Market Analysis & Stock News: January 15th, 2025

Canada’s TSX was deep in the green, largely driven by a rise in commodity prices. As energy and metal prices gained, stocks in related sectors like mining and energy performed well, propelling the broader market upward. Investors are also keeping a close watch on the U.S. fourth-quarter 2024 earnings season, with the focus on major banks releasing their results. Earnings are expected to be strong, fueled by a surge in dealmaking and robust trading activity, which has been a hallmark of the past quarter. A better-than-expected performance from U.S. financial institutions could also have a positive knock-on effect for Canadian financial stocks, which tend to follow U.S. market trends.

American Markets

American stock indexes surged as investors evaluated the earnings reports of several large U.S. banks. Investors were also cheered by the latest U.S. Consumer Price Index (CPI) reading, which showed inflation cooling more than anticipated. CPI came in at 2.9%, well below the forecasted 3.3%, further easing inflationary pressures. This sparked a drop in bond yields, as investors adjusted expectations for future interest rate hikes by the Federal Reserve. The lower inflation print bolstered investor sentiment, providing a positive backdrop for equities.

European Markets

In Europe, stock markets were buoyed by the easing of bond yields, with investors reacting positively to the signs of stabilizing inflation and the potential for central banks to slow down their tightening cycles. European indices gained, with stronger sentiment driven by a mix of lower inflation and easing interest rate expectations.

Asian Markets

Japan’s Nikkei index closed lower, pressured by weakness in chip-related stocks. Semiconductor shares faced selling pressure amid concerns over slowing demand, which dragged the broader index down.

Chinese stocks were somewhat subdued, as traders awaited more signals from the government on potential economic stimulus measures. Investors remained cautious, as the Chinese government has yet to introduce major new support for the economy, and there is uncertainty about the pace of any further stimulus actions.

Corporate Stock News

• Air Products and Chemicals Inc: The California State Teachers Retirement System will vote for activist investment firm Mantle Ridge’s four director candidates at the Jan. 23 annual meeting, in a battle regarding succession planning and capital allocation.
• Applied Digital Corp: The data center operator posted a smaller-than-expected loss for Q2, with increased demand for its high-performance data center and cloud services. The stock closed nearly 10% higher after a $5 billion investment by Macquarie in its AI data centers.
• Bank of New York Mellon Corp: Reported a 27% jump in Q4 profit, driven by higher investment services fees. Total fee revenue grew 9%, and profit was $1.27 billion, up from $1 billion a year earlier.
• Biogen Inc: CEO Chris Viehbacher expressed confidence in Biogen’s current pipeline, including Alzheimer’s treatments, and stated the company does not need new business development deals.
• BlackRock Inc: Posted a 21% profit jump in Q4 with record assets of $11.6 trillion. Long-term net inflows were $201 billion, primarily into ETFs and fixed-income products.
• Bunge Global SA: Canada approved Bunge’s $34 billion merger with Glencore-backed Viterra with conditions, including divesting six grain elevators and investing at least $362 million in Canada over five years.
• Celanese Corp: The company recommended shareholders reject an unsolicited “mini-tender” offer from TRC Capital Investment to buy shares at a 4.5% discount to market price.
• Deere & Co: The U.S. Federal Trade Commission (FTC) is preparing a lawsuit against Deere over allegations of antitrust violations in its agricultural equipment repair practices.
• Enbridge Inc: TD Cowen initiated coverage with a target price of C$66, citing the company’s diversified opportunities for future growth.
• General Motors Co: GM signed a multi-billion dollar agreement with Vianode for synthetic graphite for its EV batteries, with production starting in 2027 at a North American plant.
• GeoPark Ltd: Cancelled its planned $530 million acquisition of Repsol’s oil and gas assets in Colombia due to Repsol’s partner exercising its preemptive rights.
• Intel Corp: Intel announced it will separate Intel Capital into a standalone company, aiming to enhance efficiency. The new company will start operations in the second half of 2025.
• Janus Henderson Group Plc: CEO Ali Dibadj urged investors to oppose hedge fund Saba Capital’s bid to overhaul boards of seven UK investment trusts, calling Saba’s actions “betting on complacency.”
• JPMorgan Chase & Co: Reported record annual profit of $58.5 billion in 2024, driven by strong dealmaking and trading activity. Q4 earnings rose to $14 billion, up from $9.3 billion a year earlier.
• Mastercard Inc: Citigroup raised the target price to $584 from $572, expecting solid growth in Q4 driven by strong holiday spending and value-added services.
• Meta Platforms Inc: Faces potential restrictions in India following an antitrust ruling that banned WhatsApp from sharing user data with Meta for advertising purposes.
• Papa John’s International Inc: Jefferies cut the target price to $42 from $55, citing expectations of continued domestic recovery and potential additional store closures.
• PayPal Holdings Inc: Citigroup raised the target price to $97 from $94, expecting positive Q4 results driven by strong branded demand and increased Buy Now Pay Later activity.
• Pfizer Inc: The company appealed a federal judge’s refusal to award $75.2 million from an insider trading settlement tied to SAC Capital’s 2013 settlement with the SEC.
• Sun Life Financial Inc: National Bank of Canada raised the target price on Sunlife to C$95 from C$82, citing confidence in the company’s strategy to deploy excess capital toward acquisitions.
• United States Steel Corp: Nippon Steel remains interested in partnering with the U.S. government to pursue a takeover of U.S. Steel, despite legal challenges.
• Wells Fargo & Co: Reported a profit increase in Q4, driven by strong investment banking earnings, which rose 59% year-over-year.
• Warner Bros Discovery Inc: Appointed Anthony Noto and Joey Levin to its board. Noto joined on Jan. 8, while Levin is set to join on Feb. 1, ahead of the company’s 2025 annual meeting.