Stock Market Update & Analysis: July 31st, 2024

Global Stock Markets

Canada

Canada’s main stock index surged, climbing over 1 percent, driven primarily by a significant rally in the commodities market. Oil prices soared more than 4 percent. Gold prices also advanced, contributing to the overall positive sentiment. Economic data revealed a modest rise of 0.02 percent in Canada’s GDP for May.

United States

In the U.S., the Nasdaq Composite saw a strong performance, bolstered by gains in chip stocks following a bullish forecast from Advanced Micro Devices (AMD). This positive outlook for the semiconductor industry provided a substantial lift to tech shares. However, not all tech giants shared in the gains, as Microsoft shares slipped on a earnings miss.

The Federal Reserve maintained its current policy stance but indicated a possible rate cut in September, a move that could support future economic growth.

Europe

European shares also enjoyed gains, with the market driven by strong performances from specific companies. Dutch chip equipment manufacturer ASML led the charge, supported by positive corporate updates and an optimistic industry outlook. The broader market benefited from a general sense of confidence in the corporate sector’s health and future prospects.

UK

UK markets rose on Tuesday, buoyed by gains in blue-chip stocks, as investors cautiously prepared for the Bank of England’s (BoE) upcoming interest rate decision.

Japan

In Japan, the Nikkei index climbed higher, spurred by the Bank of Japan’s rate hike announcement. Governor Kazuo Ueda’s comments provided further support, as investors interpreted his remarks as a signal of confidence in the Japanese economy. The yen strengthened in response to these developments, reflecting increased investor interest in Japanese assets.

China

China’s stock index jumped over 2 percent on Wednesday, showing resilience despite a third consecutive month of decline in the country’s manufacturing activity. According to an official survey, the manufacturing purchasing managers’ index (PMI) for July came in at 49.4, slightly down from 49.5 in June.

Currency Markets

The U.S. dollar weakened against a basket of major currencies, influenced by the Federal Reserve’s policy stance.  The yen’s strength contrasted with the dollar’s decline, highlighting the varied responses in the global currency markets to central bank actions and economic data.

Top Stock News

Advanced Micro Devices Inc (AMD): AMD raised its 2024 AI chip sales forecast by $500 million, expects tight supplies through 2025, and reported Q2 revenue of $5.8 billion, exceeding expectations.

Arch Capital Group Ltd: Arch Capital reported a 90% increase in Q2 profit, with gross premiums up 11.1% to $5.38 billion and pre-tax net investment income up 50.4%.

Arista Networks Inc: Arista Networks forecast Q3 revenue above estimates, with Q2 revenue rising 16% to $1.69 billion and adjusted earnings at $2.10 per share.

Bunge Global SA: Bunge missed Q2 profit expectations but raised its full-year profit forecast; Q2 adjusted earnings were $1.73 per share.

Caesars Entertainment Inc: Caesars reported a Q2 loss of $122 million due to a $940 million charge related to REIT leases, with overall revenue of $2.83 billion below expectations.

Cenovus Energy Inc: Cenovus Energy shut down a unit at its 183,000-barrel-per-day refinery in Lima, Ohio, with increased flaring expected; no injuries reported.

Dupont De Nemours Inc: DuPont raised its full-year forecasts, expecting 2024 adjusted earnings of $3.70 to $3.80 per share; Q2 adjusted profit was 97 cents per share.

Electronic Arts Inc (EA): EA forecast Q2 bookings above expectations but reported lower-than-expected Q2 bookings and earnings per share at $1.04.

Extra Space Storage Inc: Extra Space Storage beat Q2 funds from operations expectations with $2.06 per share and raised the lower end of its FFO forecast for 2024.

FirstEnergy Corp: FirstEnergy reported a rise in Q2 operating profit due to higher electricity rates and demand, with operating earnings at 56 cents per share.

First Solar Inc: First Solar’s Q2 profit more than doubled due to stable demand, with net sales up 24.6% to $1.01 billion and record Q2 production of 3.7 gigawatts.

Freshworks Inc: Freshworks forecast Q3 revenue above estimates, driven by demand for AI-powered services, and reported Q2 adjusted profit at 8 cents per share.

GE Healthcare Technologies Inc: GE Healthcare cut its annual revenue growth forecast due to a slowdown in China sales but reported Q2 adjusted profit of $1 per share.

Howmet Aerospace Inc: Howmet raised its buyback authorization and quarterly dividend, expecting 2024 revenue between $7.40 billion and $7.48 billion.

Humana Inc: Humana beat Q2 profit estimates due to strong Medicare Advantage business and reported adjusted Q2 profit of $6.96 per share.

KKR & Co Inc: KKR’s Q2 adjusted net income rose 49%, driven by increased fees and annuities business, with adjusted net income at $972 million.

Match Group Inc: Match Group will lay off about 6% of its staff and discontinue live-streaming services, with Q2 revenue growing 4% to $864 million.

Microsoft Corp: Microsoft will increase spending on AI infrastructure despite slower cloud business growth, with Q4 total revenue up 15% to $64.7 billion.

Mondelez International Inc: Mondelez missed Q2 revenue expectations but maintained its annual revenue and profit forecasts, with adjusted profit at 86 cents per share.

Pinterest Inc: Pinterest forecast Q3 revenue below expectations, with Q2 revenue rising 21% to $853.7 million and global monthly active users up 12%.

Public Storage: Public Storage lowered its 2024 FFO forecast due to higher expenses and low occupancy levels, with Q2 revenue at $1.17 billion.

Qorvo Inc: Qorvo beat Q1 revenue expectations but forecast Q2 revenue in line with estimates, with Q1 adjusted earnings at 87 cents per share.

Skyworks Solutions Inc: Skyworks reported a drop in Q3 revenue due to sluggish demand for automotive chips, with Q3 revenue at $905.5 million.

Smurfit Westrock Plc: Smurfit Westrock reported a 51% drop in Q2 profit due to lower consumer spending, with revenue at $2.97 billion.

Starbucks Corp: Starbucks met profit expectations despite declining global sales, with same-store sales down 14% in China.

Stryker Corp: Stryker reported Q2 profit above estimates due to demand for medical devices, raising its annual profit guidance.

T-Mobile US Inc: T-Mobile raised its full-year forecast for phone subscriber additions, with Q2 revenue at $905.5 million.

UDR Inc: UDR raised its annual same-store revenue forecast due to strong demand, with Q2 adjusted FFO at 55 cents per share.