Stock Market Update & Analysis: July 25th, 2024

Global Markets

Canada

Canada’s TSX experienced a decline as falling oil and metal prices exerted downward pressure on the market. Investors are also closely monitoring the possibility of further rate cuts by the Bank of Canada after the central bank eased its policy for the second time this year on Wednesday.

USA

In the United States, markets were trading softly in the green following a significant downturn in the previous session. The recent drop was led by a sharp fall in mega cap tech stocks.

Despite the previous day’s plunge, American markets showed signs of modest recovery, as the country posted a stronger than expected GDP report. The second quarter GDP growth rate came in at 2.8 percent against the 2 percent forecasted rate. However investors fear that the strong figure could reduce the chances the Federal Reserve will ease their monetary policy stance.

Europe

European shares mirrored the negative sentiment seen in other markets, tumbling due to a series of disappointing corporate earnings. The lackluster financial results from key companies across various sectors added to the bearish outlook for European equities.

Japan

The yen rallied against major currencies as investors flocked to safe-haven assets amidst the global tech stock rout. This flight to safety saw Japan’s Nikkei share average plummet to a three-month low, marking its biggest daily decline in three years.

Corporate Stock News

• American Airlines Group Inc: Cut its annual profit forecast due to uneven demand trends and overcapacity, now expecting adjusted profit between $0.70 and $1.30 per share, down from $2.25 to $3.25 per share.
• Apple Inc: Lost two percentage points in market share in China in Q2 2024, facing increased competition from Huawei, per Canalys data.
• AstraZeneca plc: Raised its full-year sales and profit forecast after Q2 revenue beat expectations due to strong demand for cancer, rare disease, and heart disease medicines.
• Bombardier: Reported a 32% rise in Q2 revenue driven by higher jet deliveries and stronger sales in its services business.
• Boeing Co: Finalized a guilty plea to a criminal fraud conspiracy charge, agreeing to pay at least $243.6 million after breaching a 2021 agreement with the U.S. Justice Department.
• Chipotle Mexican Grill Inc: Surpassed quarterly sales and profit estimates, with comparable sales rising 11.1% in Q2; announced a $400 million stock buyback.
• CrowdStrike Holdings Inc: Likely to face global insured losses ranging from $400 million to $1.5 billion due to a recent massive IT outage, potentially the largest cyber insurance loss ever.
• Delta Air Lines Inc: Experienced a brand image hit due to recent disruptions, likely impacting its operating margin by at least $350 million in Q3 2024.
• Dow Inc: Missed Q2 profit estimates with operating earnings per share of 68 cents and a 4% decline in net sales to $10.92 billion.
• Exxon Mobil Corp: Approved a settlement to hire Chiyoda International Corp as the new lead contractor for its Golden Pass LNG plant, expediting its construction.
• Ford Motor Co: Reported a dip in Q2 adjusted profit, earning 47 cents per share against expectations of 68 cents, while maintaining its annual earnings guidance.
• Hasbro Inc: Posted a smaller-than-expected drop in Q2 sales, with steady digital gaming demand offsetting a slump in core toy sales, beating profit expectations.
• Honda Motor Co: Announced the closure of a factory and halted vehicle production at another plant in China to optimize output amid intense competition from local brands.
• International Business Machines Corp: Beat Q2 revenue estimates and raised its annual growth forecast for its software business, driven by higher AI-linked spending.
• Kering: Reported a larger-than-expected drop in Q2 sales and forecasted a weak second half, citing subdued demand from Chinese shoppers.
• Meta Platforms Inc: The Oversight Board criticized its unclear rules on sexually explicit AI-generated depictions of real people and recommended changes.
• Nasdaq Inc: Beat Q2 profit estimates with a 25% rise in net revenue to $1.16 billion due to strong demand for compliance and financial crime safeguard products.
• Newmont Corp: Exceeded Q2 profit estimates, driven by robust production and higher prices, and announced the sale of an entity linked to the Batu Hijau mine for $153 million.
• Northrop Grumman Corp: Raised its full-year revenue and profit forecast amid increased global defense spending and a strong backlog.
• Raymond James Financial Inc: Reported a 27% rise in Q3 profit, driven by record revenue, client assets, and bank loans.
• Royal Caribbean Cruises Ltd: Raised its annual profit forecast for the third time this year, attributing it to continued demand and higher ticket pricing.
• Sanofi SA: Increased its full-year profit outlook after strong demand for its asthma drug Dupixent and better-than-expected sales of new launches.
• ServiceNow Inc: Raised its full-year subscription revenue forecast and announced the acquisition of Raytion, a search and retrieval platform.
• Southwest Airlines Co: Beat Q2 profit estimates and announced plans to introduce assigned and premium seating, marking a shift in its business model.
• Stellantis NV: Pledged to address problems in North America and other regions after delivering worse-than-expected H1 results, with a 40% drop in adjusted operating income.
• STMicroelectronics NV: Cut its full-year revenue and margins guidance for the second time, citing weak industrial orders and declining automotive demand.
• TotalEnergies SE: Reported a 6% fall in Q2 earnings, worse than expected, due to lower refined product and gas sales and reduced European refining margins.
• Unilever plc: Beat H1 profit expectations despite lower-than-expected sales growth, maintaining its full-year forecast.
• Universal Health Services Inc: Exceeded Q2 profit estimates and raised its annual adjusted profit forecast due to higher patient admissions.
• Valero Energy Corp: Posted lower Q2 profit, impacted by a slump in refining margins and a tepid summer driving season.