Stock Market Update for February 27th, 2024

Stock Market Update for February 27th, 2024

Global Markets

Japanese Markets

In Japan, the Nikkei average concluded the trading session nearly unchanged, indicating minimal movement in overall market sentiment. However, there was notable activity surrounding shares of Advantest, a prominent semiconductor testing equipment manufacturer, which experienced a decline as investors offloaded their holdings.

Chinese Markets

Chinese stocks experienced a robust rally, with the benchmark Shanghai Composite Index rising by 1.29 percent to reach 3,015.48 points. Similarly, the Shenzhen Component Index surged by 2.24 percent, closing at 9,269.57 points. Market activity was notably higher, with the combined turnover of stocks covered by these indices totaling 990 billion yuan, slightly higher than the previous trading day.  The rally was widespread across various sectors, with notable gains seen in areas related to 6G technology and communication equipment.

European Markets

On Tuesday afternoon, European markets experienced a decline, reflecting a broader trend of negative sentiment prevailing across global financial markets.

UK Markets

The UK’s stock market opened higher with and gradually retreated on US market weakness.  The cooling down of UK inflation suggests a moderation in the rate at which consumer prices are increasing, which added support to the market.

Canada’s Market

Canada’s TSX remained relatively stagnant, despite slight increases in metal prices, particularly gold. Investors closely monitored the forthcoming earnings reports from major Canadian banks scheduled for release this week.

US Markets

On Wall Street, trading showed a mixed pattern as investors exercised caution, anticipating key economic indicators, notably the forthcoming inflation report, which would offer insights into the Federal Reserve’s future decisions regarding interest rates.

The U.S. dollar weakened against a basket of currencies, while oil prices declined as market participants assessed developments in the Middle East conflict.

European Stock News

  • Standard Chartered suspended new investments by its clients in China into offshore products via a quota-based channel due to weaknesses in the local market and currency.
  • A consortium led by Czech billionaire Daniel Kretinsky gained approval from the Paris Commerce court to bail out debt-laden French retailer Casino under an accelerated protection procedure.
  • Europe’s automakers accepted the EU’s decision to effectively ban fossil-fuel vehicles by 2035, regardless of the outcome of the upcoming European parliamentary elections.

Corporate News:

  • Bank of Montreal reported a decline in its first-quarter adjusted profit, attributing it to significant reserves set aside against potential credit losses.
  • Despite Ottawa’s increased scrutiny on foreign investment in the critical minerals sector, Chinese investment in Toronto-listed mining companies continued to surge.
  • Canada’s decision to extend the ban on foreign real estate buyers for an additional two years was met with skepticism regarding its effectiveness in addressing the country’s housing shortages.
  • Panama expressed its commitment to defending its interests in a legal dispute with Canadian mining company First Quantum.
  • Macy’s Inc announced store closures amid a sales forecast, revealing plans to shutter 150 stores by 2026 due to weaker-than-expected demand for apparel and shoes.
  • Lowe’s Companies Inc forecasted lower sales amid lingering challenges in the home improvement sector, signaling a longer-than-expected recovery period.
  • Zoom Video Communications Inc reported strong quarterly performance and announced a share buyback initiative, driven by robust demand for its products amidst the adoption of hybrid work models.
  • Amazon secured a legal victory in an Alexa patent trial, with a U.S. appeals court ruling in its favor against smart-kitchen startup Freshub.
  • Bristol Myers Squibb unveiled plans to expand its research and development activities in India, aiming to establish its newly inaugurated Hyderabad facility as its largest unit outside the U.S. by 2025.
  • AES Corp forecasted strong profit for 2024, exceeding market estimates, backed by a robust backlog of renewable projects.
  • American Electric Power Company Inc announced a leadership change amidst an earnings miss for the fourth quarter, with Benjamin Fowke appointed as interim CEO.
  • BRF SA ended a seven-quarter losing streak with a strong quarterly performance, posting a profit in the final quarter of 2023.
  • ONEOK Inc reported a strong fourth-quarter performance amid a positive growth outlook for 2024, driven by higher volumes of natural gas and natural gas liquids.
  • SBA Communications Corp forecasted revenue below estimates for full-year 2024, citing anticipated sluggishness in wireless carrier activity after an initial surge in 5G deployments.
  • Woodside Energy Group Ltd reported a drop in profit due to subdued oil and gas prices but exceeded market forecasts, leveraging its operational resilience.
  • Workday Inc beat fourth-quarter profit estimates and reiterated its revenue forecast for fiscal year 2025, demonstrating confidence in its long-term growth prospects.

Analyst Ratings:

  • Cargojet Inc: Atb Capital Markets raises the target price to C$160 from C$155, reflecting strong fourth-quarter results and a positive growth outlook for 2024.
  • Emera Inc: CIBC cuts the target price to C$53 from C$54 due to weaker-than-expected year-end credit metrics and lack of concrete details on asset sale progress.
  • Enbridge Inc: Jefferies initiates coverage with a buy rating and target price of C$53, citing the company’s expansive and diversified asset base, high-quality cash flow profile, and significant project backlog.
  • Keyera Corp: Jefferies initiates coverage with a buy rating and target price of C$38, highlighting the company’s well-positioned status in 2024 due to its low leverage and solid outlook for fee-based cash flow growth.
  • Nuvista Energy Ltd: Jefferies initiates coverage with a buy rating and target price of C$13, forecasting free cash flow generation and associated return of capital initiatives to recover in 2025 alongside an improvement in the commodity price backdrop.
  • Domino’s Pizza Inc: RBC raises the target price to $525 from $490, citing better-than-anticipated revenue growth, accelerating growth compared to peers, and improving net store growth in 2024.
  • Freshpet Inc: Piper Sandler raises the target price to $130 from $100, reflecting strong margin momentum growth.
  • Genco Shipping & Trading Ltd: Jefferies raises the target price to $26 from $22, citing the company’s strong balance sheet, significant free cash flow, and improving dry bulk charter rates.
  • Microstrategy Inc: Canaccord Genuity raises the target price to $975 from $617, driven by the continued appreciation of bitcoin’s value and some revaluation of the company’s software business.
  • Zoom Video Communications Inc: JPMorgan cuts the target price to $80 from $83, stating that the company’s fourth-quarter results and metrics fail to convey materially improving business dynamics.

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