A survey of North American equities heading in both directions
On the rise
Newmont Corp. (NGT-T) was higher by 1.5 per cent after it said on Tuesday it would divest the Telfer project and its interest in the Havieron gold-copper project in Western Australia to Greatland Gold for up to US$475-million.
The sale is part of the global gold miner’s plans to divest non-core assets and trim its workforce to reduce debt following the completion of its about US$17-billion purchase of Australian miner Newcrest in November last year.
Greatland Gold, a UK-based mining development and exploration company, will buy Newmont’s 70-per-cent stake in the Haverion project. It already owns a 30-per-cent stake in the mine.
Newmont expects annual gold production to fall to 6.75 million ounces from the 6.93 million ounces it forecast in its second-quarter earnings once the transaction closes in the fourth quarter as expected.
The company also cut its copper production expectations to 145,000 tons for the year, compared with 152,000 tons earlier.
Brookfield Asset Management (BAM-T) gained 1.5 per cent after saying it will invest up to US$1.1-billion in Infinium, in a push to accelerate the availability of low-carbon sustainable aviation fuels (SAF).
Brookfield will invest more than US$200-million in Infinium’s Roadrunner project, which is currently under development in West Texas.
The asset manager will invest an additional US$850-million in other e-Fuels projects owned by Infinium globally.
Brookfield will join Breakthrough Energy Catalyst, which made a US$75-million investment in Infinium’s Roadrunner project last year.
In tandem with Catalyst’s investment, Infinium had singed a deal with American Airlines to sell commercial volumes of e-SAF starting in 2026.
Sustainable aviation fuels, which are developed by companies such as Infinium, offer ultra-low carbon alternatives to fossil-based fuels, which can be used as replacements in planes, ships, trucks and manufacturing processes.
These fuels have seen a surge in investments, driven by the U.S. Environmental Protection Agency’s Renewable Fuel Standard.
Infinium, a key player, provides electrofuels or eFuels like e-SAF and e-Diesel, produced by synthesizing captured CO2 and hydrogen from renewable or CO2-free electricity.
e-SAF is a cleaner alternative to SAF, but its production is limited, with few refineries and airlines committed to its use.
Oracle (ORCL-N) shares soared 11.5 per cent on Tuesday as the cloud computing company’s upbeat quarterly results and forecast reinforced investor confidence about its ability to narrow the gap with the market leaders.
The Texas-based firm’s cloud business - viewed as a less expensive option to leaders Microsoft (MSFT-Q) and Amazon (AMZN-Q) - has seen rapid adoption due to integration of artificial intelligence.
Oracle’s cloud services revenue rose 21 per cent to US$5.6-billion in the first quarter. Its overall revenue of US$13.31-billion beat estimates of US$13.23-billion.
“Q1 results were good overall and remain fundamentally positive on certain aspects of Oracle’s narrative, particularly Oracle’s ability to capitalize on AI training-related opportunities,” JP Morgan analysts said in a note.
Oracle’s shares have risen more than 32 per cent this year, while Microsoft and Amazon have added 8 per cent and 15 per cent, respectively.
Oracle’s cloud infrastructure is also powered by Nvidia’s hardware, widely considered the gold standard for AI semiconductors.
The company is also partnering with rival cloud service providers to make it simpler for its customers to connect their data across vendors. On Monday, it announced a tie-up with Amazon Web Services, after having signed a similar one with Alphabet’s Google Cloud in June.
“Now with the help of all big three (Azure, Google Cloud and now AWS joining force), we will continue to observe a nice cloud revenue lift as well as growth acceleration thanks to the multi-cloud partnership,” Bernstein analysts said in a note.
Oracle trades at a forward price-to-earnings ratio of 21.30, while Microsoft stood at 29.81 and Amazon at 31.59. At least five brokerages have raised their target price since Monday.
Tesla Inc. (TSLA-Q) increased 4.6 per cent on news t]he European Union will lower its proposed final tariffs and slightly trim rates for other electric vehicles from China after taking into account submissions by the companies.
Tesla’s proposed tariff rate will drop to 7.8 per cent, from 9 per cent, a source told Reuters. For BYD, there was no change to its 17-per-cent tariff. For Geely, the new rate would be 18.8 per cent from a previous 19.3 per cent. A peak rate of 35.3 per cent would apply to SAIC and other companies not cooperating with EU investigation, the source said.
These tariffs are on top of the EU’s standard 10-per-cent import duty for cars.
The European Commission, which is conducting the anti-subsidy investigation into EVs made in China, declined to comment. Tesla did not immediately respond to a Reuters’ request for comment.
Last month, the EU set out its initial proposal for final duties, establishing a separate rate of 9 per cent for Tesla EVs, a sharp reduction from the higher duty that will apply to all cooperating companies - now set at 20.7 per cent.
This tariff is due to apply to certain Chinese producers such as Chery, Great Wall Motor Co and NIO and a number of joint ventures between Chinese companies and EU automakers.
On the decline
Alimentation Couche-Tard (ATD-T) declined 1.4 per cent on reports U.S. antitrust regulators have told Seven & i it may probe a potential deal in an early sign that a merger could face regulatory scrutiny.
The Federal Trade Commission sent Seven & i a notice of its intent after Couche-Tard’s US$38.5-billion offer for the Japanese retail giant was made public on Aug. 19, sources told Reuters, requesting anonymity because they were not authorized to speak publicly about the matter.
The FTC reached out to the company and asked it to preserve all documents that may be relevant to a review of a potential acquisition by Couche-Tard, the sources said.
The FTC declined to comment. Couche-Tard also declined to comment.
Seven & i has rejected Couche-Tard’s approach, in part citing U.S. antitrust concerns.
Seven & i’s businesses include the Seven-Eleven convenience store chain in Japan and North America, while Couche-Tard businesses include the Couche-Tard and Circle K convenience store chains in North America.
A source familiar with the FTC’s thinking said the agency notified attorneys from the companies of their responsibility to advise clients to preserve documents. While there is no indication that the two companies have destroyed any documents, the FTC is concerned that defense attorneys are advising companies to destroy documents ahead of antitrust investigations.
Recent antitrust investigations that have included allegations of document destruction include cases against Google and Amazon.
TC Energy Corp. (TRP-T) was down 2.5 per cent after announcing its $1-billion deal to sell a minority stake in its Canadian natural gas pipeline system to a consortium of Indigenous communities has been delayed due to a transaction structuring issue.
The Canadian pipeline operator had said earlier this year it would sell a 5.34-per-cent stake in the NGTL system and Foothills assets in western Canada to an Indigenous-owned investment partnership, in a move to reduce its debt and finance new investments.
The widely anticipated deal was a key step to achieving the company’s $3-billion asset sale target for 2024.
The NGTL system, which is about 24,400 kilometres long, connects most of the natural gas production in western Canada to domestic and export markets.
TC Energy said on Tuesday it remains focused on a deal and would provide material updates as they become available.
A day after unveiling its iPhone 16 and other products at an event in California, Apple Inc. (AAPL-Q) lost ground after the European Union’s top court on Tuesday rejected its final legal challenge against an order from the bloc’s executive commission to repay 13 billion euros in back taxes to Ireland, bringing an end to the long-running dispute.
The European Court of Justice overruled a lower court’s earlier decision in the case, saying it “confirms the European Commission’s 2016 decision: Ireland granted Apple unlawful aid which Ireland is required to recover.”
The case drew outrage from Apple when it was opened in 2016, with CEO Tim Cook calling it “total political crap.” Then-U.S. President Donald Trump slammed European Commissioner Margrethe Vestager, who spearheaded the campaign to root out special tax deals and crack down on big U.S. tech companies, as the “tax lady” who “really hates the U.S.”
In its 2020 ruling, the European Union’s General Court disagreed with the European Commission, the bloc’s executive branch, which had accused Apple of striking an illegal tax deal with Irish authorities so that it could pay extremely low rates.
Investors were also concerned after China’s Huawei launching a tri-fold smartphone hours after the debut of a new iPhone.
On Tuesday, Huawei showed off its new Mate XT, which users can fold three ways. The device has already received more than 4 million pre-orders, for which no deposit is required, according to the company’s website.
It boasts an AI assistant with text summary, translation and editing functions, as well as AI-boosted image editing functions such as trimming unwanted parts of photos.
But with a price tag that starts at US$2,800 - more than twice the starting price of the comparable iPhone 16 Pro Max - and limited production, the tri-fold phone is likely to become more of a symbol of Huawei’s tech prowess than a major sales driver, analysts said.
“Production constraints and the high price point mean the new phone will likely not have a huge impact in terms of shipments,” said Will Wong, senior researcher at consultancy IDC.
“But it’s telling the consumers that it’s still the tech leader and the potential challenge it brings to Apple may be far beyond just market share.”
Southwest Airlines Co. (LUV-N) slipped 1.6 per cent after announcing it will revamp its board and the chairman will retire next year, but it intends to keep CEO Robert Jordan after a meeting with hedge fund Elliott Investment Management, which has sought a leadership shakeup at the airline including Mr. Jordan’s ouster.
Southwest said Tuesday that six directors will leave the board in November and it plans to appoint four new ones, who could include candidates put forward by Elliott.
Elliott, the fund led by billionaire investor Paul Singer, has built a 10-per-cent stake in recent weeks and advocated changes it says will improve Southwest’s financial performance and stock price. The two sides met Monday.
Elliott blames Southwest’s management for the airline’s stock price dropping by more than half over three years. The hedge fund wants to replace Mr. Jordan , who has been CEO since early 2022, and Chairman Gary Kelly, the airline’s previous chief executive. Southwest said Tuesday that Kelly has agreed to retire after the company’s annual meeting next year.
Elliott argues that Southwest leaders haven’t adapted to changes in customers’ preferences and failed to modernize Southwest’s technology, contributing to massive flight cancellations in December 2022. That breakdown cost the airline more than US$1-billion.
Southwest has improved its operations, and its cancellation rate since the start of 2023 is slightly lower than industry average and better than chief rivals United, American and Delta, according to FlightAware. However, Southwest planes have been involved in a series of troubling incidents this year, including a flight that came within 400 feet of crashing into the Pacific Ocean, leading the Federal Aviation Administration to increase its oversight of the airline.
Southwest was a profit machine for its first 50 years — it never suffered a full-year loss until the pandemic crushed air travel in 2020.
Hewlett Packard Enterprise (HPE-N) dropped 8.4 per cent after the AI server maker announced a US$1.35-billion mandatory convertible preferred stock offering to fund its acquisition of Juniper Networks (JNPR-N).
Earlier this year, HPE said it would acquire the networking equipment manufacturer for US$14-billion in an all-cash deal, in an attempt to enhance the company’s AI offerings.
HPE said net proceeds from the offering will be used to cover fees and expenses related to the pending acquisition.
A convertible preferred stock offering allows investors to buy preferred shares, which often fetch higher dividends than common shares. Investors also have the option to convert their preferred stocks into common shares.
The preferred stock offered by HPE will automatically convert into a number of common shares around Sept. 1, 2027, unless it has been redeemed or converted previously.
Investment banks Citigroup, J.P. Morgan and Mizuho will act as joint book-running managers for the offering, the company said.
Last week, HPE raised its annual profit forecast, citing increased demand for AI servers driven by higher enterprise spending on AI infrastructure.
Shares of Rubrik (RBRK-N) fell 1.5 per cent on Tuesday, as the markets braced for the expiry of a lockup period tied to its initial public offering, clouding the Microsoft-backed cybersecurity company’s upbeat second-quarter revenue.
The lockup period expires on Wednesday and typically that would allow company insiders and pre-IPO investors to sell their shares, which often puts pressure on the stock price.
Rubrik’s results, the second after it went public in April, indicate that businesses have been spending heavily to shield themselves from growing cyber attacks that have hit companies, including UnitedHealth Group, Microsoft and U.S. oilfield services firm Halliburton.
“While the pending IPO share-lockup expiry on Sept. 11 could cause some downward share price pressure, this report and the current robust cybersecurity spending environment confirm our positive Rubrik thesis,” brokerage CIBC wrote in a note.
If losses hold, Rubrik will be on track to shed more than US$350-million. The company had a market valuation of US$5.77-billion as of Monday’s close.
California-based Rubrik reported second-quarter revenue of about US$205-million, compared with analysts’ average estimate of US$196.2-million, according to LSEG data.
Its adjusted loss per share for the quarter was 40 US cents, compared with the estimates of a loss of 49 US cents per share.
With files from staff and wires