Market Analysis for March 7th, 2025

On Friday, Canada’s TSX stock index saw a moderate rise, but it remained on track to experience its largest weekly decline in nearly six months. This was largely driven by ongoing trade uncertainties, which have added pressure to market sentiment. Investors were cautious as news from Canada’s job report revealed a much weaker-than-expected increase in employment. Only 1,100 jobs were added in February, well below the forecast of 15,000. Despite the disappointing numbers, the country’s unemployment rate remained stable at 6.6%. This data raised concerns about the strength of Canada’s labor market and its broader economic outlook, further compounding the impact of global trade tensions.

American Markets

In the U.S., stock indexes dropped after initially opening higher. The February jobs report showed that only 151,000 jobs were created, falling short of the expected 160,000. While job growth remained positive, the number of jobs added was lower than anticipated, stoking concerns about the pace of the economic recovery. Investors were particularly focused on comments from Federal Reserve Chair Jerome Powell, with many hoping to gain more insight into the U.S. economy’s health. The jobs report’s underwhelming results added to existing concerns, which were further exacerbated by uncertainty surrounding trade tariffs. Markets were anxious about the potential for tariffs to disrupt global trade and economic stability.

European Markets

European shares took a significant hit. This decline was a consequence of the volatile shifts in U.S. trade policy throughout the week, which spooked investors and led to heightened risk aversion. The uncertainty surrounding trade negotiations, especially with the U.S., weighed heavily on investor confidence. Meanwhile, the euro saw its strongest performance against the U.S. dollar since the 2008 financial crisis, signaling that some investors may have sought refuge in the European currency as a safe-haven asset amid global instability. Europe’s economy grew by 0.4% in February, a modest but positive sign, although the geopolitical risks continued to overshadow the economic optimism.

The UK also faced its own set of challenges. British stock markets dipped in response to a decline in house prices in February, signaling potential weakness in the housing sector. This data added to existing concerns about the UK economy’s growth prospects, particularly as the country continues to navigate the uncertainties tied to Brexit. Additionally, the British pound rose against the U.S. dollar, reflecting investor sentiment that may have been seeking a safer currency amid global market turbulence.

Corporate Stock News

• Alimentation Couche-Tard Inc: The company will send top executives to Tokyo to discuss its $47 billion bid to acquire 7-Eleven operator Seven & i Holdings. They are also in talks about potentially selling U.S. stores to secure regulatory approval for the deal.

• Bank of Montreal, National Bank of Canada & Royal Bank of Canada: Royal Bank boosted CEO Dave McKay’s 2024 salary by 61% to C$24.5 million, National Bank increased CEO Laurent Ferreira’s salary by 34.6% to C$11.4 million, and Bank of Montreal CEO Darryl White’s salary was cut by 14.2% to C$9.6 million.

• Broadcom Inc: AVGO forecasted strong second-quarter revenue, assuaging investor concerns about AI chip demand. First-quarter revenue of $14.92 billion exceeded estimates, with AI revenue surging more than 77% to $4.1 billion.

• Cooper Companies Inc: The company missed first-quarter revenue estimates due to lower-than-expected demand for contact lenses. However, its surgical division performed well with a 3% increase in sales. The company raised its 2025 adjusted profit forecast slightly.

• Costco Wholesale Corp: Costco’s second-quarter earnings missed estimates, with earnings of $4.02 per diluted share. However, revenue rose 9% to $63.72 billion, surpassing analysts’ expectations.

• Gap Inc: The company beat fourth-quarter sales and profit estimates, driven by its turnaround strategy and strong performance at Old Navy and Banana Republic. It expects modest net sales growth for fiscal 2025.

• Hewlett Packard Enterprise Co: The company lowered its revenue forecast for the second quarter, citing the impact of U.S. tariff wars. It also plans to lay off 5% of its workforce to reduce costs.

• Intuitive Machines Inc: Shares of the company fell after its second moon lander, Athena, appeared to have landed on its side, complicating its mission. The company has received most of its $120 million contract but may miss out on some milestone payments.

• Johnson & Johnson: The company ended its late-stage trials for its experimental drug to treat major depressive disorder after it showed insufficient efficacy. It will explore other development opportunities for the drug.

• Las Vegas Sands Corp: CEO Robert Goldstein will step down in March 2026, transitioning to a senior adviser role. The company plans to promote COO Patrick Dumont to CEO and chairman.

• Marathon Petroleum Corp: MPC will begin planned maintenance on its refinery in Robinson, Illinois on March 18, which is expected to last two months and reduce output.

• Surmodics Inc: The U.S. Federal Trade Commission sued to block Surmodics’ acquisition by private equity firm GTCR, claiming the merger would lead to higher healthcare costs by consolidating market share in medical device coatings.

• Walgreens Boots Alliance: The company will be taken private by Sycamore Partners in a deal valued at $23.7 billion, with Sycamore offering $11.45 per share and a potential additional $3 per share linked to future monetization of Walgreens’ debt and equity interests in VillageMD.