Global Market Update
- S&P 500 and Nasdaq:
- Marginal Gains: Both the S&P 500 and Nasdaq experienced marginal gains. Despite ongoing concerns about inflation, particularly highlighted by the latest Consumer Price Index (CPI) data, investors seemed to find some reassurance in the modest uptick. However, the cautious sentiment prevailed, with investors remaining vigilant about the persistence of inflationary pressures.
- European Shares:
- Positive Corporate Results: European shares recorded gains, supported by positive corporate earnings reports. As companies continue to release their quarterly results, upbeat earnings announcements provided a boost to investor sentiment. This trend of positive corporate performance helped lift European markets despite lingering concerns about inflation and geopolitical tensions.
- Japan’s Nikkei:
- Decline Amidst Expectations of BOJ Policy Shift: Japan’s Nikkei index continued its decline as traders adjusted their positions in anticipation of the Bank of Japan (BOJ) potentially exiting its negative interest rate policy. Speculation about the central bank’s policy shift prompted market participants to reassess their investment strategies, leading to some volatility in Japanese equities.
- Canada’s Main Stock Index:
- Oil Price Boost: Canada’s main stock index saw a slight increase, largely driven by a rise in oil prices. The energy sector, which is a significant component of the Canadian stock market, benefited from the uptick in oil prices. This positive momentum helped offset any broader market concerns.
- Currency Markets:
- Yen Weakening Against USD: The Japanese yen depreciated against the U.S. dollar, reflecting broader currency market dynamics. Factors such as diverging monetary policies between the Bank of Japan and the U.S. Federal Reserve, as well as market sentiment and risk appetite, influenced the yen’s movement relative to the dollar.
- USD Softness Against Major Currencies: Despite the yen’s weakness, the U.S. dollar experienced some softness against a basket of major currencies. This may have been driven by factors such as profit-taking, concerns about the pace of U.S. interest rate hikes, or geopolitical developments impacting market sentiment.
- Gold Market:
- Retreat from Near-Record Highs: Gold prices retreated from their recent near-record highs. The precious metal, often considered a safe-haven asset, may have seen profit-taking or reduced demand as investor sentiment improved slightly, reducing the perceived need for safe-haven investments. Additionally, any fluctuations in the U.S. dollar and expectations regarding monetary policy could have influenced gold prices.
Corporate News
- Goldman Sachs Group Inc:
- Expansion of Private Credit Portfolio: Goldman Sachs Asset Management aims to increase its private credit portfolio to $300 billion in five years from the current $130 billion. This aggressive expansion plan is part of a broader strategy laid out by the company’s senior executive.
- National Bank of Canada:
- Potential Sale of Cambodian Unit: National Bank of Canada is exploring options for its Cambodian unit, ABA Bank, including a potential sale for more than $2 billion. Bloomberg reports suggest that discussions are underway, but no final decisions have been made.
- New Zealand Transport Accident Investigation Commission:
- Seizure of Black Boxes: Following an incident involving a LATAM Airlines Boeing 787 that left more than 50 people injured, New Zealand’s Transport Accident Investigation Commission announced the seizure of the cockpit voice recorder and flight data recorder for investigation purposes.
- Archer-Daniels-Midland Co (ADM):
- DOJ Subpoenas and Financial Results: ADM revealed that some of its employees have received subpoenas from the Department of Justice regarding an ongoing investigation into its accounting practices. This announcement comes alongside the release of its financial results, which were delayed due to the investigation.
- Oracle Corp:
- Cloud Computing Progress: Oracle experienced a surge in its stock price following indications of progress in its cloud computing endeavors, particularly through its partnership with AI chip giant Nvidia. Despite posting a profit increase for the third quarter, Oracle’s revenue fell slightly below analysts’ expectations.
- Alcoa Corp:
- Acquisition of Alumina: Alcoa announced its acquisition of Alumina in an all-stock deal valued at $2.2 billion. This move solidifies Alcoa’s position as one of the world’s largest producers of alumina and bauxite.
- 3M Co:
- Leadership Change: 3M announced the appointment of William Brown as its new CEO, effective May 1, 2024. Brown, the former CEO of L3Harris Technologies, will succeed Michael Roman, who will transition to the role of executive chairman.
- Albertsons Companies Inc & Kroger Co:
- Antitrust Hearing Set: A U.S. District Judge set a hearing date for August 26 to consider the Federal Trade Commission’s request for a preliminary injunction to block Kroger’s $24.6 billion acquisition of Albertsons. The FTC and several states have raised concerns about the deal’s potential impact on competition in the grocery market.
- Alaska Air Group Inc:
- Narrower Loss Forecast: Alaska Air Group forecasted a narrower-than-expected first-quarter loss due to strong travel demand. The company cited an unspecified partial compensation received from Boeing, despite ongoing uncertainty surrounding aircraft delivery timings.
- Acadia Pharmaceuticals Inc & Pfizer Inc:
- Clinical Trial Results: Acadia Pharmaceuticals announced the discontinuation of further clinical trials for its antipsychotic drug, pimavanserin, after it failed to demonstrate efficacy in reducing negative symptoms of schizophrenia. Separately, Pfizer reported positive results for a combination treatment using its drug, Adcetris, in patients with a type of blood cancer.
Top Analyst Ratings
Ballard Power Systems Inc: TD Securities cuts target price to $3 from $3.75, after the company posted a higher-than-expected loss in its fourth-quarter results.
• Boyd Group Services Inc: ATB Capital Markets raises target price to C$350 from C$300, ahead of the company reporting its fourth-quarter result.
• mdf Commerce Inc: National Bank of Canada raises target price to C$5.80 from C$4, citing privatization offer from private equity firm KKR Inc.
• MEG Energy Corp: JPMorgan raises target price to C$34 from C$33, citing a light maintenance year in 2024.
Costco Wholesale Corp: TD Cowen raises target price to $777 from $700, expecting that the company will continue to deliver robust earnings growth.
• Booking Holdings Inc: Ascendiant Capital Markets raises target price to $3950 from $3900, citing the company’s strong outlook for 2024.
• Leggett & Platt Inc: Piper Sandler cuts target price to $16 from $18, following deeper analysis of LEG’s balance sheet and cash flows
• Oracle Corp: Piper Sandler raises target price to $140 from $122, after the company reported strong fourth-quarter results and higher estimates on the back of AI-fueled cloud momentum.
• Take-Two Interactive Software Inc: Ascendiant Capital Markets cuts target price to $172 from $184, as the company lowered its guidance for financial year 2024.
