Global Market Update
Canadian Markets
Canada’s TSX index edged lower as cautious investors focused on upcoming U.S. inflation data, scheduled for release later in the week. This data is seen as a crucial indicator to gauge the Federal Reserve’s next steps on monetary policy, particularly regarding interest rate decisions. Investors were particularly keen on the U.S. Consumer Price Index (CPI) data set to be published on Wednesday, as it could provide insight into inflationary pressures and influence the Fed’s stance on tightening or easing rates. Alongside this, Canadian investors were also bracing for the release of factory sales and wholesale trade data for November, which could offer more context on the health of Canada’s economy.
American Markets
In the U.S., stock markets were also lower after initially rising at open, concerns over Treasury yields soon dampened sentiment. The yield curve inversion, often viewed as a signal of economic uncertainty or potential recession, weighed on investor confidence.
Data released today showed the Producer Price Index (PPI) increased by 3.3% year-over-year, slightly up from 3% in November but below economists’ expectations. On a monthly basis, it rose by 0.2%, also falling short of forecasts. This data sets the stage for Wednesday’s highly anticipated consumer inflation report.
European Markets
In Europe, stocks posted gains as the market recovered from earlier losses. The rebound came after reports suggested that U.S. President-elect Donald Trump might implement a strategy of gradual tariff hikes, a scenario that was seen as less disruptive than immediate, large-scale tariffs. This news provided a brief boost to European stocks, as investors recalibrated expectations for future trade relations.
UK, stocks fell, with the blue-chip FTSE 100 index dropping sharply. A key factor in this decline was the pound’s drop to a two-month low against the euro. Adding to the pressure were profit warnings from major corporations, including BP and JD Sports, which weighed on market sentiment and contributed to the downward movement in UK stocks.
Asian Markets
Japan’s Nikkei index fell, driven by a selloff in semiconductor stocks. Investors were increasingly concerned that the Bank of Japan might raise interest rates sooner than expected, which could negatively impact the economy. The potential tightening of monetary policy in Japan added to investor anxiety about the global economic slowdown.
Chinese stocks posted gains, as Beijing pledged more economic support measures. The Chinese government vowed to implement policies aimed at stabilizing markets and stimulating economic growth, which helped boost investor confidence in the region despite ongoing challenges.
Corporate Stock News
- AG Growth International Inc.
CIBC lowered its target price for AG Growth International to C$61 from C$72, after the company revised its 2024 outlook downward due to weak demand in the U.S. and North American farm markets. The adjustment reflects ongoing challenges in the agricultural equipment industry and concerns over softer farm equipment sales. - Alphabet Inc.
Britain’s antitrust regulator, the Competition and Markets Authority (CMA), announced an investigation into Google’s search operations to assess how they impact consumers, businesses, and competitors. The investigation will examine Google’s dominance in both search and search advertising, focusing on possible anti-competitive behaviors and the impact on innovation, including preferential treatment for its own services. In addition, Alphabet faced a fine from a Russian district court for non-compliance with local regulations, amounting to $77.9 million. - Alphabet Inc., Apple Inc., and Meta Platforms Inc.
The European Commission is re-evaluating its ongoing investigations into tech giants, including Alphabet, Apple, and Meta, under the Digital Markets Act. The review, influenced by broader geopolitical factors, may lead to a scaling back of certain cases. While technical work on the investigations will continue, political direction is being awaited before final decisions are made, potentially altering the scope of scrutiny and the range of any fines or penalties. - Amazon.com Inc.
Amazon placed an order for 200 Mercedes-Benz fully-electric eActros 600 heavy-duty trucks from Daimler, marking its largest electric truck purchase to date. These vehicles will be deployed on high-mileage routes within Amazon’s middle-mile network across Germany and the UK as part of the company’s broader commitment to achieving net-zero carbon emissions by 2040. - Applied Digital Corp.
Applied Digital secured a major investment from Macquarie, which will inject up to $5 billion into the company’s AI data centers, taking a 15% stake. The investment includes $900 million for a data center campus in North Dakota, and Macquarie will have the option to invest an additional $4.1 billion in future facilities. This funding will help Applied Digital pay off debt and recover part of its equity investments in its data center projects. - Barrick Gold Corp.
Barrick Gold confirmed the suspension of its operations in Mali after the government moved gold stock from the Loulo-Gounkoto mining site to a bank. The miner expressed regret over the temporary halt and reiterated its commitment to resolving the situation, though the amount of gold seized was not disclosed. The suspension has raised concerns over the stability of its operations in Mali. - Blackstone Inc. & Carlyle Group Inc.
Blackstone, Apollo Capital Management, and Carlyle Group agreed to pay over $63 million in settlements with the U.S. Securities and Exchange Commission (SEC) for violating record-keeping regulations. These violations included improper use of off-channel communication platforms like WhatsApp. The firms admitted to failing to maintain required records and have committed to improving their compliance systems. - BP PLC.
BP issued a profit warning for its fourth-quarter results, citing weaker oil and gas production, lower refining margins, and reduced trading income. The company also announced a delay in its capital markets day, initially scheduled for February 11, due to a medical procedure undergone by CEO Murray Auchincloss. BP expects up to a $300 million drop in profits and a further $200 to $400 million reduction in its oil production division for the quarter. - Diamondback Energy Inc.
Diamondback Energy forecasted lower realized oil prices for the fourth quarter compared to the previous quarter, with prices dropping to $69.48 per barrel from $73.13. However, natural gas prices increased, with average realized prices rising to $0.82 per thousand cubic feet from $0.60 in the prior quarter. The company is set to report its fourth-quarter results on February 24. - Enbridge Inc.
An Illinois federal judge dismissed a lawsuit accusing Enbridge of blocking a rival’s attempt to build a terminal to ship Canadian crude oil from Chicago to refineries in the U.S. Midwest and Gulf of Mexico. The court ruled that the plaintiff, Ducere, failed to provide sufficient evidence of Enbridge’s anti-competitive behavior. The lawsuit, originally filed in February, was dropped after an amended complaint removed Exxon as a defendant. - H&E Equipment Services Inc. & United Rentals Inc.
United Rentals announced it would acquire H&E Equipment Services in a deal valued at $4.8 billion, as part of its strategy to capitalize on the growing demand for equipment rentals. H&E shareholders will receive $92 per share in cash, a premium of 109.4% over the stock’s previous closing price. - IAC Inc.
IAC announced that longtime CEO Joey Levin would step down following the spinoff of its majority stake in Angi, the home services marketplace. IAC plans to focus on Dotdash Meredith, its largest business. Levin will transition to an advisory role and become executive chairman of Angi. The spin-off is expected to close in the first half of 2025 and marks the tenth standalone public company to separate from IAC. - Intra-Cellular Therapies Inc.
Piper Sandler raised its target price for Intra-Cellular Therapies to $132 from $107 after the company announced it would be acquired by Johnson & Johnson. The deal is expected to offer significant value to Intra-Cellular’s shareholders and enhance Johnson & Johnson’s portfolio in the psychiatric and neurological therapeutics space. - Moderna Inc.
Leerink Partners reduced its target price for Moderna to $27 from $31, citing the anticipated decline in demand for COVID-19 vaccines and uncertainty surrounding recommendations for RSV (respiratory syncytial virus) revaccination. The downgrade reflects ongoing challenges for the vaccine maker as pandemic-related demand slows. - Pegasystems Inc.
KeyBanc initiated coverage of Pegasystems with an overweight rating, driven by optimism surrounding the company’s GenAI Blueprint. The firm believes this technology could lead to significant expansion and encourage cloud migration, positioning Pegasystems for strong growth in the digital transformation space. - Robinhood Markets Inc.
Robinhood agreed to pay $45 million to settle charges from the SEC over violations in record-keeping, trade reporting, and other regulatory lapses. The SEC found that Robinhood failed to maintain accurate trading data, properly report suspicious activities, and comply with short sale rules. The firm also admitted to not adequately addressing cybersecurity risks and the use of off-channel communications platforms by its employees. - UnitedHealth Inc.
Leerink Partners raised its target price for UnitedHealth to $675 from $600, citing expectations for improving business fundamentals. The firm anticipates easing cost pressures and stronger margin visibility, positioning UnitedHealth for solid performance in the coming year. - Westinghouse Air Brake Technologies Corp.
Wabtec, a major player in heavy industrial parts, announced the acquisition of Evident’s inspection technologies division for $1.78 billion. The deal aims to bolster Wabtec’s presence in the rail, mining, and industrial sectors while expanding into high-growth, high-margin complementary industries. The transaction is expected to close by mid-2025.
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.
