetadvisor.com, EST 2007.
