Market Analysis & Corporate Updates: October 23rd, 2024

Global Markets

Canadian Markets

Canada’s TSX Composite Index dropped nearly 1 percent today, primarily driven by falling prices in both the oil and gold markets. The decrease in commodity prices often negatively impacts the Canadian stock market, which is heavily reliant on resource sectors. In a significant monetary policy move, the Bank of Canada cut its key interest rate by 50 basis points, signaling a more accommodative stance aimed at stimulating the economy amidst ongoing concerns over economic growth.

American Markets

U.S. stock indexes also faced downward pressure as the Federal Reserve’s less dovish tone led to a rise in Treasury yields. Investors are closely monitoring upcoming earnings reports, particularly from Tesla, whose results will be released after the market closes today. The anticipation surrounding these earnings is creating a cautious sentiment among traders.

European Markets

European shares edged lower in volatile trading sessions. The mining sector, in particular, struggled, reflecting broader concerns about global demand and economic stability. Heavyweights such as Deutsche Bank and L’Oreal reported weak earnings, which further dampened market sentiment and contributed to the downward trend in European equities. The Euro zone consumer confidence indicator rose to 12.5. UK Markets dropped half a percent as the pound went lower.

Chinese Markets

Chinese stocks saw modest gains, supported by the government’s commitment to providing economic assistance. This promise of support has been well-received by investors, fostering a more optimistic outlook despite ongoing economic challenges.

Japanese Markets

Japan’s Nikkei share average declined for the third consecutive session as the nation approaches its lower house election. Investors appear to be exercising caution, waiting for clarity on the political landscape and its potential impact on economic policy moving forward.

Corporate News

• 3M Co: Target price raised to $100 from $99 due to expectations of improved performance under newly appointed CEO Bill Brown.
• AT&T Inc: Added 403,000 net monthly bill-paying wireless phone subscribers in Q3. Revenue was $30.2 billion (missed estimates of $30.44 billion). Free cash flow was $5.1 billion.
• Baker Hughes Co: Adjusted profit of $0.67 per share in Q3, compared to expectations of $0.61. Total revenue was $6.91 billion (missed estimates of $7.22 billion).
• Boston Scientific Corp: Q3 adjusted earnings of $0.63 per share (estimate was $0.59). Revenue increased 19.4% to $4.21 billion (expectation was $4.04 billion). 2024 adjusted EPS forecast raised to $2.45–$2.47 from $2.38–$2.42.
• CME Group Inc: Q3 net income of $901.3 million or $2.50 per share, up from $740.8 million or $2.06 a year prior.
• Canadian National Railway Co: Target price raised to C$168 from C$167 following solid Q3 earnings.
• Coca-Cola Co: Expects 2024 organic sales growth to be about 10%, up from a prior forecast of 9%–10%.
• CoStar Group Inc: Revised annual revenue forecast to $2.72 billion–$2.73 billion from $2.74 billion–$2.75 billion. Q3 revenue was $693 million (missed estimate of $696.1 million).
• Danaher Corp: Target price cut to $300 from $305 due to anticipated headwinds in China.
• Eli Lilly and Co: UK approved its treatment for early Alzheimer’s disease, following approvals in the U.S. and Japan.
• Enphase Energy Inc: Q4 revenue forecast of $360 million–$400 million (analysts expected $435.8 million). Q3 revenue in Europe fell 15% sequentially.
• Frontier Group Holdings Inc & Spirit Airlines Inc: Frontier Airlines exploring a renewed bid for Spirit Airlines amid discussions about a possible merger.
• General Dynamics Corp: Q3 revenue rose to nearly $11.67 billion, up from $10.57 billion a year ago.
• General Motors Co: Target price raised to $53 from $50 after solid Q3 earnings.
• Hilton Worldwide Holdings Inc: Q3 adjusted profit per share was $1.92 (estimate was $1.85). Total revenue was $2.87 billion (analysts expected $2.9 billion).
• Lockheed Martin Corp: Target price raised to $547 from $512 following impressive Q3 results.
• McDonald’s Corp: Shares fell after an E. coli outbreak linked to its Quarter Pounder resulted in one death and 49 illnesses.
• Meta Platforms Inc: Oversight Board criticized the company for removing a political parody post, later reinstated.
• Nvidia Corp & Taiwan Semiconductor Manufacturing Co Ltd: Nvidia fixed a design flaw with its latest Blackwell AI chips in collaboration with TSMC.
• Pfizer Inc: FDA approved its RSV vaccine for adults aged 18 to 59 at increased risk of RSV disease.
• Philip Morris International Inc: Target price raised to $145 from $125, with expectations for accelerated earnings growth through FY26.
• Packaging Corp of America: Q3 adjusted profit of $2.65 per share (estimate was $2.50). Revenue rose nearly 13% to $2.18 billion (estimates were $2.09 billion).
• Starbucks Corp: Suspended its forecast through the next fiscal year due to declining demand and new strategic changes.
• Texas Instruments Inc: Q3 earnings of $1.47 per share (estimate was $1.37). Revenue dropped 8% to $4.15 billion, with a forecast of $3.70 billion–$4.0 billion for Q4 (below $4.07 billion estimate).
• Thermo Fisher Scientific Inc: Adjusted profit forecast raised to $21.35–$22.07 per share. Q3 revenue was $10.60 billion (missed estimates of $10.64 billion).
• Topaz Energy Corp: Target price raised to C$31 from C$29.50 after acquiring additional assets from Tourmaline Oil Corp.
• Westinghouse Air Brake Technologies Corp: Adjusted profit forecast raised to $7.45–$7.65 per share, reporting Q3 adjusted profit of $2.00 per share (estimate was $1.90). Revenue rose 4.4% to $2.66 billion (missed estimates of $2.69 billion).