Global Market Update
Canadian Markets
Canada’s TSX rose as the Bank of Canada lowered its benchmark interest rate to 2.75%, marking a quarter-point reduction. The decision comes in response to concerns about the ongoing trade tensions, particularly the impact of U.S. tariffs on Canadian exports. Analysts believe this move is necessary to mitigate the potential adverse effects of these tariffs, especially on industries like manufacturing and agriculture. Market traders are also anticipating at least two more rate cuts by the end of 2025 to support the Canadian economy in the face of slower global growth and trade uncertainties.
American Markets
In the U.S., stocks finished mostly positive, although there was some weakness in the Dow Jones Industrial Average (DJIA), reflecting investor caution amid concerns over President Donald Trump’s protectionist policies, especially the tariffs on metals. The market’s mood was further influenced by the latest inflation figures, which showed the Consumer Price Index (CPI) coming in lower than expected. This development raised hopes that inflation might be easing, reducing the likelihood of further aggressive rate hikes by the Federal Reserve. Lower inflation could also signal that the economy is cooling, which, while beneficial for inflation control, might lead to concerns about the pace of overall economic growth.
European Markets
European shares experienced a significant rally following four consecutive sessions of declines, as investor sentiment improved. The surge came after Ukraine accepted a U.S. proposal for a 30-day ceasefire agreement with Russia, offering a potential avenue for de-escalation in the ongoing conflict. This positive development helped calm markets and sparked optimism that a resolution to the geopolitical tensions might be within reach, although concerns about the longer-term impact of the conflict remain.
In the UK, stocks rose, particularly in the mining sector, which benefitted from the global surge in commodity prices. However, despite this sector-specific boost, broader sentiment was more cautious. Many companies in the UK revised their outlooks downwards, citing the ongoing challenges posed by global uncertainties, inflationary pressures, and slower economic growth. In addition to this, the British pound weakened again as concerns about the UK’s economic outlook lingered.
Corporate Stock News
Avolta: Swiss duty-free retailer Avolta reported slightly better-than-expected annual turnover, driven by growth across all regions, especially in leisure demand.
Bayer: Germany’s financial markets regulator has initiated a probe into whether Bayer properly disclosed plans to seek shareholder approval for a potential capital increase.
Ecarx Holdings Inc: Volkswagen is in talks with Ecarx, a Chinese digital cockpit system developer, to use its technologies in cars sold in developed markets like Europe and the U.S. This deal highlights the growing efforts by Western automakers to integrate Chinese technologies into their vehicles.
Kraft Heinz Co and PepsiCo Inc: U.S. Health Secretary Robert F. Kennedy Jr. has urged food companies, including PepsiCo and Kraft Heinz, to remove artificial dyes from their products. This initiative is part of a broader plan to create a federal framework on food dyes to avoid inconsistent state laws and to “get the worst ingredients out” of food.
Match Group Inc: Apple has successfully blocked Match Group from accessing commercially sensitive information related to an antitrust investigation in India. The CCI had found that Apple used its dominant position in the app store market unfairly, though Apple denies any wrongdoing.
Merck & Co Inc: A U.S. District Judge ruled in favor of Merck in a lawsuit over Gardasil, its HPV vaccine. The judge determined that Merck did not have sufficient evidence to warrant additional warnings about potential risks of the vaccine, clearing the company of liability in over 200 lawsuits.
Puma: Puma has lowered its forecast for quarterly currency-adjusted sales growth due to weak performances in the U.S. and China
Spotify Technology SA: Spotify paid $10 billion in royalties in 2024, marking its largest payout to the music industry in a single year. Over 1,500 artists earned over $1 million in royalties. The company faced a lawsuit over alleged underpayment of royalties, but a federal judge dismissed the case.
Tesla Inc: Elon Musk is appealing a decision to rescind his $56 billion compensation package from Tesla. Musk claims the judge made legal errors, including applying the wrong legal standard and erroneously concluding that he had undue influence over the pay negotiations.
TotalEnergies SE: RWE, Germany’s top utility, has signed a deal to supply TotalEnergies with green hydrogen starting in 2030. The contract, one of the biggest in the sector, will deliver up to 30,000 tonnes of hydrogen annually from RWE’s electrolysis plant in Lingen, Germany.
Toyota Motor Corp: Toyota will launch nine fully-electric models in Europe by 2026 under its Toyota and Lexus brands. This includes new versions of its electric SUVs, with a broader strategy aimed at increasing the availability of electric vehicles in regions like Europe.
Verizon Communications Inc: U.S. Transportation Secretary Sean Duffy criticized Verizon for not moving quickly enough on its $2.4 billion telecom contract with the FAA. Verizon is working with the FAA to address concerns regarding aging air traffic control systems, with potential support from SpaceX’s Starlink technology..
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