Global Markets
Canadian Markets
Canada’s TSX declined as investors adopted a more defensive posture amid escalating Middle East tensions, which have driven crude oil prices sharply higher and reignited inflation concerns across global markets. While domestic data showed resilient consumer activity, with retail sales rising 1.1% to $70.7 billion in January, led by a 2% gain in motor vehicle and parts sales and broad strength across most subsectors, this positive momentum was largely overshadowed by macro risks. The surge in oil prices is now feeding directly into inflation expectations, prompting money markets to significantly increase bets on further tightening from the Bank of Canada, including a potential rate hike as early as April and a cumulative 75 basis points of additional tightening priced into 2026 as a whole.
American Markets
U.S. equity markets sold off sharply, with the Dow, S&P 500, and Nasdaq ending the week lower amid concerns that energy-driven inflation could delay or derail expected rate cuts. U.S. Treasury yields rose notably, with the 10-year yield climbing to around 4.38%, reflecting a repricing of inflation risk and higher-for-longer interest rates, while bond markets bore the brunt of the adjustment due to their sensitivity to rate expectations. Commodities painted a mixed picture, with copper declining on growth concerns, while gold saw modest support from safe-haven demand but remained under pressure overall due to a stronger policy stance from the Federal Reserve. Currency markets reflected this uncertainty, with the U.S. dollar firming slightly despite being on track for a weekly decline.
European Markets
European markets also moved lower as the spike in energy prices intensified fears of a renewed inflation wave, complicating central bank policy paths. The European backdrop remains fragile, even as German producer prices declined year-over-year.
UK markets declined as investors increasingly priced in a more hawkish path from the Bank of England, driven by a combination of surging energy costs and deteriorating fiscal dynamics. The sharp rise in oil and gas prices, linked to geopolitical tensions has intensified concerns that headline inflation is reaccelerating, particularly as households face higher utility bills heading into the summer. At the same time, a notable increase in government borrowing has raised questions about fiscal sustainability, potentially putting upward pressure on gilt yields and tightening overall financial conditions.
Overall, the market environment is increasingly characterized by a geopolitical-driven inflation shock, where stronger economic data is being overshadowed by rising input costs, tighter financial conditions, and growing concerns that central banks may need to maintain or even increase policy restrictiveness, reinforcing a volatile and uncertain outlook for global equities.
Corporate Stock News
Air Products and Chemicals Inc. (APD): JPMorgan raised its target to $310 from $280, citing resilient earnings growth, improving helium pricing, and stronger volumes.
Alaska Air Group Inc. (ALK): U.S. regulators are investigating a near-miss incident involving an Alaska Airlines flight and a FedEx aircraft at Newark Airport.
Amazon.com Inc. (AMZN): The company is developing a new AI-integrated smartphone (“Transformer”) as part of its renewed push into hardware and ecosystem expansion.
Apollo Global Management Inc. (APO): The firm is investing $1 billion for a 49% stake in a retail real estate joint venture with Realty Income focused on long-term leased properties.
Conagra Brands Inc. (CAG): JPMorgan cut its target to $17 from $19 due to persistent cost inflation and margin pressure.
FedEx Corporation (FDX): Shares rose after the company raised full-year guidance on strong demand, while JPMorgan also lifted its target to $432 from $424 on improved Express segment performance.
Goldman Sachs Group Inc., Morgan Stanley, Citigroup Inc., JPMorgan Chase & Co.: Proposed regulatory changes could reduce capital requirements, freeing up billions for lending, dividends, and buybacks.
McCormick & Company Inc.: The company is in talks with Unilever PLC regarding a potential deal involving Unilever’s food business.
Mettler-Toledo International Inc. (MTD): Jefferies raised its target to $1,450 from $1,400, citing strong execution and growth potential.
Netflix Inc. (NFLX): The company is expanding into live events, highlighted by a major BTS concert livestream and continued investment in South Korea.
Nexstar Media Group Inc. (NXST) & Tegna Inc. (TGNA): The FCC approved Nexstar’s $3.54 billion acquisition of Tegna, significantly expanding its U.S. market reach.
Nvidia Corporation (NVDA): The company will supply 1 million AI chips to Amazon’s AWS through 2027, supporting large-scale AI infrastructure growth.
Novartis AG (NVS): The company agreed to acquire a breast cancer drug candidate for up to $3 billion, expanding its oncology pipeline.
Super Micro Computer Inc. (SMCI): Individuals linked to the company were charged in a $2.5 billion AI technology smuggling scheme to China, pressuring shares.
Tesla Inc. (TSLA): The company plans to invest $2.9 billion in solar manufacturing equipment to expand U.S. production capacity.
Thyssenkrupp AG (TYEKF): Talks to sell its steel division to India’s Jindal Steel are stalling, with uncertainty around deal progress.
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