Stock Market Update April 25th, 2024

Global Markets

• Meta’s disappointing quarterly results contributed to the decline in U.S. stock indexes, particularly affecting megacap stocks. Investors were cautious ahead of the release of GDP and inflation data later in the day.
• In contrast, Britain’s FTSE 100 stock index reached a record high following BHP Group’s bid for miner Anglo-American. Additionally, positive earnings reports from companies like Unilever, AstraZeneca, and Barclays boosted investor sentiment.
• The yen depreciated to a 34-year low against the dollar and a 16-year low against the euro, indicating a strengthening of the U.S. currency and the euro against the Japanese currency. Meanwhile, the Nikkei dropped 2% ahead of the Bank of Japan Policy meeting scheduled for Friday.
• Futures for Canada’s main stock index declined, influenced by disappointing corporate earnings reports from Canadian companies.

Corporate News

• Anglo American and BHP Group Deal:
  • Anglo American received an all-share buyout proposal from BHP Group, potentially making BHP the largest copper producer globally.
• BASF First Quarter Earnings:
  • BASF reported a 5.3% year-on-year decline in adjusted earnings for the first quarter, mainly due to higher bonus provisions, but still exceeded analysts’ consensus.
• Mercedes-Benz’s Strategy in China:
  • Mercedes-Benz’s China chief emphasized continued investment in partnerships with Chinese firms like Baidu, highlighting China’s importance in their global strategy.
• Align Technology Inc’s Revenue Growth:
  • Align Technology raised its annual revenue growth forecast after beating Wall Street estimates for first-quarter profit, driven by strong demand for its clear teeth aligners, particularly among teenagers and younger patients.
• American Airlines Group Inc’s Forecast:
  • American Airlines Group forecasted a current-quarter profit largely above analysts’ expectations, anticipating a rebound in business travel and strong demand in the upcoming summer season.
• AstraZeneca PLC’s Strong Performance:
  • AstraZeneca exceeded market expectations for quarterly revenue and profit, boosted by demand for its blockbuster drugs and steady sales from partnered medicines.
• Bristol Myers Squibb’s Loss:
  • Bristol Myers Squibb reported a first-quarter loss, with charges related to recent acquisitions offsetting a 5% increase in revenue.
• Caterpillar Inc’s Rise in Quarterly Profit:
  • Caterpillar posted a rise in quarterly profit, driven by higher prices for its construction equipment as demand eased from last year’s boom.
• Check Point Software Technologies Ltd’s Higher Profit:
  • Check Point Software Technologies reported higher-than-expected profit for the first quarter, aided by double-digit growth in its AI-powered security platform.
• Chipotle Mexican Grill Inc’s Raised Sales Forecast:
  • Chipotle Mexican Grill raised its full-year sales forecast on resilient demand for its burritos and rice bowls, despite higher menu prices.
• Comcast Corp’s Revenue Beat:
  • Comcast beat quarterly revenue estimates, driven by higher-than-expected subscriber growth at its Peacock streaming service and strong attendance at its theme parks.
• Deutsche Bank AG’s Profit Increase:
  • Deutsche Bank posted a better-than-expected 10% increase in first-quarter profit, fueled by a resurgence in fixed-income trading and deal-making.
• Ford Motor Co’s Earnings Beat:
  • Ford Motor Co posted first-quarter earnings that exceeded Wall Street’s expectations, supported by a strong performance in its commercial vehicle division and an increase in hybrid vehicle sales.
• Harley-Davidson Inc’s Decline in Profit:
  • Harley-Davidson Inc posted a 23% decline in first-quarter profit, attributed to slow sales of its motorcycles in North America due to high borrowing costs.
• Lam Research Corp’s Revenue Above Expectations:
  • Lam Research Corp reported quarterly revenue above Wall Street expectations, driven by chipmakers ordering more of its equipment used to manufacture semiconductors for artificial intelligence applications.
• Meta Platforms Inc’s Disappointing Forecasts:
  • Meta Platforms Inc disappointed investors with forecasts of higher expenses and lighter-than-expected revenue, resulting in a significant drop in its stock market value.
• Merck & Co’s Raised Annual Forecast:
  • Merck & Co raised its annual profit and revenue forecast, buoyed by strong sales for its blockbuster cancer drug Keytruda.
• Molina Healthcare Inc’s Beat on Earnings:
  • Molina Healthcare Inc beat Wall Street estimates for first-quarter earnings, aided by higher premiums in its government-backed Medicaid insurance plans.
• O’Reilly Automotive Inc’s Miss on Profit:
  • O’Reilly Automotive Inc missed analysts’ estimates for first-quarter profit, affected by increased costs and tough weather conditions.
• Raymond James Financial Inc’s Rise in Profit:
  • Raymond James Financial Inc posted an 11% rise in second-quarter adjusted profit, driven by strong performance in its capital markets business.
• Rollins Inc’s Exceeding Revenue Expectations:
  • Rollins Inc topped market expectations for first-quarter revenue, supported by pricing actions and steady demand for its pest control services.
• ServiceNow Inc’s Subscription Revenue Forecast:
  • ServiceNow Inc forecasted second-quarter subscription revenue below market expectations, citing cautious spending by businesses in a tough economy.
• Southwest Airlines Co’s Cut in Aircraft Deliveries:
  • Southwest Airlines Co slashed its estimates for new aircraft deliveries from Boeing in 2024 for the third time, planning cost-cutting measures to mitigate the impact.
• Teradyne Inc’s Forecast Beat:
  • Teradyne Inc forecasted second-quarter profit and revenue above Wall Street estimates, driven by strong demand for its chip-testing equipment.
• Ternium SA’s Rise in Net Profit:
  • Ternium SA posted a first-quarter net profit increase of 2%, driven by larger shipments of steel, though it predicted that margins could shrink in the coming months.
• Tyler Technologies Inc’s Beat on Revenue:
  • Tyler Technologies Inc beat Wall Street estimates for first-quarter revenue, supported by strong demand for its information technology services.
• United Rentals Inc’s Beat on Profit:
  • United Rentals Inc beat analysts’ estimates for first-quarter profit, backed by robust demand across its markets.
• Universal Health Services Inc’s Exceeding Profit Estimates:
  • Universal Health Services Inc topped Wall Street estimates for first-quarter profit, aided by higher patient admissions amid a resurgence in demand for some non-urgent surgeries.
• Waste Management Inc’s Beat on Profit:
  • Waste Management Inc beat analysts’ estimates for first-quarter profit, driven by higher prices and steady demand for garbage collection and disposal.
• Whirlpool Corp’s Job Cuts:
  • Whirlpool Corp announced plans to lay off about 1,000 salaried employees globally, aiming to trim up to $400 million in costs this year.
• IBM’s Acquisition of HashiCorp:
  • IBM announced the acquisition of HashiCorp in a deal valued at $6.4 billion, expanding its cloud-based software products to tap into the AI-powered demand.
• Rubrik Inc’s IPO Pricing:
  • Rubrik Inc priced its initial public offering at $32 per share, above its indicated price range, aiming to raise $752 million.
• Morgan Stanley’s Reorganization:
  • Morgan Stanley Private Equity Asia (PEA) is reorganizing its teams in the Asia-Pacific region, with Chin Chou retiring as CEO of Asia.
• Alphabet Inc’s Settlement and Attorney Fees:
  • Three U.S. law firms requested $217.6 million in attorney fees for a browser data privacy class action settlement against Alphabet’s Google, estimating the settlement’s value up to $7.8 billion.
• Apple Inc’s Loss of China’s Biggest Smartphone Seller Title:
  • Apple lost its title as China’s biggest smartphone seller in the first quarter of 2024, with Honor and Huawei tying for the top spot.
• Boeing Co’s DOJ Decision Timeline:
  • • Chevron Corp & Hess Corp:
      • Record date set for Chevron-Hess merger vote on April 12.
      • Date for the shareholder meeting undecided.
      • Completion date of the merger uncertain.
    • Cisco Systems Inc:
      • Hackers exploit vulnerabilities in Cisco’s security devices.
      • Group called “UAT4356” identified as state-sponsored.
      • Customers urged to update software immediately.
    • Hawaiian Electric Industries Inc:
      • Power conservation lifted in Hawaii after generation capacity restored.
      • Keahole CT-5, Puna Steam, and Kanoelehua CT-1 units back online.
      • Combined capacity of restored units nearly one-third of peak demand.
    • Micron Technology Inc:
      • Biden announces preliminary agreement with Micron for chip subsidies.
      • Up to $6.14 billion in subsidies for chip factories in NY and Idaho.
      • Aim is to boost domestic chip manufacturing and reduce reliance on China and Taiwan.
    • Southwest Airlines Co:
      • Flight attendants approve new contract with immediate 22% pay raise.
      • Contract also includes 3% annual raises till May 2028.
      • Approval follows two previous unsuccessful attempts to secure a deal.
    • VinFast Auto Ltd:
      • Vietnamese billionaire to invest additional $1 billion in VinFast.
      • Considering listings for other companies under his control.
      • VinFast sold majority of its cars to electric taxi company owned by the billionaire.
    • Teck Resources:
      • Misses Q1 profit estimates due to lower steelmaking coal sales.
    • Bombardier:
      • Reports higher first-quarter cash burn due to increased inventory for business jet production. The U.S. Justice Department plans to decide as soon as late May whether Boeing violated an agreement related to fatal crashes in 2018 and 2019.

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