Stock Market Update for March 7th, 2024

Stock Market Update for March 7th, 2024

Global Markets

Global Stock Market Performance Today: Key Highlights

Today, the global stock market witnessed a mixed performance across different regions, influenced by various economic indicators, central bank decisions, and geopolitical factors. Let’s delve into the key highlights from different regions:

Canada:

Canada’s primary stock index saw a modest uptick, largely mirroring the positive movement in gold prices. The rise in gold prices typically boosts the performance of Canadian stocks, given the significant presence of mining companies in the country’s stock market.

United States:

Wall Street experienced a notable surge as investors reacted positively to several developments. Firstly, upbeat sentiment followed the release of favorable U.S. trade balance data, which indicated a narrowing trade deficit. Additionally, optimism was fueled by encouraging weekly jobless claims figures, suggesting a robust labor market. Furthermore, investors closely monitored the second day of Jerome Powell’s congressional testimony. Powell’s reaffirmation of the Federal Reserve’s stance on potential rate cuts this year provided additional support to the market sentiment.

Europe:

European stocks traded higher, buoyed by anticipation surrounding the European Central Bank’s upcoming interest rate decision. Investors awaited clues on the central bank’s monetary policy stance and potential measures to support economic recovery in the region. The positive momentum in European markets reflected cautious optimism amidst ongoing economic challenges.

Japan:

In contrast to other regions, Japan’s Nikkei index concluded the trading session with a sharp decline. This downturn was attributed to a sell-off in chip-related stocks, prompted by concerns over the yen’s appreciation against the U.S. dollar. Growing expectations of the Bank of Japan’s policy adjustments further contributed to the sell-off, as investors speculated on potential changes in the central bank’s approach to support the economy.

European Stock News:

  • Stellantis Joint Venture Approval: A proposed joint venture allowing Stellantis, the world’s fourth-largest automaker, to manufacture and market Leapmotor’s electric vehicles outside China has been approved by a Chinese regulator. This move signifies Stellantis’ commitment to expanding its presence in the electric vehicle market and signals potential growth opportunities in the international market for electric vehicles.
  • Marks & Spencer Leadership Change: British retailer Marks & Spencer’s co-CEO Katie Bickerstaffe is stepping down from her position, leaving sole leadership in the hands of Stuart Machin, according to reports from Sky News. This leadership change reflects ongoing strategic shifts within the company as it navigates challenges and seeks to capitalize on emerging opportunities in the retail sector.
  • Telecom Italia (TIM) Growth Expectations: Telecom Italia (TIM) anticipates a compound annual growth rate of 8% in core earnings over the next three years, following a planned sale of its domestic fixed-line network. This projection underscores the company’s confidence in its ability to achieve sustained growth and profitability through strategic restructuring and optimization of its business operations.

North American Stock News

  • First Quantum Minerals Ltd: The closure of a copper mine in Panama operated by Canadian miner First Quantum Minerals Ltd is estimated to cost around $800 million, according to Trade and Industry Minister Jorge Rivera. An inter-ministry coalition is developing the mine’s closure plan and exploring alternative measures to cover the expenses. The Panamanian government suggested that First Quantum’s unit in the country provide financial guarantees to cover the closure costs. Creating a closure plan could take between six to eight months, with the responsibility likely falling to the next president following the upcoming elections in May.
  • TC Energy Corp: Canadian oil and gas pipeline firm TC Energy Corp announced layoffs as part of its plan to integrate its natural gas pipeline units. The reductions will mainly affect employees in Calgary and Houston. The company did not disclose the exact number of job cuts, but its principal operating unit, TCPL, had approximately 2,635 employees in Calgary and 837 in Houston as of December 31. TC Energy is undergoing restructuring and previously announced its intention to spin off its liquids business to focus on natural gas transportation.
  • Rivian: Electric vehicle startup Rivian is at a crucial juncture with the launch of its new line of lower-priced models, particularly the R2. This unveiling marks a significant moment for Rivian’s future trajectory as it aims to expand its market reach.
  • Intrepid Potash Inc: The fertilizer producer reported a fourth-quarter loss due to impairment charges and declining product prices. Intrepid Potash incurred a $42.8 million impairment charge primarily related to its East and West mines in New Mexico. The company reported a net loss of $37.3 million for the quarter, compared to a profit of $4 million a year earlier. It anticipates capital expenditure for 2024 to be between $40 million and $50 million, down from $65.1 million in 2023.
  • Alphabet Inc, Amazon.com Inc, Apple Inc, Meta Platforms Inc & Microsoft Corp: Major tech companies, including Google, Apple, Amazon, Microsoft, Meta, and TikTok owner ByteDance, have scrambled to comply with the EU’s Digital Markets Act (DMA), which came into force on Thursday. The DMA aims to regulate “Big Tech” and reshape the global technology industry. Failure to comply by the Thursday deadline could result in fines of up to 10% of global turnover.
  • Alphabet Inc: Google has established a cybersecurity base in Tokyo, its first in the Asia-Pacific region, to study cyber countermeasures. Additionally, a former Google software engineer has been indicted for allegedly stealing trade secrets related to artificial intelligence to benefit Chinese companies.
  • Anika Therapeutics Inc: Activist investor Caligan Partners disclosed a 9.7% stake in the company and nominated two director candidates to Anika’s board. Caligan cited Anika’s undervaluation and urged strategic alternatives, including a full sale.
  • Apple Inc: The EU requested explanations from Apple regarding its prevention of Fortnite maker Epic Games from launching its own online marketplace on iPhones and iPads in Europe, questioning its compliance with EU technology rules.
  • Chemours Co: An internal review revealed that senior executives manipulated vendor payments and collections of receivables in the fourth quarter of 2023 to meet free cash flow targets. The company expects no impact on preliminary results but anticipates lower net sales and a net loss for the year.
  • General Electric Co: GE’s aerospace business reaffirmed its outlook for the current year and forecasted $10 billion in operating profit by 2028. The aerospace business, set to become a standalone company, plans to return 70-75% cash to shareholders.
  • Goldman Sachs Group Inc: The Wall Street brokerage raised its share buyback forecast for S&P 500 companies by 13% to $925 billion in 2024, driven by stronger-than-expected tech earnings growth.
  • GSK Plc: A study showed GSK’s drug Blenrep extended survival in patients with a type of blood cancer without worsening symptoms, marking a potential comeback for the drug.
  • JPMorgan Chase & Co: Global banking regulators proposed measures to prevent banks from gaming rules to avoid heavier capital requirements, particularly targeting globally systemic banks like JPMorgan.
  • Microsoft Corp: LinkedIn experienced a brief outage affecting thousands of users but has since resumed service.
  • New York Community Bancorp Inc: The bank received a $1 billion infusion from investors led by former U.S. Treasury Secretary Steve Mnuchin’s firm and named ex-financial regulator Joseph Otting as CEO to address stock declines.
  • Novo Nordisk A/S: Early trial data for its obesity drug amycretin showed higher weight loss compared to its popular drug Wegovy, with shares reaching record highs.
  • Pfizer Inc: A U.S. appeals court upheld the dismissal of a lawsuit challenging Pfizer’s fellowship program aimed at boosting diversity in leadership positions.
  • Rio Tinto PLC: An incident at its Queensland gas pipeline led to disruptions, impacting supplies for its alumina and aluminum operations.
  • Spotify Technology SA: The streaming service announced price increases in France due to a new tax, criticizing it as misguided and unlikely to aid music creation.
  • Tesla Inc: Tesla quit Australia’s major auto lobby and resigned from its board, accusing the group of misleading consumers regarding government proposed fuel efficiency standards.
  • Warner Music Group Corp: Warner plans to bid at least 17 euros per share for French digital music company Believe, valuing it at 1.65 billion euros.
  • Yandex NV: Shareholders are set to approve deals transferring ownership of Yandex and major mining assets to Russian investors, totaling around $9 billion.

 

Top Analyst Ratings

  • Abercrombie & Fitch Co (ANF): Jefferies raised the target price for ANF to $155 from $149 following strong fourth-quarter results, with revenue and profit surpassing expectations across all banners.
  • Autodesk Inc (ADSK): Berenberg increased the target price for ADSK to $295 from $290, reflecting the company’s upgraded full-year 2024 guidance.
  • Brown-Forman Corp (BF.B): RBC lowered the target price for BF.B to $56 from $60 after the company reported soft third-quarter revenue performance and reduced its full-year 2024 guidance due to near-term pressures in the spirits category.
  • Foot Locker Inc (FL): Barclays decreased the target price for FL to $22 from $26, citing lower-than-expected current quarter and full-year guidance due to increased investments and ongoing sales and margin pressures.
  • Victoria’s Secret & Co: JPMorgan downgraded the rating for Victoria’s Secret & Co to underweight from neutral, citing weak 2024 guidance and decreased demand in the fourth quarter, driven by consumer challenges and competition from e-commerce players and sportswear competitors.
  • Aecon Group Inc (ARE.TO): CIBC raised the target price for ARE.TO to C$21 from C$18, highlighting solid fourth-quarter results and improved performance in core construction business.
  • AG Growth International Inc (AFN.TO): CIBC increased the target price for AFN.TO to C$82 from C$78, expecting stabilization of profit margins and a pivot to revenue growth following a year-on-year order book increase.
  • Bird Construction Inc (BDT.TO): Atb Capital Markets raised the target price for BDT.TO to C$23 from C$16.5, based on strong fourth-quarter results with better-than-expected revenue growth and gross margin expansion.
  • Constellation Software Inc (CSU.TO): CIBC raised the target price for CSU.TO to C$4100 from C$3800, citing solid fourth-quarter results with revenue and EBITDA surpassing estimates.
  • Paramount Resources Ltd (POU.TO): Jefferies reduced the target price for POU.TO to C$31 from C$33 due to lowered production guidance for 2024 resulting from operational challenges and a volatile macroeconomic backdrop.

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