Market News & Analysis: November 19th

Global Markets

Canada’s Main Stock Index Drops Amid Rising Inflation

Canada’s main stock index fell as inflation data for October showed a slight uptick to 2% year-over-year, compared to 1.6% in September. This rise in inflation may signal that price pressures are still somewhat persistent, potentially affecting consumer spending and business costs. The data may also complicate the Bank of Canada’s policy outlook as they have been trying to manage inflation with higher interest rates over the past year. While inflation is still below the Bank of Canada’s target range of 1%–3%, the increase suggests that further tightening of monetary policy could be considered, which may weigh on investor sentiment.

U.S. Stocks Recover After Falling Amid Russian Tensions

U.S. stocks saw a rebound after earlier losses attributed to concerns over rising geopolitical tensions, particularly involving Russia. Investors initially sought the safety of assets like gold and the U.S. dollar, which are typically viewed as safer investments during periods of geopolitical uncertainty. However, as tensions between Russia and Ukraine remain high, markets fluctuated, with concerns about energy disruptions, sanctions, and the broader impact of the war on global economic growth.

Despite this, U.S. stocks bounced back as investors refocused on corporate earnings and economic data, especially in light of signs that U.S. inflation may be stabilizing. The S&P 500 and Nasdaq Composite regained some ground, driven by strong earnings in certain sectors, such as technology and healthcare.

Europe’s Main Stock Index Hits Three-Month Low

In Europe, stocks dropped, with the Euro Stoxx 50 index falling to its lowest point in three months. European markets are grappling with multiple challenges, including sluggish economic growth, rising energy costs, and the ongoing fallout from the Russia-Ukraine war. European governments are still dealing with the economic ramifications of the war, including inflationary pressures, energy shortages, and supply chain disruptions. This has resulted in investor caution, with many turning to bonds and other safer assets.

Japan’s Nikkei Index Gains on Chip Stock Rally

Meanwhile, in Asia, Japan’s Nikkei closed higher, buoyed by strong performance in chip-related stocks. Semiconductor stocks have been a driving force in global markets due to their critical role in various industries, from consumer electronics to automotive and data centers. The rise in chip stocks in Japan followed similar gains in the Nasdaq, driven by solid earnings from major technology companies and a global recovery in demand for semiconductors. The Nikkei 225 index benefitted from this positive momentum, showing that despite broader economic uncertainties, the tech sector remains a key growth area.

Oil Prices Dip as Norway Resumes Oil Production

In the commodities market, oil prices dipped as investors reacted to the restart of production at Norway’s Johan Sverdrup oilfield, one of the largest offshore oilfields in the North Sea. The field’s resumption of output added to global supply concerns, and traders are carefully watching any signs of excess supply that could drive prices lower. The dip in oil prices comes at a time when global energy markets have been dealing with volatility driven by the war in Ukraine, OPEC production cuts, and rising energy demands. Oil prices had been relatively stable in recent weeks, but the renewed supply from Norway caused some downward pressure on prices. Despite this, oil remains a key geopolitical and economic factor, and fluctuations in prices can have wide-reaching implications for global markets.

Corporate Stock News

Aclaris Therapeutics Inc.

Piper Sandler raised its rating to Overweight from Neutral after Aclaris signed a deal with Biosion for the global rights to two experimental antibody drugs, boosting its immunology pipeline.

Air Products and Chemicals Inc.

Mantle Ridge, an activist investor, nominated nine directors to replace the board and urged the company to appoint a new CEO, revise its capital allocation, and abandon riskier projects.

Amazon Inc.

A panel of U.S. judges questioned whether Amazon and SpaceX acted too quickly in challenging National Labor Relations Board (NLRB) cases related to labor practices, suggesting improper timing of their appeals.

Amcor Plc & Berry Global Group Inc.

Amcor agreed to buy Berry Global in an $8.43 billion all-stock deal. The acquisition creates a stronger presence in the consumer and healthcare packaging markets, with combined revenues of $24 billion and adjusted earnings of $4.3 billion.

Alphabet Inc.

The U.S. Department of Justice plans to ask a judge to force Alphabet’s Google to sell off its Chrome browser, citing illegal monopolization of the search market and AI-related concerns.

Archer-Daniels-Midland Co.

ADM reported lower third-quarter profits due to weakness in its grain business, with net earnings falling 97.8%. It affirmed its full-year guidance range of $4.50 to $5.00 in earnings per share.

Bakkt Holdings & Trump Media and Technology Group Corp.

Trump Media and Technology Group is in advanced talks to acquire Bakkt, the crypto trading firm, in an all-stock deal, consolidating Trump’s involvement in the crypto industry.

Blackstone Inc.

Blackstone is nearing a deal to acquire Jersey Mike’s Subs for about $8 billion, expanding its portfolio of franchise investments.

Healthpeak Properties Inc.

The healthcare-centric REIT raised its 2024 adjusted funds from operations (FFO) forecast to $1.80–$1.82 per share, up from $1.79–$1.81 per share, driven by strong demand for its medical office properties.

Henry Schein Inc.

Activist investor Ananym Capital urged Henry Schein to refresh its board, cut costs, tackle succession planning, and consider selling its medical distribution business to drive share price growth.

Johnson & Johnson

J&J‘s oral drug for moderate-to-severe plaque psoriasis met its trial goals, with positive results for skin condition treatment. The company is set to begin a trial in psoriatic arthritis in 2025.

Kering

Kering appointed Cedric Charbit as the CEO of Saint Laurent, its second-largest fashion label.

Kraft Heinz Co.

Piper Sandler cut its target price for Kraft Heinz to $35 from $40, citing pressures on U.S. retail sales and volume growth.

Lowe’s Companies Inc.

Lowe’s forecasted a smaller-than-expected drop in comparable sales for the year, aided by hurricane-related demand and favorable weather. It expects a 3%–3.5% decline in same-store sales in 2024.

Merck & Co Inc.

Merck’s injectable version of cancer drug Keytruda showed positive trial results, potentially making it more accessible and offering protection against future competition.

Meta Platforms Inc.

Meta disagreed with an order from India’s competition watchdog that placed restrictions on data-sharing between WhatsApp and other Meta apps, and intends to legally challenge it.

Morgan Stanley

Morgan Stanley is seeking to add employees of startups as wealth management clients, especially as the IPO market is expected to pick up. It partnered with Carta to offer financial advice to startup employees.

Nvidia Corp.

Options traders are expecting a nearly $300 billion swing in Nvidia‘s market value following its upcoming earnings report, with a potential 8.5% price move.

Okta Inc.

Barclays initiated coverage of Okta with an Equal-Weight rating and a target price of $81, citing the company’s strong position in the Identity and Access Management market.

Piedmont Lithium Inc.

Sayona Mining will acquire Piedmont Lithium in an all-stock deal, consolidating its Canadian operations and expanding its exposure to the North American electric vehicle sector.

Super Micro Computer Inc.

Super Micro appointed BDO USA as its new auditor and submitted a compliance plan to the Nasdaq, hoping for an extension to regain listing compliance.

Sony Group Corp.

Sony is in talks to acquire Kadokawa, the Japanese media powerhouse behind Elden Ring, to further expand its entertainment portfolio.

Suncor Energy Inc.

UBS raised Suncor’s target price to C$65 from C$61, citing the company’s strong refining performance and higher shareholder returns.

Tesla Inc.

Tesla’s expansion plans for its Grueneheide plant near Berlin faced protests, but a police operation cleared the site after violations of assembly regulations by the protesters.

Trafigura

Swiss trading house Trafigura is investigating a $500 million fraud scheme in Mongolia related to its fuel supply business, following a year-long probe.

Walmart Inc.

Walmart raised its full-year sales and profit forecasts for the third consecutive time, with strong growth in U.S. e-commerce and grocery sales.

XPeng Inc.

XPeng forecasted fourth-quarter revenue above Wall Street estimates, driven by demand for its MONA M03 sedan and a refreshed product lineup.