Market News & Analysis: November 13th, 2024

Global Stock Markets

Canadian Markets

Canada’s main stock index, the S&P/TSX Composite, saw a slight gain during Wednesday’s trading session, though overall sentiment was cautious. Investors are navigating mixed economic signals, with concerns about global growth tempered by expectations of ongoing strength in some domestic industries.

American Markets

In the U.S., stocks moved higher following the release of October’s Consumer Price Index (CPI) data, which showed a 2.6% year-over-year increase, slightly higher than expected. This was interpreted by markets as a sign that inflationary pressures remain manageable, allowing for continued optimism about the U.S. economy. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all posted gains, with investor sentiment buoyed by the data.

European Markets

European stocks were more volatile, swinging between gains and losses as investors reacted to mixed earnings reports and sector performance. Energy stocks rose on the back of higher oil prices, while technology stocks were weighed down by weaker-than-expected results from major tech firms, while UK markets managed to achieve a slight gain,

Japanese Markets

In Japan, the Nikkei 225 ended lower, despite earlier gains, as investors took profits. The decline reflected caution amid concerns about potential economic slowdowns in key regions. However, Seven & I Holdings surged, fueled by speculation about a potential management buyout, helping to offset broader losses in the index.

Chinese Markets

Chinese stocks rebounded towards the end of the session, finishing higher. While the broader market had been under pressure earlier, gains in telecom stocks, particularly those linked to China Mobile and China Telecom, helped lift the market. The rebound followed a series of disappointing economic reports but was seen as a reflection of resilient investor interest in China’s long-term growth prospects.

Currency Markets

• U.S. Dollar: The U.S. dollar strengthened across the board, rising to a fresh 6-1/2-month high against a basket of major currencies. This move was largely attributed to the continuation of what are being dubbed “Trump trades” — a term used to describe market reactions to expectations of economic policy continuity under former President Donald Trump, as well as rising yields on U.S. Treasury bonds. The dollar’s strength was notable against other major currencies, including the euro, pound, and Japanese yen.
• Japanese Yen: The yen weakened sharply, falling to its lowest level since July against the U.S. dollar. This was partly due to the ongoing interest rate differentials between the U.S. and Japan, with the U.S. Federal Reserve maintaining higher interest rates compared to Japan’s ultra-loose monetary policy. The weakness in the yen was also linked to broader global economic uncertainties, prompting capital outflows from Japan.

Commodity Markets:

• Oil: Oil prices remained under pressure, hovering near their lowest levels in two weeks. The downward pressure came from two key factors: OPEC’s revised forecast for global oil demand growth, which was downgraded for both 2024 and 2025, signaling concerns about slower-than-expected consumption in major markets. Additionally, there were growing worries over China’s demand, as its economy continues to struggle with slower growth and potential supply chain disruptions.
• Gold: Gold prices managed a modest recovery, edging higher following a drop to their lowest level in nearly two months in the previous session. The price rebound was largely driven by some bargain hunting by investors who saw the dip as a buying opportunity. Despite the uptick, gold prices are still struggling to maintain upward momentum, weighed down by a stronger dollar and investor appetite for riskier assets, like stocks.

Corporate Stock News

Albemarle Corp: Berenberg raises target price to C$102 from C$81 following the company’s move to sell the mineral spodumene directly into the market.

Alimentation Couche-Tard Inc: Japan’s Seven & i Holdings is reviewing a non-binding buyout offer from a member of its founding family, while also considering a rival offer from Couche-Tard. Talks are ongoing, with Couche-Tard’s offer raised to $47 billion.

Amazon.com Inc: Amazon and IKEA, along with other companies, will invite bids in January for ocean freight contracts using near-zero emissions e-fuels as part of a new Zero Emissions Maritime Buyers Alliance.

Amgen Inc: Amgen’s stock slumped after early-stage data on its experimental weight-loss drug raised concerns about a potential link to bone mineral density loss, although the company denied the connection.

Apple Inc: Apple plans to launch a new wall-mounted display with AI capabilities, set for release by March. It could be priced at up to $1,000 depending on the model and features.

Archer-Daniels-Midland Co: ADM sought an extension to file its Q3 report due to errors identified in intersegment sales and accounting irregularities, leading to a downgrade in its 2024 profit outlook.

Banco Bilbao Vizcaya Argentaria SA (BBVA): BBVA is committed to securing approval for its takeover of Sabadell, despite the competition authority’s decision to extend the review process into 2025.

Blackstone Inc: Blackstone is investing $300 million in Brigade Capital to help build its private credit strategy, including collateralized loan obligations (CLO).

Boeing Co & Spirit AeroSystems Holdings Inc: Spirit AeroSystems will receive $350 million in advance payments from Boeing to stabilize production, while its deal with Airbus includes $107 million in advances.

Computer Modelling Group Ltd: CIBC lowers the target price to C$14.5 from C$15 after weaker-than-expected Q2 results.

EchoStar Corp: DirecTV plans to abandon its acquisition of EchoStar’s satellite TV business if bondholders do not agree to a debt exchange by Nov. 22.

Embraer SA: Embraer is focusing on strengthening its supply chain in China and exploring partnerships to compete with Airbus and Boeing.

General Motors Co & Tesla Inc: GM recalls 461,839 vehicles for transmission issues, while Tesla recalls 2,431 Cybertruck pickups due to potential drive power loss.

Imperial Oil Ltd: JPMorgan raises the target price to C$100 from C$97 following the company’s strong Q3 results.

Instacart: Instacart forecasts weaker-than-expected Q4 gross transaction value (GTV) and core profit, citing potential slowdown in online grocery demand during the holiday season.

Johnson & Johnson: J&J sues the U.S. Health and Human Services Department over blocking its plan to sell certain drugs at full price before applying rebates under the 340B drug-discount program.

Klarna Bank AB: Klarna has confidentially filed for a U.S. IPO, though the number of shares and price range are yet to be determined. The company reported strong revenue growth in the U.S.

Loblaw Companies Ltd: Loblaw missed Q3 revenue estimates due to weak demand for non-essential goods, but saw growth in food retail. Adjusted earnings per share beat expectations.

Linamar Corp: CIBC lowers the target price to C$84 from C$85 based on a challenging outlook for the company.

Maplebear Inc (Instacart): Instacart sees weaker-than-expected fourth-quarter forecasts amid slowing growth in online grocery and food deliveries.

Nvidia Corp: The U.S. Supreme Court is set to hear arguments in Nvidia’s bid to dismiss a securities fraud lawsuit related to crypto sales. Separately, SoftBank’s telecom unit will receive the latest Nvidia chips.

Occidental Petroleum Corp: Occidental beats Q3 profit estimates but posts a 14% decline in earnings due to asset sales and weaker chemical results. Its oil production rose 15.7% due to the CrownRock purchase.

Sienna Senior Living Inc: CIBC raises target price to C$19 from C$17, citing the company’s operational strength and effective cost management.

Shell Plc: Glencore and Chandra Asri are moving forward with the purchase of Shell’s Singapore refinery, establishing a new operating company for fuel sales and crude oil purchases.

Skyworks Solutions Inc: Skyworks projects weaker-than-expected Q1 revenue and profit due to declining demand from automotive and industrial clients.

Spotify Technology SA: Spotify forecasts strong Q4 profit and subscriber growth, despite Q3 revenue falling short due to a weak digital ad market.

Spirit Airlines Inc: Spirit Airlines is in ongoing talks with creditors to improve liquidity and is exploring strategic alternatives. Q3 adjusted operating margin is expected to drop 12%.

Suncor Energy Inc: Suncor raised its quarterly dividend by 5% after beating Q3 profit estimates, benefiting from higher oil production and refined product demand.

UBS Group AG: The U.S. is investigating UBS over its acquisition of Credit Suisse, focusing on Russian clients and possible violations of sanctions enforcement.

Volkswagen Group & Rivian Automotive LLC: Volkswagen raised its investment in Rivian by 16%, to $5.8 billion, to develop joint electric vehicle architecture and software.

Zynga Inc: Zynga, a subsidiary of Take-Two Interactive, announced a partnership to bring its popular mobile game franchises to new gaming platforms.