Global Market Overview:
Japan’s Nikkei and Bank of Japan’s Policy:
- Japan’s Nikkei index closed higher following the Bank of Japan’s decision to maintain ultra-easy monetary policy settings. The central bank’s commitment to these policies influenced positive market outcomes in Japan.
Chinese Stocks and Market Recovery:
- Chinese stocks experienced a more subdued recovery after touching a five-year low the previous day. The market exhibited a cautious rebound following a significant dip, indicating ongoing challenges and uncertainties in the Chinese financial landscape.
European Equities and ECB Policy Meeting:
- European equities, on the other hand, observed a slight decline as investors exercised caution ahead of the European Central Bank’s (ECB) policy meeting scheduled for later in the week. Uncertainty surrounding the ECB’s decisions influenced market dynamics in the European region.
Canadian Markets:
- The Canadian main stock index experienced a rise, buoyed by the gain in gold prices. The surge in gold prices was attributed to a weaker U.S. dollar, contributing to positive market sentiment in Canada.
U.S. Stock Market:
- U.S. stocks saw an increase, with investors anticipating the culmination of the earnings season. The market exhibited a degree of caution as it approached the peak of the earnings reports, with investors closely monitoring corporate performances.
Oil Prices:
- Oil prices declined as traders evaluated geopolitical tensions across different regions. Simultaneously, supply outages in the U.S. and the return of production in Libya contributed to the complex dynamics influencing oil markets.
Company-Specific Developments:
First Quantum Minerals Ltd:
- First Quantum Minerals faced challenges following the sudden closure of its flagship Panama copper mine, responsible for approximately 40% of its revenue. Shareholder SailingStone Capital Partners expressed concerns about historic missed opportunities in balance sheet management. The company announced measures to cut costs and explore various fundraising options, including the potential sale of smaller mines and seeking strategic investors for its larger mines.
Johnson & Johnson (J&J):
- J&J reported a fourth-quarter profit that exceeded Wall Street expectations. This positive outcome was attributed to robust demand for its blockbuster psoriasis treatment, Stelara, highlighting the pharmaceutical company’s strength in key product offerings.
Procter & Gamble (P&G):
- P&G reduced its annual profit forecast due to slowing price hikes and a business writedown related to its Gillette unit in December. The company faced challenges as earlier price increases lost momentum, impacting its financial outlook.
Canada’s Top Pension Funds and Private Credit:
- Four major Canadian pension funds, managing nearly C$1 trillion in assets, embarked on a significant expansion into private credit. This strategic move marked a shift away from traditional banking-dominated investments.
General Electric (GE):
- GE reported higher fourth-quarter profit, driven by strong demand for aircraft engine parts and services. Cost-cutting initiatives contributed to narrowing losses in its renewable energy unit, reflecting a positive financial performance.
Halliburton:
- Halliburton surpassed market expectations with its fourth-quarter profit, driven by international strength. Robust offshore and overseas drilling activities internationally boosted demand for oilfield services and equipment, positioning Halliburton favorably in the oil and gas sector.
3M Co (MMM): Earnings Forecast Below Estimates
Outlook: 3M Co, the U.S. industrial conglomerate, anticipates full-year earnings below analysts’ estimates for 2024. The forecasted profit range is between $9.35 and $9.75 per share, falling short of the average analyst estimate of $9.81. The company also reported an adjusted profit of $2.42 per share for Q4, compared to $2.18 per share a year earlier.
Brown & Brown Inc (BRO): Strong Fourth-Quarter Profit
Performance: The insurance brokerage reported a substantial 85% surge in fourth-quarter profit, reaching $268.6 million. This growth was attributed to higher commissions, improved fees, and better investment returns. Core commissions and fees rose by approximately 11.5%, reaching $964 million in the quarter.
D.R. Horton Inc (DHI): Misses Estimates for Q1 Profit
Results: The U.S. homebuilder, D.R. Horton, fell short of analysts’ estimates for first-quarter profit. The reported net income attributable to the company for the quarter was $2.82 per share, below the expected $2.88 per share. The company cited expectations of a sequential decline in homebuilding gross margins due to a higher incentive load.
Halliburton Co (HAL): Q4 Profit Beats Expectations
Results: Halliburton’s fourth-quarter profit exceeded market expectations, buoyed by strength in offshore and overseas drilling activities. The adjusted net income stood at 86 cents per share, compared to the expected 80 cents per share. International revenue rose by 10% to $3.3 billion, while North American revenue fell 7.7% to $2.4 billion.
Johnson & Johnson (JNJ): Beats Expectations in Q4
Results: Johnson & Johnson reported fourth-quarter profit above Wall Street expectations. Strong demand for its blockbuster psoriasis treatment Stelara and the resilience of its medical device unit contributed to the positive performance. The adjusted profit per share was $2.29, slightly exceeding the expected $2.28 per share.
Procter & Gamble Co (PG): Cuts Annual Profit Forecast
Update: Procter & Gamble reduced its annual profit forecast, citing a slowdown in price hikes and a write-down of the value of its Gillette business in December. The company now expects fiscal 2024 earnings to range from a fall of 1% to in line with fiscal 2023 earnings per share, compared with its previous forecast of 6% to 9% growth.
RTX Corp: Upbeat 2024 Profit Forecast
Outlook: Aerospace and defense giant RTX Corp provided an optimistic outlook for the full year, despite warning of a wider-than-expected loss in the first quarter due to the grounding of Boeing 737 MAX 9 airplanes. The company anticipates an adjusted profit of $9-$11 per share in 2024, exceeding the Wall Street estimate of $9.58 per share.
Verizon Communications Inc (VZ): Strong Q4 Subscriber Additions
Performance: Verizon reported strong demand for its wireless plans, leading to its highest quarterly subscriber additions in nearly two years. The telecom firm added a net 449,000 monthly bill-paying wireless phone subscribers in Q4 2023, surpassing estimates. Verizon expects adjusted profit in 2024 to be between $4.50 and $4.70 per share.
Zions Bancorporation NA (ZION): Q4 Profit Decline
Results: Zions Bancorporation:
Zion Bancorporation forecast a slight decline in net interest income for 2024. The fourth-quarter profit dropped by 58%, with net interest income contracting to $583 million. Total deposits rose by 5%, reaching $75 billion, while loans and leases increased by 4% to $57.8 billion.
CG Oncology Inc: Aims to Raise $306 Million in IPO
IPO News: Cancer drug developer CG Oncology Inc is looking to raise up to $306 million in its U.S. initial public offering, reflecting strong demand for new share sales. The company plans to sell 17 million shares priced between $16 and $18 each, aiming for a valuation of $1.1 billion in the IPO.
Amazon.com Inc (AMZN): Fined for “Excessively Intrusive” Surveillance
Regulatory Action: French regulator CNIL fined Amazon France Logistique $35 million for an “excessively intrusive” surveillance system used to monitor staff. The system, including tracking inactivity
Top Analyst Ratings:
Bank of Hawaii Corp (BOH): Piper Sandler Cuts Target Price
New Target Price: $69
Previous Target Price: $70
Rationale: Piper Sandler has adjusted its target price for Bank of Hawaii Corp, citing concerns over the company’s three consecutive quarters of net interest margin compression. This move indicates a more conservative outlook on the bank’s near-term financial performance.
Mastercard Inc (MA): JPMorgan Raises Target Price
New Target Price: $504
Previous Target Price: $484
Rationale: JPMorgan is bullish on Mastercard Inc, lifting its target price on the expectation that the company’s 2024 full-year guidance will generate a positive stock reaction. This adjustment suggests increased confidence in Mastercard’s strategic direction and growth potential.
News Corp (NWSA): JPMorgan Raises Target Price
New Target Price: $31
Previous Target Price: $29
Rationale: JPMorgan has increased its target price for News Corp, citing an improved business profile for the company in 2024. This upward revision reflects optimism about News Corp’s ability to enhance its market position and financial standing.
Qualcomm Inc (QCOM): Wells Fargo Raises Target Price
New Target Price: $120
Previous Target Price: $110
Rationale: Wells Fargo anticipates better-than-expected first-quarter results for Qualcomm Inc, driven by accelerating sales in the mobile chip segment. This adjustment signals confidence in Qualcomm’s performance amid a competitive semiconductor landscape.
Visa Inc (V): JPMorgan Raises Target Price
New Target Price: $302
Previous Target Price: $293
Rationale: JPMorgan has raised its target price for Visa Inc ahead of the company’s first-quarter results. This indicates positive expectations regarding Visa’s financial performance and market dynamics.
Manulife Financial Corp (MFC): Evercore ISI Raises Target Price
New Target Price: C$30
Previous Target Price: C$26
Rationale: Evercore ISI has increased its target price for Manulife Financial Corp, anticipating a $13 billion reinsurance transaction by the insurer. This adjustment suggests a favorable outlook for Manulife Financial Corp’s strategic initiatives and financial health.
Sun Life Financial Inc (SLF): Evercore ISI Raises Target Price
New Target Price: C$78
Previous Target Price: C$76
Rationale: Evercore ISI has raised its target price for Sun Life Financial Inc, expecting the company to sustain its sales recovery in the Asian market. This adjustment reflects optimism about Sun Life Financial Inc’s growth prospects in the region.
