Global Markets
Canada’s TSX is flat after the Bank of Canada cut interest rates to 4.5%.
The Toronto Stock Exchange (TSX) remained largely unchanged following the Bank of Canada’s decision to reduce its key interest rate to 4.5%. This move was intended to stimulate the economy by making borrowing cheaper for businesses and consumers. Despite the rate cut, investor response was muted, possibly due to concerns over the broader economic outlook and the impact of global market trends.
U.S. markets dropped, with the Nasdaq falling sharply after earnings from Tesla and Alphabet heightened investor concerns about the dominance of Big Tech stocks that have boosted Wall Street to record highs.
In the United States, the stock markets experienced a downturn. The Nasdaq Composite Index, known for its concentration of technology stocks, saw a significant decline. This drop was precipitated by quarterly earnings reports from Tesla and Alphabet (Google’s parent company), which did not meet investor expectations. The disappointing results from these major tech players raised concerns about the sustainability of the tech sector’s dominance, which has been a driving force behind Wall Street’s record highs in recent years.
European markets were also down, with weak results from LVMH and other companies dampening investor sentiment.
European stock markets mirrored the negative sentiment. Major indices fell, influenced by underwhelming earnings reports from prominent companies such as LVMH, the world’s largest luxury goods conglomerate. The poor performance of such high-profile companies led to a broader loss of confidence among investors regarding the health of the European corporate sector.
In Japan, the Nikkei fell for the sixth straight session as the yen continued to strengthen.
Japan’s Nikkei 225 Index declined for the sixth consecutive trading session. The persistent drop was partly attributed to the strengthening yen, which poses a challenge for Japanese exporters by making their goods more expensive and less competitive in international markets. The yen’s appreciation reflects investor caution and a flight to safer assets amid global uncertainties.
The U.S. dollar was little changed, with traders watching out for an inflation reading on Friday and a Federal Reserve meeting next week.
The value of the U.S. dollar remained relatively stable. Market participants were in a wait-and-see mode, anticipating important economic data and policy signals. An upcoming inflation report was expected to provide insights into price trends, while a Federal Reserve meeting next week could offer guidance on future monetary policy decisions.
Oil prices pared losses, while gold prices edged higher.
In the commodities market, oil prices managed to recover some of their earlier losses. This partial rebound could be attributed to various factors, including supply concerns and geopolitical developments. Conversely, gold prices saw a modest increase, reflecting its status as a safe-haven asset in times of market volatility and economic uncertainty.
Corporate Stock News
- Alphabet Inc: Surpassed Q2 revenue and profit estimates due to strong digital advertising and cloud computing sales but noted high capital expenses; shares dropped in premarket trading.
- AT&T Inc: Added 419,000 new wireless subscribers in Q2, surpassing expectations of 284,800, although slower phone upgrades affected revenue.
- Boeing Co: Resumed deliveries of its 737 MAX airplanes to China after resolving regulatory issues.
- Boston Scientific Corp: Increased its full-year profit outlook, driven by strong demand for heart devices, boosting its shares in premarket trading.
- Capital One Financial Corp: Profit fell 61% in Q2 due to higher provisions for loan losses, with net income dropping to $531 million from $1.35 billion a year earlier.
- Chemours Co: A federal court dismissed Chemours’ lawsuit against the EPA over a drinking water advisory for “forever chemicals,” ruling it wasn’t a final agency action.
- Chubb Ltd: Q2 profit exceeded estimates, helped by increased premiums and better investment returns, resulting in a 1% rise in extended trading.
- CoStar Group Inc: Lowered its annual revenue forecast due to high interest rates affecting spending and property buying.
- CrowdStrike Holdings Inc & Microsoft Corp: Fortune 500 companies face $5.4 billion in losses from a recent CrowdStrike outage, with insured losses between $540 million and $1.08 billion; the outage was caused by a bug in CrowdStrike’s quality control mechanism.
- Delta Air Lines Inc: Reported significantly fewer cancellations as it worked to return to normal operations after canceling over 6,000 flights since Friday.
- Deutsche Bank AG: Posted a loss in Q2 due to a €1.3 billion provision for an investor lawsuit and increased credit loss forecasts, affecting share buyback plans and share prices.
- Enphase Energy Inc: Beat Q2 profit estimates, driven by recovering demand in the U.S.
- Estee Lauder Companies Inc: Announced Akhil Shrivastava as the new CFO effective Nov. 1, with Tracey Travis supporting the transition until her retirement in June 2025.
- First Quantum Minerals Ltd: Jiangxi Copper, the largest shareholder, will nominate one board member under a new shareholder rights agreement, including a standstill restriction on acquiring more shares.
- Freeport McMoran Inc: Plans to invest around $7.5 billion to expand its El Abra copper mine in Chile, with the project expected to take seven to eight years.
- Honda Motor Co Ltd: NHTSA closed its investigation into 1.5 million Honda vehicles over power loss, stating operators can still control the vehicle.
- Hotel Workers Strike Authorization Votes: About 13,500 unionized hotel workers in four U.S. cities plan to vote on strike authorization next month as contract talks with major hotel chains stall.
- Leidos Holdings Inc: Hackers leaked internal documents from Leidos, with the breach stemming from a third-party vendor incident.
- LVMH: Sales growth slowed in Q2 due to reduced spending by Chinese shoppers on luxury fashion, despite a slight uptick in Western markets.
- Mattel Inc: Exceeded profit estimates despite a 1% drop in net sales, attributing success to cost control.
- Meta Platforms Inc: Released Llama 3, its largest AI model, capable of conversing in multiple languages and solving complex problems, challenging paid models from rivals.
- Nvidia Corp: Approved Samsung’s HBM3 chips for use in its GPUs, specifically the H20 model developed for the Chinese market under U.S. export controls.
- OneStream Inc & KKR & Co Inc: Raised $490 million in its U.S. IPO, pricing above the indicated range and valuing the company at $4.6 billion.
- Pfizer Inc: Gene therapy for hemophilia A showed significant efficacy in reducing annual bleeding episodes, bringing it closer to U.S. regulatory approval.
- Reckitt: Major shareholders are urging Reckitt to reconsider selling its Mead Johnson Nutrition division after legal and operational setbacks, per the Financial Times.
- Rivian Automotive Inc: Will face trial over allegations of encouraging former Tesla employees to steal trade secrets, with sufficient evidence presented for a trial.
- Rogers Communications Inc: Exceeded forecasts for wireless subscriber additions, gaining 112,000 new subscribers in Q2 against an estimate of 110,450, and reporting a net income of C$394 million, up from C$109 million a year earlier.
- Seagate Technology Holdings Plc: Forecasted Q1 revenue above Wall Street estimates due to increased demand for memory chips, boosting shares in extended trading.
- Teck Resources Ltd: Exceeded profit expectations due to increased copper production and prices, but lowered its full-year copper production forecast due to anticipated output decline at its Quebrada Blanca mine in Chile.
- Tesla Inc: Q2 profit margin hit a five-year low, missing earnings targets due to price cuts and increased AI project spending; shares fell in premarket trading.
- Texas Instruments Inc: Exceeded Q2 profit estimates thanks to stable demand for analog chips and lower manufacturing costs, particularly noting growth in China.
- Thermo Fisher Scientific Inc: Raised its annual profit outlook after a better-than-expected Q2 performance.
- Visa Inc: Q3 revenue growth fell short of expectations due to high borrowing costs limiting consumer spending, resulting in a rare miss.
