Global Markets
Canadian Markets
Canada’s main stock index moved higher on Friday, defying downward pressure from falling gold and oil prices. Investor sentiment was mixed as attention turned to the looming August 1st deadline for a potential trade agreement with the United States. Despite ongoing discussions, expectations for a deal remain low, which has injected uncertainty into Canadian markets.
Adding to the economic unease, Canada’s federal budget deficit surged to $6.5 billion for the first two months of the 2025/26 fiscal year, up sharply from a $2.6 billion deficit in the same period a year earlier. The widening shortfall reflects increased government spending and weaker tax revenue growth, reigniting concerns about fiscal sustainability at a time when interest rates remain elevated.
American Markets
Wall Street extended its rally, buoyed by optimism over negotiations between the U.S. and major trading partners, as well as record-high closes for the S&P 500 and Nasdaq in the previous session. However, tech investor enthusiasm was tempered by Intel’s disappointing second-quarter results.
The semiconductor giant posted a surprise adjusted loss of $0.10 per share, despite beating low revenue expectations with $12.86 billion in sales. Analysts had forecast earnings of $0.01 per share on $11.97 billion in revenue. While revenue rose marginally from last year’s $12.83 billion, the bottom-line miss raised fresh concerns about Intel’s turnaround plan—particularly its struggling foundry business, which has yet to gain the traction needed to compete with global chipmakers like TSMC and Samsung.
Intel is reportedly planning to lay off up to 15% of its global workforce by year-end as part of its cost-cutting strategy under new CEO Lip-Bu Tan. Investors are also grappling with the company’s forecast of a wider-than-expected loss in Q3, further dimming the near-term outlook for the chipmaker.
European Markets
In Europe, major indexes moved lower as Eurozone companies signaled slowing economic activity, with the European Central Bank acknowledging that inflation is cooling but expected to hover around the 2% target over the long term. Business confidence has started to weaken across core economies such as Germany and France, amplifying fears of a broader slowdown in the region.
The UK market also dropped, driven by rising short-term inflation expectations and a drop in the British pound, which fell to a four-month low against the euro. Investors are growing concerned that inflationary pressures could force the Bank of England to delay rate cuts. At the same time, the IMF warned that the UK risks veering off course in its efforts to stabilize public finances, citing weaker-than-expected growth and higher debt-servicing costs.
Corporate News
Apple Inc: Dutch antitrust regulator ACM has delayed its ruling on Apple’s App Store fees for dating app providers as discussions continue with the European Commission. Apple recently adjusted these fees and has committed to more changes later this year. The case centers around the regulator’s previous ruling that Apple imposed unfair conditions using its dominant market position.
AstraZeneca PLC: A European regulatory panel recommended approval of an eco-friendly version of AstraZeneca’s inhaler for chronic lung conditions. The inhaler, Trixeo Aerosphere, utilizes a new type of pressurized gas and has already been approved in the UK. It is under review in several other countries, including China.
Carrefour: Europe’s largest food retailer has agreed to sell its struggling Italian business to NewPrinces Group. This sale is part of a strategic overhaul the company began earlier this year.
Centene Corp: The health insurer reported a surprise second-quarter loss, citing higher-than-expected medical costs. It posted an adjusted loss of $0.16 per share versus analysts’ forecasts of an $0.86 profit. Its medical cost ratio hit 93%, well above the estimated 89.34%, sending shares lower.
Deckers Outdoor Corp: The maker of Hoka and UGG shoes beat Q1 earnings estimates, driven by strong international demand. It now anticipates a $185 million increase in cost of goods sold for fiscal 2026, mainly due to 20% tariffs on Vietnamese imports. International sales surged nearly 50%, offsetting weak domestic performance.
Digital Realty Trust Inc: The data center REIT raised its full-year revenue and core FFO guidance on expectations of continued growth in digital transformation. Q2 revenue hit $1.49 billion, exceeding analysts’ forecasts, with updated full-year FFO guidance raised to a range of $7.15–$7.25 per share.
Edwards Lifesciences Corp: Boosted by strong sales of artificial heart valves, Edwards raised its full-year guidance and beat Q2 estimates. TAVR device sales rose 8.9% to $1.13 billion. Adjusted EPS came in at $0.67, beating the $0.62 forecast.
Eni SpA: The Italian energy giant reported a 25% year-over-year drop in Q2 profits, mainly due to lower oil prices and a weak U.S. dollar. However, it still beat analysts’ expectations and cut its leverage ratio to 19%, or 10% on a pro forma basis, including recent asset sales.
Gilead Sciences Inc: The EU’s drug regulator endorsed Gilead’s lenacapavir (Yeztugo), a twice-yearly HIV prevention injection. This follows its recent U.S. approval and WHO recommendation earlier this month.
Intel Corp: Intel announced significant restructuring, with its workforce expected to shrink over 20% by year-end. Despite flat Q2 sales of $12.9 billion, it beat revenue estimates. The chipmaker forecasts a wider-than-expected Q3 loss of $0.24 per share and plans a disciplined cost structure under new CEO Lip Bu Tan.
LVMH: CEO Bernard Arnault announced plans to open a second factory in Texas amid optimism over progress in U.S.-Europe trade negotiations. The move reflects the luxury group’s continued global expansion strategy.
Mohawk Industries Inc: The flooring manufacturer exceeded Q2 expectations, posting EPS of $2.77 versus $2.60 estimated. The company announced $500 million in share buybacks and expects $100 million in restructuring benefits by 2025.
NatWest Group PLC: The British bank reported an 18% rise in H1 pretax profit to £3.6 billion, slightly above expectations. NatWest upgraded its 2024 return-on-tangible-equity forecast to 16.5% and announced a £750 million share buyback.
Newmont Corporation: The gold miner beat Q2 earnings forecasts thanks to a nearly 40% YoY surge in bullion prices. Gold production fell 8% to 1.48 million ounces, but a realized price of $3,320/oz helped offset this. EPS was $1.43, ahead of the $1.18 estimate, despite higher all-in-sustaining costs of $1,593/oz.
Paramount Global: The U.S. FCC approved Paramount’s $8.4 billion merger with Skydance Media in a 2–1 partisan vote. The deal consolidates CBS, Nickelodeon, and Paramount Pictures under David Ellison’s control. The merger has sparked debate about media independence and ownership in the Trump era.
Pinnacle Financial Partners Inc & Synovus Financial Corp: The two regional U.S. banks agreed to merge in an $8.6 billion all-stock deal, creating a banking giant with $115 billion in assets. Synovus shareholders will receive a 10% premium. The merged entity will be led by Synovus CEO Kevin Blair.
Puma SE: The German sportswear maker cut its full-year outlook and now expects a loss due to weak global demand and anticipated profit-margin pressure from U.S. tariffs. The downgrade reflects broader struggles in the apparel industry.
Rogers Communications Inc: JPMorgan raised Rogers’ target price to C$59 from C$55 following strong quarterly results and solid wireless/internet subscriber growth. The bank sees further upside tied to Rogers’ sports-related media assets.
Teck Resources Ltd: JPMorgan downgraded Teck to Neutral from Overweight, lowering the price target to C$56 from C$63. The downgrade stems from copper market uncertainty and operational difficulties at its QB2 project.
VeriSign Inc: The domain registrar beat EPS estimates in Q2 with profit of $2.21 per share (vs. $2.20 expected), though revenue came in slightly below forecasts at $410 million. Domain name registrations fell marginally YoY to 170.5 million.
Weyerhaeuser Co: The timber REIT saw Q2 profits fall 50% YoY due to weak wood product pricing and tepid demand. However, it posted slightly better-than-expected revenue at $1.88 billion and guided for lower earnings in Q3, expecting a $60 million sequential drop.
STA Research (StockTargetAdvisor.com) is a independent Investment Research company that specializes in stock forecasting and analysis with integrated AI, based on our platform stocktargetadvisor.com, EST 2007.
The growing budget deficit in Canada is definitely concerning, especially with interest rates still elevated. It’ll be interesting to see whether this puts additional pressure on the Bank of Canada to adjust its policy stance later this year.