Global Markets
Canadian Markets
In Canada, the TSX advanced as oil prices climbed, helping lift energy shares. Investors also looked ahead to potential trade updates and digested a wave of corporate news that added to the day’s cautious optimism.
Oxford Economics projects that Canada’s increased defense spending will slightly boost economic growth by 0.1 percentage points in 2025 and 2026, raising annual growth to 0.9% this year and 0.4% next year. However, the firm warns this modest lift won’t be enough to prevent the ongoing economic downturn, which began last quarter and is expected to continue through the end of 2025. The downturn, driven by a trade war and escalating U.S. tariffs, could result in the loss of up to 140,000 jobs, as the negative effects spread beyond the initially impacted industries.
American Markets
U.S. stocks rallied, supported by robust earnings from Taiwan Semiconductor Manufacturing Company (TSMC), which boosted sentiment in the broader chipmaking sector. Investors were also reassured by signs that the U.S. economy remains resilient despite ongoing tariff tensions, as retail sales rebounded sharply in June, rising 0.6%, well above the 0.1% forecast and a strong recovery from May’s 0.9% decline.
Adding to the upbeat tone, the U.S. Department of Labor reported that initial jobless claims fell to 221,000 for the week ending July 12—the fifth consecutive weekly decline—and the lowest reading in three months. This points to a strengthening labor market, further supporting expectations of a soft landing for the economy.
European Markets
In Europe, stocks snapped a four-session losing streak, led higher by strong earnings from Swiss engineering giant ABB and renewed optimism about a potential U.S. trade deal. However, concerns remain, as a top German central banker warned that extended U.S. tariffs could erase all economic growth for Germany through the rest of 2025 and into 2026.
Meanwhile, UK stocks also rose despite a batch of weaker labor data. Annual wage growth (excluding bonuses) slowed to 5%—its lowest since Q2 2022—while payroll employment dropped by 41,000 in June, following a 25,000 decline in May. Although concerning, the softer employment and wage data helped offset a strong inflation reading from the day prior, reigniting hopes that the Bank of England may still move forward with an interest rate cut at its upcoming meeting. UK unemployment has now reached a four-year high, adding to pressure on policymakers to support the economy.
Corporate News
Alphabet Inc: OpenAI added Google Cloud to its list of infrastructure providers to meet soaring AI compute needs, signaling growing competition in the AI space and a strategic diversification away from Microsoft.
Alimentation Couche-Tard Inc: The company withdrew its $46 billion bid to acquire Japan’s Seven & i Holdings, citing a lack of sincere or constructive engagement and accusing the Japanese retailer of deliberate delays.
Amazon.com Inc: A federal judge dismissed a class-action lawsuit against Amazon’s decision to introduce ads on Prime Video unless users pay a $2.99 opt-out fee, ruling the company did not breach its subscriber agreement.
Bank of America Corp: Piper Sandler raised its price target on Bank of America to $49 from $46, citing strong Q2 earnings and revised guidance.
Coca-Cola Co: Donald Trump announced that Coca-Cola has agreed to use cane sugar in its U.S. beverages, replacing high-fructose corn syrup, following his talks with the company.
Dollar General Corp: CFO Kelly Dilts will step down effective August 28 after just over two years in the role. The company has begun searching for her successor.
Elevance Health Inc: The health insurer lowered its annual profit forecast to about $30 per share from a prior range of $34.15 to $34.85, as high medical costs in government plans persist. Quarterly medical loss ratio rose to 88.9%, missing estimates slightly.
Goldman Sachs Group Inc: Jefferies increased its price target to $815 from $801, pointing to steady revenue performance, capital markets strength, and growth in asset and wealth management.
Kinder Morgan Inc: Q2 profit jumped 24% on higher natural gas volumes and increased demand for its pipeline infrastructure. Daily gas transport hit 44,585 BBtu, up from 43,123 BBtu a year earlier.
Meta Platforms Inc: Marc Andreessen will testify in court to defend his role during a $5 billion privacy settlement in 2019. The non-jury trial is ongoing in Delaware’s Court of Chancery.
Microsoft Corp: TD Cowen raised its price target to $580 from $540, citing strong revenue potential from Azure and sustained momentum in the public cloud sector.
MP Materials Corp: The rare earth miner plans to sell $500 million in stock after signing a supply deal with Apple. Proceeds will fund growth and general corporate purposes.
Novartis AG: Raised its full-year earnings guidance, citing strong Q2 sales, which rose 12% to $14 billion, and a 20% increase in adjusted operating income. The company also announced a $10 billion share buyback.
PepsiCo Inc: Raised its outlook for annual core profit decline, helped by improved demand in energy drinks and healthier sodas. Q2 revenue rose 1% to $22.73 billion, beating expectations.
Sarepta Therapeutics Inc: Will cut 500 jobs and add a safety warning to its gene therapy Elevidys after two patient deaths from liver failure, causing physician hesitation and regulatory scrutiny.
Starwood Property Trust Inc: Announced a $2.2 billion acquisition of Fundamental Income Properties, which includes 467 properties across 44 states, funded through a mix of cash, debt, and equity.
Taiwan Semiconductor Manufacturing Co Ltd (TSMC): Reported record net profit of T$398.3 billion (up 60.7% YoY) and lifted revenue guidance to 30% annual growth in USD terms, but warned of potential impacts from future U.S. tariffs.
United Airlines Holdings Inc: Boosted its full-year profit outlook to $9–$11 per share, up from prior estimates, citing increased travel and business bookings amid declining global uncertainty.
Walmart Inc: Announced a restructuring of store-support and training roles, including eliminating the market coordinator position, to streamline operations and focus on higher-volume locations.
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.
I appreciate how this analysis contrasts the short-term market optimism with the deeper economic concerns, particularly in Canada. It makes you wonder if markets are pricing in too much good news given the broader risks.