Stock Market Update & Analysis for July 8th, 2024

Global Markets

Canada

• TSX (Toronto Stock Exchange): The TSX was largely unchanged as the day saw mixed influences. A decline in oil and gold prices exerted downward pressure on the index.
• However, this was counterbalanced by optimism regarding potential interest rate cuts by the Federal Reserve. Investors speculated that the Fed might lower rates as soon as September, which buoyed market sentiment and helped stabilize the index.

United States

• U.S. Stock Indexes: The major U.S. stock indexes experienced moderate gains.
• Investors were gearing up for a busy week with several significant events on the horizon:
  • The release of a key inflation report, which would provide insights into the current economic conditions and potential future actions by the Fed.
  • Testimony by Fed Chair Jerome Powell, which is always closely watched for hints about the central bank’s policy direction.
  • The start of the earnings season, where companies report their quarterly earnings, providing a clearer picture of corporate health and profitability.

Europe

• European Shares: Initially, European stocks faced losses, likely due to the shock from the French election results. However, as the day progressed, investors appeared to digest and move past the election outcomes.
• By the end of the trading session, European shares had rebounded and posted gains, suggesting a recovery in investor confidence.

Japan

• Japan’s Nikkei: The Nikkei index closed lower.
• This decline was attributed to profit-taking by investors following a multi-day rally. After a series of gains, it is common for investors to sell off some of their holdings to lock in profits, leading to a temporary dip in the index.

Currency Market

• U.S. Dollar: The dollar maintained a steady position against its major peers.
• This stability reflects a balanced outlook from investors, who are likely weighing various factors such as interest rate expectations, economic data, and geopolitical developments.

Corporate Stock News

Revolut

• CEO Cash Out: CEO Nikolay Storonsky plans to sell part of his stake, worth $500 million.

ASML

• New CEO’s Challenge: CEO Christophe Fouquet must navigate the U.S./China “chip war” while maintaining the company’s lead and managing the AI boom.

China-EU Trade Tensions

• Anti-Dumping Probe: China’s investigation into Europe’s cognac industry is a retaliation for EU tariffs on Chinese electric vehicles, per LVMH’s finance chief.

Toronto-Dominion Bank

• Compliance Officer Departure: Chief Compliance Officer Monica Kowal has left amid a U.S. probe into the bank’s anti-money laundering program. Erin Morrow will replace her.

Eli Lilly & Morphic Holding

• Acquisition: Eli Lilly will acquire Morphic Holding for $3.2 billion, gaining an experimental drug for inflammatory bowel disease.

Paramount Global & Skydance Media

• Merger: Skydance Media and Paramount Global will merge. Skydance will acquire National Amusements for $2.4 billion and merge with Paramount, offering $4.5 billion in cash or stock.

Abbott Laboratories

• Legal Battle: Abbott faces a trial over claims that its Similac formula causes a deadly bowel disease in preterm infants, the second of hundreds of similar lawsuits.

Talen Energy & Amazon

• Regulatory Dispute: Talen Energy asked U.S. regulators to reject a challenge to its Amazon data center deal, opposed by electric utilities over potential power cost increases.

Boeing

• Legal Settlement: Boeing will plead guilty to a fraud conspiracy charge related to two 737 MAX crashes and pay a $243.6 million fine, plus $455 million over three years on safety and compliance programs.

Grifols

• Takeover Bid: The Grifols family and Brookfield will launch a joint takeover bid to delist Spanish drugmaker Grifols.

HSBC Holdings

• Fine and Disqualification: HSBC fined $3.07 million for using unregistered intermediaries for its MPF scheme. Former pensions head Yip Sze Ki is disqualified from senior roles for 18 months.

Koss Corp

• Stock Surge: Shares soared due to social media speculation involving meme stock influencer Keith Gill.

Airlines and Hurricane Beryl

• Flight Cancellations: Over 1,300 flights canceled due to Hurricane Beryl, with United and Southwest most affected.

Tesla

• Legal Fee Dispute: Tesla shareholders contest a $7 billion attorneys’ fee request related to a legal battle over Elon Musk’s $56 billion pay package.

Vista Outdoor

• Rejected Offer: Vista Outdoor rejected MNC Capital’s revised acquisition offer and accepted an increased bid for its ammunitions unit from Czechoslovak Group.

Stock Ratings

• Bumble: Downgraded by Wells Fargo to “Equal Weight” with a price target lowered from $15 to $10.
• Canadian Pacific Railway: Rated “Hold” by Stephens with a price target of CAD 85.
• First Quantum Minerals: Rated “Buy” by Jefferies with a price target of CAD 23.
• Gilead Sciences: Upgraded by Raymond James to “Outperform” with a price target of USD 93.