Global Stock Markets:
- Asia: Asian equities slumped, led by Chinese stocks, as data indicated a patchy economic recovery in China. The Chinese blue-chip index closed near five-year lows due to concerns about shaky domestic growth and weak property data.
- Japan: Japan’s Nikkei retreated from previous gains, driven by profit-taking.
- Europe: European equities dropped as remarks from European Central Bank (ECB) officials tempered expectations for interest rate cuts.
- Canada: The Canadian main stock index faced a decline, primarily attributed to slipping gold prices and a more than 1% fall in oil prices. The concerns were driven by China’s economic worries and a strengthening U.S. dollar. Regulatory decisions related to the Trans Mountain Expansion pipeline project also drew criticism from environmental campaigners.
- Wall Street: The U.S. stock market, represented by Wall Street, also declined. Hawkish comments from Federal Reserve officials lowered hopes for a rate cut in March. Attention shifted towards regional U.S. bank earnings and upcoming December retail sales data.
- FTSE: Stocks drop on concerns over higher than expected inflation readings.
Oil and China’s Economic Indicators:
- Oil Prices: Oil prices fell more than 1% due to concerns about economic growth in China, the world’s second-largest crude user. China’s economic growth slightly missed expectations in the fourth quarter, and weak property data deepened concerns.
Federal Reserve and Inflation:
- Federal Reserve: Fed Governor Christopher Waller mentioned that the U.S. is “within striking distance” of the Federal Reserve’s 2% inflation goal. However, he emphasized that the central bank should not rush to cut its benchmark interest rate until there is clear evidence that lower inflation will be sustained.
Global Geopolitical Events:
- Middle East: Israeli tanks reportedly re-entered parts of the northern Gaza Strip, reigniting intense combat.
- Legal Actions: Pesticide manufacturers Syngenta and Corteva are set to face a lawsuit from the U.S. Federal Trade Commission and a bipartisan group of states accusing them of unlawful efforts to curb competition from generic rivals.
Corporate Developments:
- Automotive Cells Co (ACC): ACC partnered with UK startup Circulor to trace the provenance and embedded carbon emissions of raw materials used for electric vehicle (EV) battery cells.
- GSK (GlaxoSmithKline): GSK announced plans to sell a 3.2% stake, or about 300 million shares, in its spun-off consumer healthcare business Haleon.
- Tesla: Tesla reduced Model Y prices in Germany following a similar move in China. The price cuts aim to remain competitive in the electric vehicle market.
- Biden Administration: The Biden administration unveiled draft regulations aimed at curbing overdraft fees, which officials believe could save consumers $3.5 billion annually.
- Albemarle: Albemarle is seeking to sell its stake in Australia’s Liontown Resources after a failed $4.3 billion bid.
- Gildan Activewear: Gildan Activewear accused its former CEO, Glenn Chamandy, of failing to disclose certain fund investments and having an undisclosed relationship with a shareholder.
- US Judge Ruling: A U.S. federal judge blocked JetBlue Airways’ planned $3.8-billion acquisition of ultra-low-cost carrier Spirit Airlines, citing anticompetitive concerns.
- Coinbase and SEC: Coinbase and the SEC are set to face off in federal court over the regulator’s crypto authority. Coinbase argues that the tokens traded on its crypto exchange are not akin to securities.
- BP Plc: BP appointed Murray Auchincloss as permanent CEO four months after the sudden resignation of Bernard Looney. Auchincloss indicated continuity in BP’s strategy focused on reducing carbon emissions and increasing renewable capacity.
Top Analyst Ratings:
Capital Power Corp:
RBC cut the target price from C$45 to C$42.
Reason: Anticipation of delays in Genesee repowering projects.
First Quantum Minerals Ltd:
JPMorgan reduced the target price from C$15 to C$11.
Reason: Expectation of higher capital and operational expenditure.
Gibson Energy Inc:
JPMorgan lowered the target price from C$26 to C$25.
Reason: Upside risks due to delays in the Trans Mountain pipeline.
NFI Group Inc:
National Bank of Canada increased the target price from C$18 to C$19.
Reason: Continued strong demand for buses.
Teck Resources Ltd:
National Bank of Canada decreased the target price from C$68 to C$66.
Reason: Anticipation of lower copper production in 2024.
Burlington Stores Inc:
Piper Sandler upgraded the rating to overweight from neutral.
Reason: Expectation of improved store experience boosting comparative benefits.
Carrols Restaurant Group Inc:
Stephens downgraded the rating to equal-weight from overweight.
Reason: Following Restaurant Brands’ agreement to fully acquire the company.
Mastec Inc:
Baird downgraded the rating to neutral from outperform.
Reason: Citing project risks impacting revenue in 2024.
Morgan Stanley:
KBW downgraded the rating to market perform from outperform.
Reduced the target price from $102 to $91.
Reason: Expectation that the bank’s wealth management unit’s potential growth will take time to reflect.
Parsons Corp:
Baird upgraded the rating to outperform from neutral.
Reason: Expectation of gains from effective acquisition strategy and large scope contracts.
