Market News & Analysis: November 12th, 2024

Global Stock Markets

Canadian Markets

Canada’s main stock index, the TSX rose slightly, despite a decline in metal prices which were weighing  on Canadian mining stocks. Investors shifted their focus to earnings reports, as Shopify soared on holiday sales forecasts. Lower metal prices, particularly in gold and copper, dragged on some of the resource-heavy sectors, but gains in other areas, like technology or financials, helped support the index overall. Earnings reports became a key driver as companies began to unveil their quarterly performance, offering clues about the economic outlook and corporate health.

American Markets

U.S. stocks struggled, with major indexes experiencing drops as investors began to take profits after the recent rally. The market’s pullback was also fueled by concerns over the potential geopolitical and economic implications of Donald Trump’s influence on foreign policy. Traders feared that a hawkish approach to China, which Trump could usher in with the appointment of a tough-talking diplomat, might escalate tensions between the two largest economies in the world. This would not only affect trade and economic growth prospects but also put pressure on the global supply chains and financial markets. As a result, U.S. stock indexes dipped as investor sentiment soured.

European Markets

The mood in Europe was also cautious, particularly for companies with significant exposure to China. As Trump’s rhetoric and actions on China became a central theme, heavyweight European stocks linked to Chinese demand or trade faced heightened risks. The worries about an escalation in U.S.-China tensions led to sell-offs in shares of European firms that rely on Chinese consumers, exports, and supply chains.

Chinese Markets

Chinese stocks fell sharply, dropping to a seven-week low, as traders were spooked by concerns over the state of the Chinese economy, and U.S. relations.

Japanese Markets

In Japan, the Nikkei 225 index gave up earlier gains and closed lower, primarily due to declines in semiconductor-related stocks. The semiconductor sector had been one of the key drivers of Japan’s market in recent months, but the afternoon session saw profit-taking and a broader pullback. The decline in semiconductor shares reflected ongoing concerns about slowing demand, especially in key markets like China, where the tech sector had been facing increased regulatory scrutiny.

Corporate Stock News

• Affirm Holding Inc & Visa Inc: Visa partnered with Affirm to launch a card in the U.S. combining debit and buy-now-pay-later features, expanding into the UAE and planning further growth in Europe. This collaboration reflects growing ties between fintech and traditional finance sectors.
• Alibaba Group Holding Ltd: Alibaba reported strong sales growth during its Singles’ Day sales period, although it did not release total revenue figures. 45 brands surpassed 1 billion yuan in GMV, with household appliances seeing increased demand.
• American Airlines Group Inc, JetBlue Airways Corp & Spirit Airlines Inc: Following a bullet strike on a JetBlue flight from Haiti, the airline extended its suspension of flights to and from Haiti until Dec. 2. Spirit Airlines also reported damage from gunfire on a flight bound for Port-au-Prince. All flights to and from Haiti were canceled.
• Boeing Co: Avia Solutions ordered 40 Boeing 737 MAX 8 jets worth approximately $2.17 billion, with an option to order 40 more. The jets will be delivered starting in 2030.
• Cardinal Health Inc: Cardinal Health announced two major acquisitions, buying a 71% stake in GI Alliance and acquiring Advanced Diabetes Supply Group for a combined value of $3.9 billion, expanding its offerings in gastroenterology and home healthcare.
• Chipotle Mexican Grill Inc: Shareholders filed a lawsuit claiming Chipotle failed to disclose problems with inconsistent portion sizes, which negatively affected its stock price. The lawsuit seeks damages for stock purchasers from February to October 2024.
• EchoStar Corp: Dish bondholders rejected DirecTV’s debt-exchange offer, which included a $1.57 billion “haircut.” This proposal was part of a plan to sell Dish DBS, crucial to EchoStar’s financial situation.
• Endeavor Group Holding Inc: Endeavor will sell its OpenBet and IMG Arena businesses to a management-led group for $450 million, a necessary step in its plan to go private as part of a $13 billion deal.
• Grab Holdings Ltd: Grab raised its 2024 revenue forecast to between $2.76 billion and $2.78 billion, driven by strong food delivery and ride-hailing demand. It also raised its core profit outlook for the year.
• Home Depot Inc: Home Depot raised its annual same-store sales forecast despite a smaller-than-expected drop in Q3 sales. The company now expects a 2.5% decline in comparable sales for fiscal 2024.
• IAC Inc: IAC is exploring a spin-off of its majority stake in Angi following strong Q3 performance. However, Angi’s revenue has been declining, and the firm aims to address this while still benefiting from IAC’s core business.
• Live Nation Entertainment Inc: Live Nation exceeded profit estimates in Q3, benefiting from high ticket prices and cost control measures. Despite a 6% revenue decline, the concert business remained strong.
• On Holding AG: On raised its annual sales forecast after strong Q3 growth, driven by high demand for its running shoes. The company’s sales rose 32.3%, though adjusted profit missed expectations.
• Sea Ltd: Sea’s revenue rose 30.8% in Q3, driven by growth in its e-commerce, entertainment, and financial services segments. Its Shopee platform saw strong demand as consumers prepared for the holiday season.
• Shell Plc: Shell won an appeal against a ruling that required it to cut carbon emissions by 45% by 2030. The court found that such an order could negatively impact global emissions if customers switch to more polluting fuels.
• Spirit Airlines Inc: Spirit reported damage to a plane struck by gunfire while flying to Haiti, prompting a diversion to the Dominican Republic. The airline, along with JetBlue, canceled flights to and from Haiti.
• Tencent Music Entertainment Group: Tencent Music’s Q3 revenue missed estimates, mainly due to a decline in its social entertainment segment, impacted by China’s anti-gambling regulations. However, its music unit showed a 20.4% growth.
• VinFast Auto Ltd: VinFast secured a non-binding deal with Emirati investors to receive at least $1 billion in funding to support its electric vehicle business expansion.
• 23andMe Holding Co: 23andMe announced a 40% workforce reduction and a halt to the development of its therapies as part of a restructuring plan to cut costs and improve efficiency.