Market News & Analysis: November 20th, 2024

Global Markets

Canadian Markets

Canada’s main stock index, the Toronto Stock Exchange (TSX), fell due to declining oil prices, which put downward pressure on energy stocks. The energy sector, which is a significant part of the TSX, was particularly affected as crude oil prices weakened amid global economic uncertainties and ongoing geopolitical tensions.

American Markets

U.S. stock indexes, including the S&P 500, Nasdaq, and Dow Jones, experienced declines as investors chose to stay cautious ahead of Nvidia’s quarterly results, which were anticipated after market close. Nvidia, a leading chipmaker, is seen as a crucial indicator for the tech sector, and its earnings report could either fuel a continuation of the recent bull run or trigger a correction in tech stocks, depending on whether it meets or misses expectations. This uncertainty led investors to avoid making large bets, which contributed to the market’s lackluster performance.

European Markets

European markets dropped, as technology stocks came under pressure as the ECB warned of ‘bubble’ in AI stocks as funds deplete cash buffers. Oil prices also depressed oil stocks in the region, while analysts are concerned that rising electric prices could further add to economic woes in Europe.

Chinese Markets

In China stock markets closed slightly higher, although trading was volatile throughout the session. Mainland Chinese stocks, particularly in the AI sector, were lifted by a renewed focus on the potential of artificial intelligence, as the Chinese government continues to support high-tech industries. However, broader market volatility was driven by concerns over the country’s economic growth, which has shown signs of slowing despite strong government stimulus measures.

Corporate Stock News

• Alibaba Group Ltd: Raised $5 billion through a dual-currency bond offering, including $2.65 billion in U.S. dollar-denominated bonds and 17 billion yuan in offshore yuan-denominated bonds. The proceeds will be used for general corporate purposes, including debt repayment and share repurchases.
• Alphabet Inc: U.S. prosecutors may push forward with proposals to dismantle Google’s search engine monopoly, including ending exclusive agreements with Apple and other companies. Google could be forced to divest parts of its business, such as its Chrome browser.
• Apple Inc: Faces a new U.S. Department of Justice antitrust case regarding its dominance in the smartphone market, alleging that Apple limits competition by restricting interoperability between iPhones and third-party apps. Apple also proposes a $100 million investment to build a manufacturing plant in Indonesia.
• Comcast Corp: Plans to spin off its NBCUniversal cable television networks, including MSNBC and CNBC, into a separate company owned by Comcast’s shareholders. This marks a shift away from cable television amid the rise of streaming video services.
• Delta Air Lines Inc: Projects a mid-single-digit revenue growth in 2025 and expects operating margins in the mid-teens percentage. The company sees affluent customers driving growth, with leisure travel being a top priority for high-income households.
• DT Midstream Inc & ONEOK Inc: Announced a $1.2 billion acquisition of three natural gas transmission pipelines from ONEOK, expanding their footprint in the Midwest U.S. market. The deal will close by early 2025 and will be financed with a mix of debt and equity.
• Exxon Mobil Corp: Signed a non-binding deal with LG Chem to supply lithium from its Arkansas project. The agreement could provide up to 100,000 metric tons of lithium over several years for LG Chem’s Tennessee cathode facility.
• Keysight Technologies Inc: Reported better-than-expected fourth-quarter earnings and revenue, driven by AI investments. It expects strong first-quarter fiscal 2025 results, with adjusted earnings between $1.65 and $1.71 per share, above analysts’ expectations.
• Pfizer Inc: Appointed Chris Boshoff as its new Chief Scientific Officer, responsible for advancing experimental drugs and vaccines in cancer and immune diseases. Separately, a judge rejected Pfizer’s attempt to recoup $75.2 million from an SEC insider trading settlement.
• Qualcomm Inc: Forecasts $22 billion in revenue over the next five years from new products outside of smartphones, such as laptops and cars. The company expressed confidence in its relationship with President-elect Trump’s administration.
• Sage Therapeutics Inc: Halted development of its experimental drug for cognitive impairment in Huntington’s disease after it failed to meet study goals.
• STMicroelectronics NV: Pushed back its long-term revenue and margin targets, citing weaker demand in industrial and automotive chips. The company now expects to reach $20 billion in annual revenue by 2030, rather than 2027.
• Target Corp: Forecasts weaker-than-expected holiday-quarter sales and profit, with a revised per-share earnings outlook of $8.30 to $8.90. The company expects flat comparable sales in Q4.
• Vir Biotechnology Inc: JPMorgan cut its target price to $10 from $13, citing concerns over the potential from its Hepatitis B and D virus trials.
• Walmart Inc: Raised its target price to $100 from $85 after surpassing market expectations in its third-quarter results and raising its full-year sales and profit guidance.
• XP Inc: The Brazilian brokerage posted a 9% rise in net income for Q3, though it slightly missed analyst expectations for profit.
• Zara (Inditex): Increased its use of air freight to speed up shipments from factories in India to Spain to avoid delays in clothing distribution.