Global Market Overview:
Asian Markets: Japan’s Nikkei: Recorded its best January in 26 years after overcoming early chip-led declines.
Chinese and Hong Kong Stocks: Extended losses, reflecting challenges in the Chinese economy.
European Stocks: Registered losses in the wake of broader market trends and uncertainties.
Canada’s Main Stock Index: Traded lower in anticipation of key domestic economic data and the Federal Reserve’s decision on interest rates in the United States.
US Stocks: Nasdaq: Experienced a decline of over 1% due to rising AI cost projections from tech giants Alphabet and Microsoft, leading to disappointment among investors and a subsequent slide in megacap and chip stocks.
Currency and Commodities:
- U.S. Dollar: Strengthened as traders awaited a U.S. rates decision to conclude January.
- Oil Prices: Fell due to lackluster economic activity in China, the world’s largest crude importer.
- Gold Prices: Edged higher amidst market uncertainties.
Federal Reserve and Global Economic Signals:
- Federal Reserve Decision: The Fed concluded a two-day policy meeting, assessing evidence of slowing inflation, strong labor market conditions, and a surge in consumer confidence to determine adjustments to its monetary policy stance.
- China’s Manufacturing Activity: Contracted for the fourth consecutive month, indicating challenges in both the manufacturing sector and the broader economy at the beginning of 2024.
Corporate Earnings and News:
- Elon Musk’s Tesla Pay Package: A Delaware judge voided Musk’s record-breaking $56 billion pay package, deeming it an “unfathomable sum” unfair to shareholders.
- Universal Music Group: Ceased licensing its content to TikTok and TikTok Music services, citing a non-renewal of the agreement with the social media platform.
- Vivendi: Announced plans to split into four entities to enhance growth and development.
- Pirelli, Continental, Michelin, Nokian Tyres: Raided by EU antitrust regulators as part of an investigation into a possible cartel, leading to declines in their shares.
- Microsoft: Beat market estimates for quarterly profit and revenue, driven by new AI features attracting customers to its Azure cloud service. However, rising AI development costs disappointed investors.
- Advanced Micro Devices (AMD): Boosted its 2024 forecast for AI processors by $1.5 billion, falling short of Wall Street’s expectations. Forecasted first-quarter revenue below estimates, contributing to a decline in semiconductor stocks.
- Alphabet Inc: Disappointed Wall Street with below-expectation holiday-season advertising sales and increased spending on AI-related infrastructure.
- Banco Santander SA: Reported record fourth-quarter net earnings, exceeding forecasts, with a focus on higher profitability for the upcoming year.
- Boston Properties Inc: Beat estimates for funds from operations (FFO) in the fourth quarter, benefiting from healthy demand for office spaces as more companies encouraged employees to return to workplaces.
- Boston Scientific Corp: Forecasted a full-year profit ahead of estimates, relying on resilient demand for its heart devices.
- Chubb Ltd: Reported a surge in fourth-quarter adjusted profit, driven by stronger underwriting and investment incomes.
- Electronic Arts Inc: Missed estimates for quarterly bookings, citing lower spending and stiff competition in the video game industry.
- Equity Residential: Forecasted full-year FFO below estimates, indicating potential pricing pressures in its West Coast market.
- GSK Plc: Beat market estimates for fourth-quarter results, with an upbeat forecast for 2024, highlighting the benefits of its consumer health unit spin-off.
- Juniper Networks Inc: Reported fourth-quarter revenue below market expectations, impacted by weak spending by cloud computing and enterprise clients.
- Match Group Inc: Forecasted first-quarter revenue below expectations as users cut back spending on dating apps amid economic uncertainty. Authorized a $1 billion share buyback plan.
- Mondelez International Inc: Posted a rise in fourth-quarter sales but experienced lower volumes due to price hikes affecting demand for its chocolates and salty crackers.
- Nasdaq Inc: Reported a 24.6% rise in fourth-quarter profit, driven by strong performance in its solutions business.
- Nomura Holdings Inc: Announced a share buyback of up to 4% of its own shares after reporting record net revenue from its investment banking division.
- Novartis AG: Reported a 6% gain in adjusted net income that fell short of market expectations, citing higher-than-expected corporate expenses.
- Novo Nordisk A/S: Novo Nordisk, the Danish pharmaceutical company, is optimistic about its future, forecasting double-digit sales and operating profit growth for the coming year. The positive outlook is attributed to the easing of restrictions on U.S. supplies of its popular weight-loss drug, Wegovy.
- Robert Half Inc: Robert Half, a California-based recruitment services firm, presented a cautious outlook due to sluggish hiring activity impacting its first-quarter revenue. Despite high job opening demand and tight candidate supply, hiring velocity has been affected, leading to an expected first-quarter revenue range of $1.44 billion to $1.54 billion, below estimates. I
- Skyworks Solutions Inc: Skyworks Solutions, a key Apple supplier, exceeded market estimates for quarterly profit. The success is attributed to stabilizing end-markets and the increasing usage of 5G technology, driving demand for the company’s chip solutions.
- Starbucks Corp: Starbucks, the global coffee chain, revised its annual sales forecast lower, citing the impact of the Israel-Hamas war on its Middle East business. The company warned of softer demand in January and a slow recovery in China, affecting its second-quarter performance.
- Stryker Corp: Medical technology company Stryker Corp provided a positive outlook for 2024, forecasting profit above Wall Street estimates. Anticipating a post-pandemic increase in volume for certain surgical procedures, the company reported full-year 2023 sales of $20.5 billion,
- Thermo Fisher Scientific Inc: Thermo Fisher Scientific, a medical equipment maker, forecasted annual profit below Wall Street estimates, expecting a continued slump in demand for its services used in the production of therapeutics and vaccines in 2024.
- United Microelectronics Corp: Taiwanese chipmaker United Microelectronics Corp (UMC) expressed cautious optimism for 2024 amid macroeconomic uncertainty. UMC increased capital spending by 10%, expecting a mild increase in overall wafer demand in the first quarter.
- Cardinal Health Inc: Cardinal Health Inc announced a significant move, agreeing to acquire private tech company Specialty Networks for $1.2 billion in cash. This acquisition aims to expand Cardinal Health’s services in the specialty drug space.
Advanced Micro Devices Inc (AMD): Bernstein has raised the target price for AMD to $140 from $120, citing expectations for growth in the company’s data center and clients throughout the year.
Alphabet Inc: Roth MKM has reduced the target price for Alphabet to $164 from $166, attributing this adjustment to the company’s mixed fourth-quarter results.
General Motors Co: Wells Fargo has increased the target price for General Motors to $28 from $27. This change is based on the company’s better-than-expected guidance for the fiscal year 2024.
Microsoft Corp: RBC has raised the target price for Microsoft to $450 from $415, following the company’s strong second-quarter results.
United Parcel Service Inc (UPS): JPMorgan has lowered the target price for UPS to $154 from $156. This adjustment is driven by concerns that margins could contract if the company is unable to generate sufficient productivity gains to offset contractual wage increases.
Canadian Pacific Kansas City Ltd: JPMorgan has raised the target price for Canadian Pacific Kansas City to C$121 from C$116. This change is based on the company’s operating profit, providing momentum as it enters fiscal year 2024.
Manulife Financial Corp: CIBC has increased the target price for Manulife Financial to C$30 from C$28. The rationale behind this adjustment is the belief that the company’s earnings estimates should rise, considering current equity market levels.
Metro Inc: RBC has reduced the target price for Metro Inc to C$82 from C$83. This adjustment follows a slowdown in the company’s margin and progress on key distribution network projects.
Sun Life Financial Inc: CIBC has raised the target price for Sun Life Financial to C$75 from C$73. This change is attributed to the company’s strong sales and earnings growth, particularly in the Asian region.