Stock Market Analysis & News: Oct 4th, 2024

Macro Market View

Canadian Markets

Canada’s TSX rose almost 1% during Fridays intraday trading activity. This positive movement was largely driven by an increase in Canada’s Purchasing Managers’ Index (PMI), which surged to 53 from a previous reading of 48. A PMI above 50 indicates expansion in the manufacturing sector, suggesting that economic activity is picking up pace and fostering investor confidence.

American Markets

In the United States, market indices also climbed following a robust jobs report. The unemployment rate fell to 4.1%, with the economy adding 254,000 jobs—significantly above the anticipated 140,000. This strong employment data bolstered optimism around consumer spending and economic growth, further encouraging market gains. However, the positive news comes amid ongoing geopolitical tensions, which continue to weigh on overall market sentiment and create uncertainty about future economic conditions.

Despite these positive indicators, investor sentiment remains cautious due to heightened geopolitical tensions, particularly in the Middle East. Concerns about potential conflicts affecting global oil supplies are leading to volatility in energy markets. Additionally, the focus is shifting toward the Federal Reserve, as new economic data may influence decisions regarding interest rate adjustments in the coming months. The Fed’s actions are closely monitored by investors, given their significant impact on financial markets.

European Markets

European shares saw a slight increase, bolstered by gains in regional energy stocks. The rise in oil prices, driven by fears of disruptions in crude supply due to geopolitical unrest, contributed to this positive movement. Investors are increasingly weighing the balance between potential supply issues in the Middle East and the current well-supplied state of the global oil market.

Japanese Markets

Japan’s Nikkei index closed modestly higher, although it recorded its steepest weekly decline in a month. The market’s reaction followed Prime Minister Shigeru Ishiba’s apparent shift in stance regarding interest rates, which has unsettled both the yen and market traders. This uncertainty highlights the sensitivity of the Japanese market to domestic monetary policy signals.

Corporate Stock News

• AbbVie Inc: The drugmaker lowered its 2024 adjusted profit forecast, citing $82 million in milestones and increased R&D expenses. The new forecast for adjusted profit per share ranges from $10.67 to $10.87.
• Alphabet Inc: Google announced it would stop linking to New Zealand news articles if the government passes a law requiring tech giants to pay for content. Meanwhile, Waymo plans to add Hyundai electric vehicles to its robotaxi fleet.
• Archer-Daniels-Midland Co: The company is temporarily idling its soybean processing plant in Iowa for maintenance, which may tighten soymeal supplies during the U.S. harvest.
• Boeing Co & Virgin Galactic Holdings Inc: The two companies settled a lawsuit related to Boeing’s work on Virgin Galactic’s space tourism mothership.
• Cisco Systems Inc: Cisco is set to invest in CoreWeave, valuing the cloud services provider at $23 billion, with a potential secondary transaction for existing shareholders to sell shares.
• Exxon Mobil Corp: The company indicated a potential $600 million to $1 billion hit to its third-quarter upstream earnings due to a slump in oil prices and weaker refining margins.
• Ford Motor Co: A U.S. safety regulator is investigating over 368,000 Ford Edge SUVs for brake loss issues due to rear brake hose failures.
• Meta Platforms Inc: Europe’s top court ruled that Facebook must limit the use of personal data for targeted advertising, a decision supported by privacy activist Max Schrems.
• Rivian Automotive Inc: Rivian cut its full-year production forecast due to a parts shortage and delivered fewer vehicles than expected in the third quarter.
• Ryanair Holding PLC: Ireland’s Data Protection Commissioner opened a probe into Ryanair’s use of facial recognition technology for identity verification during third-party bookings.
• Shell PLC: Russia’s Prosecutor General has filed a lawsuit against several of Shell’s units, initiated by various Russian governmental bodies.
• Spirit Airlines Inc: The airline is in discussions with bondholders regarding a potential bankruptcy filing following its failed merger with JetBlue Airways.
• Stellantis: CEO Carlos Tavares indicated that potential cuts to dividends and share buybacks next year are possible, dismissing recent U.S. operational issues as a “small error”.
• Thermo Fisher Scientific Inc: A major drug manufacturing plant owned by the company has repeatedly violated contamination rules, raising concerns about its operational culture.
• Thomson Reuters Corp: The company announced it is selling its FindLaw business to Internet Brands, as FindLaw’s growth has lagged compared to other legal business segments.
• UniFirst Corp: Elis SA has made an informal takeover proposal for UniFirst, while ongoing talks between Elis and Vestis are reported.