Stock Market Update for July 3rd, 2024

Global Markets

Canadian Markets

The Canadian stock market was up over one percent, with gains driven by the strength in gold prices and stable oil prices. The housing crisis in Canada is prompting nearly 40% of immigrants to contemplate relocating, and in Vancouver home sales declined by 19% in June amid increasing inventory levels.

American Markets

US stock markets showed a mixed performance during pre-holiday trading.  The job report released on Wednesday indicated weaker labor market conditions, which heightened investor anticipation of upcoming interest rate cuts by the Federal Reserve later this year.

UK Markets

The rebound in UK stocks, was driven by a rally in metal miners,  with the backdrop of heightened anticipation ahead of the UK election, as investors brace for a Labour majority.

European Markets

In Europe, shares rose as investors reacted positively to dovish Federal Reserve remarks. In June, the German service sector experienced a solid increase in business activity, marking a positive conclusion to the second quarter of the year.

Japanese Markets

Japan’s Nikkei share average, saw gains for the fourth consecutive day. This rise was fueled by gains in heavyweight technology stocks. The Japanese yen weakened further, hitting a fresh 38-year low against the U.S. dollar and a record low against the euro. The weakening yen typically supports Japanese exports, which can push markets higher.

Chinese Markets

Chinese markets dropped a half of a percent, as UBS Securities came out with their bullish stance, with a Overweight rating on Chinese stocks. The investment firm’s outlook reflects their position that the Chinese market has an attractive valuation model currently.

Corporate Stock News

• Novo Nordisk and Eli Lilly Pricing Pressure (NVO): U.S. President Joe Biden and Senator Bernie Sanders jointly called on pharmaceutical giants Novo Nordisk and Eli Lilly to lower the prices of their weight-loss and diabetes medications. This move underscores ongoing scrutiny over drug pricing practices in the United States, aiming to make essential medications more affordable for consumers.
• DOF Group Acquires Maersk Supply Service:  Norwegian supply shipping company DOF Group announced its acquisition of Maersk Supply Service (MSS) from Maersk Supply Service Holding (MSSH) in a deal valued at $1.11 billion. This acquisition combines two significant players in the offshore marine service sector, potentially enhancing operational synergies and market presence.
• First Quantum Minerals (FM:CA) and Panama’s Environmental Audit: Shares of First Quantum Minerals rose on the Toronto Stock Exchange after Panama announced plans for an environmental audit of the Cobre Panama mine. This audit will determine the mine’s environmental compliance and safety, crucial for its potential reopening following its closure in December amid environmental concerns and legal challenges.
• Apple’s (AAPL) Role at OpenAI: Apple Inc. secured an observer role on OpenAI’s board as part of a strategic AI agreement. Phil Schiller, Apple’s head of the App Store and former marketing chief, will serve as the observer. This arrangement allows Apple insight into OpenAI’s decision-making processes without voting rights, aiming to bolster collaboration in advancing artificial intelligence technologies.
• Blackstone’s (BX) Sale of Alinamin Pharmaceutical: Blackstone Inc. announced the sale of Japanese drugmaker Alinamin Pharmaceutical to North Asian buyout fund MBK Partners in a transaction reportedly valued at 350 billion yen ($2.17 billion). Blackstone will retain an indirect minority stake in Alinamin post-transaction, underscoring its continued interest in the pharmaceutical sector.
• Constellation Energy (CEG )and Three Mile Island: Constellation Energy is reportedly in discussions with Pennsylvania state officials and lawmakers regarding potential funding to restart part of its Three Mile Island nuclear power facility. This site, infamous for a nuclear meltdown in the 1970s, is being considered for revival, reflecting ongoing efforts to leverage nuclear energy amid broader discussions on sustainable energy sources.
• Chicken Soup for the Soul Entertainment’s Legal Challenges (CSSEP): Former CEO William Rouhana of Chicken Soup for the Soul Entertainment declined to testify regarding allegations of unpaid wages before the company filed for bankruptcy. His legal team cited concerns over potential criminal liability, highlighting ongoing legal complexities surrounding corporate governance and financial obligations.
• CVR Energy’s (CVI) Bid for Citgo Petroleum Shares: CVR Energy Inc., controlled by billionaire investor Carl Icahn, submitted a binding offer in the auction of shares in Citgo Petroleum’s parent company. This auction, overseen by a U.S. court in Delaware, aims to settle creditor claims against Venezuela, with CVR working alongside Wells Fargo to secure financing for its bid.
• Semnur Pharmaceuticals’ Merger with Denali Capital Acquisition Corp: Drug developer Semnur Pharmaceuticals signed a letter of intent to go public through a merger with special purpose acquisition company Denali Capital Acquisition Corp, valued at up to $2 billion. The combined entity plans to operate as Semnur Pharmaceuticals, focusing on advancing its lead drug candidate SP-102 for chronic pain management.
• Exxon Mobil (XOM), Hess Corp (HES), and Chevron’s (CVX) Arbitration Panel: The arbitration panel responsible for resolving Exxon Mobil’s claim against Chevron’s acquisition of Hess Corp has been finalized. This milestone marks progress in settling disputes surrounding Chevron’s $53 billion acquisition, influencing the timeline for the merger’s completion and regulatory approval.
• New York Community Bancorp’s (NYCB)Reverse Stock Split: New York Community Bancorp announced a one-for-three reverse stock split effective after market close on July 11. This financial restructuring follows shareholder approval and aims to stabilize the bank’s market position after financial setbacks earlier in the year.
• Paramount Global’s (PARA) Potential Sale to Skydance Media: Shari Redstone’s National Amusements reached a preliminary agreement to sell its controlling interest in Paramount Global to David Ellison’s Skydance Media for $1.75 billion. The deal includes a 45-day “go-shop” period, inviting other bids, and marks a significant development in the media and entertainment industry.
• Rivian Automotive’s (RIVN) Partnership with Volkswagen (VWAGY): Rivian Automotive clarified that it has no plans to produce vehicles with Volkswagen beyond their current software partnership. Reports suggesting extended collaboration for producing Rivian’s R2 SUVs at VW’s South Carolina plant were dismissed, affirming Rivian’s production plans at its own facilities in Illinois and Georgia.
• Vista Outdoor (VTO) and MNC Capital’s Acquisition: Vista Outdoor confirmed receipt and review of additional information from MNC Capital regarding its acquisition proposal. Vista continues to recommend its shareholders vote in favor of the proposed merger agreement with CSG at the upcoming special meeting, underscoring ongoing corporate governance and shareholder interests.