Market Analysis: February 18th, 2025

Global Market Update

Canadian Markets

The Toronto Stock Exchange (TSX) moved higher on Tuesday, driven by strength in commodity stocks, as the price of oil and gold rose in intra-day trading.

Canada’s annual inflation rate increased to 1.9% in January, marking a slight uptick. This is still below the Bank of Canada’s target range of 2%, but it is noteworthy, because as inflation increases, the odds of a pause in rate cuts by the BoC rise. This could cause the Bank of Canada to wait and observe economic conditions before making further monetary policy adjustments.

American Markets

U.S. stock markets rose with investors closely watching developments related to the Federal Reserve’s monetary policy factoring in the potential trade tariff impacts that could alter their positioning on their policy direction.

Intel corporation stock surged almost 10 on report of Broadcom, TSMC exploring deals that would split up chipmaker, helping to push chip stocks higher.

European Markets

European stocks moved higher on Tuesday, as defense based stocks pushed the markets to its all time high. Markets did face some weakness in the IT sector, and concerns over rising bond yields persisted to weigh on sentiment.

UK Stocks were essentially flat, as UK wage growth jumped in the last three months of 2024, forcing the Bank of England to adopt a balanced approach towards rate cuts despite a weak overall economy.

Air Canada: CIBC lowered the target price from C$28 to C$24 due to macroeconomic challenges like fuel price volatility and concerns about the Canadian economy.
Airbus: The company delayed the arrival of a freighter version of its A350 jet by up to a year and faces challenges in increasing output for its A350 aircraft family due to supply chain issues.
Algonquin Power & Utilities Corp: Appointed insider Brian Chin as interim CFO as part of a leadership overhaul after pressure from activist investor Starboard Value. The company is also under pressure to cut debt and shed renewable assets.
Allegion plc: Reported fourth-quarter revenue and profit above estimates, benefiting from strong demand for locks, keys, and electronic security systems. The company’s adjusted profit per share for Q4 was $1.86, exceeding analysts’ expectations.
Amazon.com Inc: A North Carolina union accused the company of interfering with vote counting at a warehouse, alleging violations of labor law, which Amazon denied.
Baidu Inc: Shares plunged after the absence of Baidu’s founder at a key meeting with President Xi Jinping sparked concerns over the company’s standing.
Bank of Montreal: CIBC raised its target price to C$154 from C$150, citing improved credit losses, stronger U.S. banking and capital market performance, and share buybacks.
Bath & Body Works Inc: JPMorgan raised the target price to $47 from $41, factoring in expected revenue growth and margin expansion.
Berkshire Hathaway Inc: Disclosed a new investment in Constellation Brands and reduced holdings in four banks, including Citigroup and Bank of America. It also stopped selling shares of Apple, which remains its largest investment.
Boeing Co: The Air Force One program may face delays until 2029 due to supply chain issues and changing requirements, with Boeing facing challenges getting components from manufacturers that went out of business.
Bombardier Inc: A Delta Air Lines regional jet made by Bombardier flipped upon landing at Toronto Pearson Airport, injuring 18 people. The cause of the crash is under investigation.
Chipotle Mexican Grill Inc & Nike Inc: Investor William Ackman increased his stake in Nike by 15% and reduced his investment in Chipotle by 14% in Q4 2024.
Conagra Brands Inc: Reduced its annual profit and operating margin forecasts due to supply constraints and foreign exchange rates. The company now expects an adjusted profit of $2.35 per share, down from earlier guidance.
Diamondback Energy Inc: Announced a $4.08 billion acquisition of units from Double Eagle, with plans to reduce debt by selling non-core assets.
Delta Air Lines Inc: A regional jet flipped over during landing at Toronto Pearson Airport, injuring 18 people, including three with critical injuries.
DoorDash Inc & Uber Technologies Inc: Uber filed a lawsuit against DoorDash, accusing the delivery firm of anticompetitive practices, alleging that DoorDash coerced restaurants into exclusive delivery deals.
Eni SpA & KKR & Co Inc: KKR bought an additional 5% stake in Eni’s biofuel business, bringing its total stake to 30%, as part of Eni’s strategy to raise funds for decarbonization.
Exxon Mobil Corp: XOM announced plans to produce 180,000 barrels per day of oil and 95 million cubic feet per day of gas at its new Hammerhead project in Guyana, increasing its gas supply to the country.
General Motors Co: GM is closing a plant in Shenyang, China, as part of restructuring its business in the region, where local manufacturers have overtaken the market.
HSBC Holdings Plc: Investors supported the bank’s move to close parts of its investment bank and focus on its core businesses in Asia, despite hopes for a capital markets boom in the U.S.
InterContinental Hotels Group PLC: Announced a $1.1 billion shareholder return and the acquisition of European hotel brand Ruby for $116 million, boosted by strong demand in the U.S. despite weakness in China.
Johnson & Johnson: The company is facing a legal battle over a $10 billion proposal to resolve lawsuits regarding its baby powder. It also resumed the limited release of its Varipulse heart device after an investigation.
KKR & Co. Inc: KKR’s bid to acquire Assura for $2 billion was rejected. The company also made a revised $1.4 billion buyout offer for Australia’s Perpetual’s wealth management and corporate trust businesses.
Microsoft Corp: Microsoft plans a $700 million investment to improve Polish cybersecurity in collaboration with the country’s armed forces.
Peloton Interactive Inc: The company won a dismissal of a shareholder class action lawsuit concerning a recall of defective bikes in 2023.
Petroleo Brasileiro SA Petrobras: Petrobras is working on a veterinary center in the Amazon to meet environmental agency demands before it can potentially receive approval to drill in an offshore area.
Restaurant Brands International Inc: Acquired nearly full ownership of Burger King China for $158 million, as part of its strategy to address soft demand in the Chinese market.
Southwest Airlines Co: Southwest announced it would cut 15% of corporate jobs (about 1,750 roles) as part of a cost-reduction plan, saving an estimated $210 million in 2025.
Spotify Technology SA: Spotify is considering a new subscription service, “Music Pro,” with higher-quality audio and additional features, potentially costing up to $5.99 more per month.
Stellantis NV: Stellantis will produce dual-clutch transmissions for hybrid vehicles at its Termoli plant in Italy as part of expanding its hybrid car offerings.
Tesla Inc: Tesla is hiring senior staff in India, signaling progress toward entering the country’s growing electric vehicle market.
UniCredit: The bank warned that it could withdraw its buyout offer for Banco BPM if BPM shareholders back a competing bid for Anima Holding.
Venture Global Inc: Venture Global will begin commercial operations at its Calcasieu Pass LNG plant in Louisiana on April 15, after overcoming several challenges.
Woodside Energy Group Ltd: Woodside is in talks to sell stakes in its Louisiana LNG plant, with buyers such as Tokyo Gas, JERA, and MidOcean Energy showing interest.
Zoetis Inc: The U.S. Department of Agriculture granted Zoetis conditional approval to use its bird flu vaccine in poultry to address the recent outbreak in the U.S.
Starboard Value: Continued exerting pressure on Algonquin Power & Utilities Corp to restructure and improve financial performance.