Global Markets
The trading day saw Wall Street’s stocks experience a downturn as hopes for early interest rate cuts from the Federal Reserve diminished. Investor sentiment was also influenced by the quarterly earnings reports from major U.S. retail players like Walmart. Canada’s main stock index remaining relatively flat as investors adopted a cautious stance ahead of significant domestic inflation data. This caution offset gains observed in the prices of base and precious metals.
In Europe, shares dipped, particularly in the metal and mining sectors, as traders analyzed crucial eurozone wage data. Conversely, China’s stock market witnessed an uptick following the announcement of the country’s substantial reduction in its benchmark mortgage rate, aimed at bolstering the struggling property market and broader economy. However, Japan’s Nikkei struggled to gain traction, closing lower amidst the market’s mixed sentiments.
The U.S. dollar slightly retreated but continued to trade above 150 Japanese yen for the sixth consecutive day. Despite heightened tensions in the Middle East, oil prices experienced a decline but remained close to three-week highs, as concerns over demand persisted.
In European company news:
- Ground staff at German airline Lufthansa announced a strike for Tuesday, adding to the ongoing industrial action within Germany’s transport sector.
- Investment management firm Elliott Advisors is contemplating a new cash bid for British electricals retailer Currys after its initial offer of 700 million pounds was rejected.
- Morrisons, a leading British supermarket group, unveiled plans to match prices with discounters Aldi and Lidl on hundreds of comparable grocery products in an effort to regain lost market share.
Corporate results:
- Allegion Plc surpassed fourth-quarter profit estimates, driven by price hikes and robust demand for its security systems.
- Barclays Plc outlined a three-year plan to revive its share price, including cost reductions and returning capital to shareholders.
- BHP Group Ltd reported first-half underlying profit slightly above analyst expectations, buoyed by strong iron ore prices.
- Fresenius Medical Care AG raised its guidance for 2024 after a fourth-quarter earnings report that exceeded market expectations.
- Home Depot Inc forecasted full-year results below analysts’ estimates, reflecting subdued demand in the home remodeling sector amidst persistent inflation.
- Medtronic Plc beat Wall Street estimates for third-quarter profit, driven by strong demand for its medical devices.
- Walmart Inc forecasted fiscal 2025 sales largely above Wall Street expectations and announced the acquisition of smart-TV maker Vizio for $2.3 billion.
Geopolitical front:
- French Finance Minister Bruno Le Maire revised down France’s forecast for 2024 GDP growth to 1% due to various global conflicts and economic slowdowns.
- Russia declared full control over the Ukrainian town of Avdiivka after Ukrainian troops withdrew, although some remained at a Soviet-era coke plant.
- China’s central bank maintained its key policy rate unchanged amid uncertainties surrounding the Federal Reserve’s monetary policy adjustments.
Top Analyst Ratings
- Agnico Eagle Mines Ltd: Following the company’s better-than-expected fourth-quarter results and improved outlook, the National Bank of Canada has raised its target price for Agnico Eagle Mines Ltd from C$84 to C$85. This adjustment reflects the bank’s confidence in the company’s performance and future prospects.
- MTY Food Group Inc: In response to MTY Food Group Inc’s fourth-quarter earnings miss attributed to softening consumer discretionary spending, CIBC has reduced its target price from C$71 to C$62. This downward revision reflects the bank’s assessment of the company’s current challenges and its impact on future performance.
- CF Industries Holdings Inc: Piper Sandler has lowered its target price for CF Industries Holdings Inc from $90 to $87, citing expectations for the company’s bottom line to remain essentially flat between 2023 and 2025. This adjustment is based on modest pressure on nitrogen prices, according to the brokerage firm’s analysis.
- Merck & Co Inc: Berenberg has increased its target price for Merck & Co Inc from $130 to $140, anticipating above-average sales growth and margin expansion driven by key drugs within the company’s portfolio. This adjustment reflects Berenberg’s positive outlook on Merck’s performance in the coming quarters.
- MVB Financial Corp: JPMorgan has raised its target price for MVB Financial Corp from $28 to $30 following the company’s fourth-quarter earnings report, which exceeded expectations. The earnings beat was attributed to a reserve release and stronger-than-expected growth in fintech fee income. JPMorgan’s adjustment reflects increased confidence in MVB Financial Corp’s future prospects.
- PPG Industries Inc: Berenberg has raised its target price for PPG Industries Inc from $153 to $155, citing the company’s exposure to sectors such as automotive, aerospace, and Mexican decorating through its Comex business. Berenberg believes that this exposure will drive strong earnings growth for PPG Industries Inc in 2024.
- Walt Disney Co: Bernstein has increased its target price for Walt Disney Co from $115 to $120. This adjustment comes as Disney begins cracking down on password sharing for its streaming services, with management indicating that the benefits of this initiative will start to materialize in the latter half of the year. Bernstein’s upward revision reflects optimism regarding Disney’s efforts to enhance its streaming business and drive revenue growth.
