Market Analysis & Stock News: January 23rd, 2025

Canadian Markets

The TSX rose despite declines in oil and gold prices. Retail sales data for November showed a 0.4% decline, which highlighted slower consumer spending, which could signal broader economic softness. However, the broader market remained resilient.

American Markets

The Nasdaq dropped slightly after a strong rally in the previous session. The dip reflected investors taking a breather, particularly in the technology sector, which has been a primary driver of recent gains.

Profit-taking weighed on major tech names, with traders locking in gains amid broader uncertainty about the next catalysts for market momentum. Growth-focused stocks, particularly in areas such as semiconductors, cloud computing, and AI, experienced mild pullbacks.  The broader market was higher with the Dow jones leading the way with almost a one percent rise.

European Markets

European stocks traded higher on Trump’s Davos speech as he tells Davos elites he will demand lower interest rates and oil prices, while asserting companies must make their products in the USA or face tariffs.

Broader sentiment by European investors was still a cautious tone, with investors weighing growth prospects against inflationary pressures and the European Central Bank’s (ECB) ongoing monetary policies

Puma SE was a notable underperformer, with its stock plunging to a near seven-year low following an earnings report that missed market expectations. The sportswear giant cited challenges such as higher costs, weaker consumer demand in key markets, and increased competition.

UK’s FTSE 100 rose to  record levels, as the severe UK factory downturn eased a bit in January. Consumer confidence in the British economy tumbled to a new low amid concerns over a  likely imminent recession.

Corporate Stock News

Air Products and Chemicals Inc

• Activist investor Mantle Ridge is set to win several board seats at Air Products, with current estimates suggesting three seats. Votes are still being counted in this heated board battle.

Alaska Air Group Inc

• ALK Exceeded Q4 profit expectations with an adjusted profit of $0.97/share. Forecasts a smaller-than-expected Q1 loss due to robust travel demand and pricing power.

Alphabet Inc & Apple Inc

• UK regulators launched an investigation into the companies’ dominance in app stores, operating systems, and browsers, with a report due by October 2025.
• Alphabet Inc: HTC will sell part of its XR headset division to Google for $250M to strengthen Android XR development.

American Airlines Group Inc

• Forecasts 2025 adjusted EPS between $1.70 and $2.70, below Wall Street estimates. Reported Q4 profit of $590M, up significantly from $19M in the prior year.

Boeing Co

• U.S. Transportation Department nominee plans to maintain production caps on Boeing’s 737 MAX until safety concerns are resolved. Boeing’s union is investigating claims of work being shifted to non-union locations.

Broadridge Financial Solutions Inc

• Plans a 26% expansion of its India tech workforce to 6,800 employees within three years, focusing on modernizing technology and entering the Indian market.

Comcast Corp & Warner Bros Discovery Inc

• Warner Bros Discovery’s CNN will lay off hundreds of employees to refocus on digital audiences. Comcast’s NBC News is also planning layoffs.

Discover Financial Services

• DFS Q4 profit tripled to $1.29B ($5.11/share) due to lower provisions for credit losses and increased interest income.

Electronic Arts Inc

• Reduced annual bookings forecast for fiscal 2025, citing weakness in its soccer franchise, sparking concerns over its sports division.

Elevance Health Inc

• Beat Q4 profit estimates with adjusted EPS of $3.84 and expects 2025 adjusted EPS between $34.15 and $34.85.

Ford Motor Co

• Recalling 272,817 Bronco Sport and Maverick vehicles due to potential 12-volt battery failures.

Frontier Group Holdings Inc

• Senators demand transparency over possible seat fee manipulation based on consumer data, potentially undermining consumer trust.

General Electric Co

• Reported Q4 adjusted profit of $1.32/share, surpassing expectations. Announced $7B share buyback and increased dividend by 30%.

General Motors Co

• Hyundai Motor is in talks with GM to supply commercial EVs and aims to finalize agreements by Q1 2025.

Henry Schein Inc

• Activist investor Ananym Capital is pushing for board changes, cost cuts, and leadership succession planning.

HSBC Holdings Plc

• Plans to close international payments app Zing, likely leading to 400 job losses as part of cost-cutting measures.

Kinder Morgan Inc

• Narrowly missed Q4 profit expectations; announced the Trident Intrastate pipeline project with a 2027 launch.

KKR & Co Inc

• Combining its real estate and infrastructure units under a single leader, managing $157B in assets.

Lululemon Athletica Inc

• KeyBanc raised the target price to $420, citing strong top-line momentum amid macroeconomic challenges.

Meta Platforms Inc

• Indian tribunal suspended a five-year data-sharing ban between WhatsApp and Meta, alleviating concerns over its ad business.
• In the EU, Meta’s revised no-ads subscription model faces potential compliance issues with privacy laws.

New Fortress Energy Inc

• Signed an agreement with Energiza to supply natural gas to a power plant in Puerto Rico, operational by 2028.

Paramount Global & Walt Disney Co

• FCC reinstated complaints regarding election coverage moderation and TV appearances by political figures.

Shell Plc

• Announced leadership changes with Machteld de Haan becoming the new head of downstream and renewables.

Steel Dynamics Inc

• Q4 revenue missed expectations due to increased imports of flat-rolled steel, causing pricing pressure.

Tesla Inc

• Tesla is raising car prices in Canada by up to C$6,254.78 for Model 3 and C$4,000 for Model Y, S, and X variants.

Uber Technologies Inc

• Indian government investigates differential pricing practices for Android and Apple users.