Market Analysis for Friday February 28th, 2025

STA Research
February 28th, 2025
https://www.stocktargetadvisor.com/stock/USA/NYE/STLA
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Global Markets

Canadian Markets

Canada’s TSX index was flat on Friday with some weakness as broader market concerns weighed on investor sentiment. However, Canada’s economic outlook appeared more optimistic with a stronger-than-expected GDP growth of 2.6% in the latest report, far surpassing the anticipated 1% growth. This indicates that the Canadian economy is performing better than initially predicted, potentially alleviating concerns of a slowdown, however the tariffs will likely offset any future growth which tapered investor sentiment.

American Markets

In the US, stocks rebounded from the previous day’s steep sell-off, with investors focusing on the Personal Consumption Expenditures (PCE) inflation figures. The data revealed a moderation in inflation, which is important for the Federal Reserve’s monetary policy decisions. A softening of inflation may ease pressure on the Federal Reserve. This gave investors a slight bout of cautious optimism, as a less aggressive stance from the Fed could help sustain economic growth.

European Markets

In Europe, stock markets showed a mixed performance. Investors were cautious, particularly as they braced for potential new tariffs, a concern that has lingered amid trade tensions. Germany saw an increase in unemployment, though the rise was less than anticipated, offering a small degree of relief. A positive note came from Sweden, where the country’s GDP growth for the fourth quarter surpassed expectations, providing a bright spot in the EU.

France also offered some encouraging news, with inflation dropping below 1% for the first time in four years, signaling that price pressures in the eurozone might be easing. This could be seen as a positive development for European consumers and businesses, suggesting that the region might be on a path toward economic stabilization.

In the UK, stocks experienced gains, fueled by a recovery in blue-chip companies. This was further supported by a modest rise in the value of the British pound. On the political front, there appeared to be increasing optimism surrounding a potential trade deal between the US and the UK, spurring hopes of improved economic relations despite the ongoing concerns about tariffs.

Corporate Stock News

  • AES Corp: Forecasted annual adjusted profit above Wall Street expectations, driven by contributions from new renewable projects and utility segment growth. Adjusted profit for the quarter ended December 31 was 54 cents per share, above the expected 34 cents.

  • Apple Inc: Apple plans to introduce a way for parents to share their children’s age with app developers without revealing sensitive data, as lawmakers consider age-verification laws for social media and apps.

  • Autodesk Inc: Forecasted revenue and profit above estimates, driven by strong demand for design software. The company will also reduce its workforce by 9% (1,350 employees) and invest more in cloud and AI technologies.

  • Citigroup Inc: Erroneously credited $81 trillion to a customer’s account instead of $280, highlighting operational issues despite efforts to improve. The error was reversed after hours.

  • Dell Technologies Inc: Forecasted a decline in adjusted gross margin due to higher AI server costs. It also forecasted $15 billion in AI server revenue and a $10 billion share buyback plan.

  • Duolingo Inc: Forecasted annual revenue above expectations, with stronger adoption of AI-powered subscription services. Expected adjusted core profit was lower than estimates due to AI video call feature costs.

  • Edison International: Missed fourth-quarter adjusted profit estimates due to higher costs and interest rates, with operating expenses rising by 7% and interest expenses increasing by 16%.

  • EOG Resources Inc: Beat fourth-quarter profit estimates, though net income halved due to lower oil prices. Quarterly revenue fell 12%, but production volumes increased by 6.7%.

  • Goldman Sachs Group Inc: Appointed Elizabeth Overbay as CFO of its asset and wealth management division, strengthening its focus on that area after the consumer banking push failed.

  • HP Inc: Beat first-quarter revenue estimates, driven by its personal systems segment and growing demand for AI-capable systems. Announced additional layoffs of 1,000-2,000 employees for restructuring.

  • International Paper Co: Appointed Lance Loeffler as CFO, replacing Tim Nicholls, who will head the newly acquired DS Smith.

  • Meta Platforms Inc: Plans to test a paid subscription service for its AI chatbot Meta AI and a standalone Meta AI app, aiming to compete with OpenAI and Google in the AI space.

  • Mosaic Co: Missed fourth-quarter profit expectations due to lower potash prices and sales. Potash segment sales and adjusted core profit fell sharply.

  • Moderna Inc: Received approval from the UK’s health regulator for its RSV vaccine for adults aged 60 and older, targeting respiratory infections that can lead to pneumonia in older individuals.

  • Monster Beverage Corp: Beat fourth-quarter sales estimates, helped by strong demand for energy drinks. Adjusted gross profit increased to 55.5% from 54.5% a year ago.

  • NetApp Inc: Lowered its fiscal year 2025 revenue and profit forecast due to weak demand for data storage services. Reported third-quarter revenue below analyst estimates.

  • Polestar Automotive Holding UK Plc: Secured a $450 million loan facility but delayed its fourth-quarter and annual fiscal 2024 results due to weaker demand for electric vehicles.

  • Stellantis NV: STLA CEO Carlos Tavares’ pay fell 37% to 23 million euros before his resignation in December. He will receive a severance package and bonus pay for meeting company milestones.

  • X (Twitter): Canada’s privacy watchdog opened an investigation into the use of Canadians’ personal data by X for AI model training, questioning whether privacy rules were violated.

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