Global Markets
In Asia, Chinese stocks faced a decline as investors secured profits and awaited further details on stimulus plans. Japan’s Nikkei witnessed a slump, mirroring the downturn in US chip-sector shares. The US dollar edged lower as traders assessed unexpectedly robust economic growth data and its potential impact on the Federal Reserve’s rate decisions.
The Canadian main stock index was flat trading, while US markets experienced a decline, particularly in chip stocks following a gloomy revenue forecast from Intel. Investors were keenly watching a crucial inflation report that could influence the Federal Reserve’s monetary policy. UK stocks surged, and European equities gained momentum, driven by positive quarterly updates from luxury group LVMH and spirits maker Remy Cointreau.
Stock News
- Tesla Recall: Tesla announced a recall of nearly 200,000 Model S, X, and Y vehicles in the US due to a software malfunction affecting visibility during reversing, according to the National Highway Traffic Safety Administration (NHTSA).
- Intel’s Bleak Forecast: Intel faced a significant stock drop as it provided a dismal first-quarter revenue outlook, grappling with uncertain demand in traditional computing markets and efforts to catch up in the AI race.
- OPEC+ Oil Policy: OPEC+ was unlikely to decide on oil production levels on Feb 1 and planned to wait for several weeks before making decisions on output policy, according to sources.
- American Express Results: American Express missed fourth-quarter profit estimates, citing higher loan loss provisions as the company prepared for potential defaults amid elevated interest rates. The company’s total revenue for Q4 rose 11% to $15.80 billion.
- Autoliv’s Positive Q4: Autoliv, the world’s largest producer of airbags and seatbelts, reported a fourth-quarter operating profit above expectations and anticipated an adjusted operating margin of about 10.5% for the full year of 2024.
- Arthur J. Gallagher’s Earnings: Insurance broker Arthur J. Gallagher reported a rise in fourth-quarter adjusted profit, driven by increased commissions and fees, reflecting resilient demand for insurance products.
- Capital One’s Q4 Profit Drop: Capital One posted a 43% drop in fourth-quarter profit, attributing it to increased funds set aside to cover loan losses and a charge related to replenishing a government deposit insurance fund.
- Levi Strauss & Co’s Forecast: Levi Strauss & Co forecasted annual sales and profit below Wall Street expectations, planning to cut 10-15% of global corporate jobs amid challenges in its wholesale business.
- T-Mobile’s Subscriber Growth: T-Mobile forecasted higher-than-expected monthly bill-paying phone subscriber growth for the year, driven by its broad 5G coverage and promotional offers. However, its shares fell in extended trading after missing Q4 profit targets.
- Visa’s Outlook: Visa provided a tepid forecast for current-quarter revenue growth, despite beating earnings estimates. The company expressed optimism about spending trends throughout the year, citing improved travel and strong holiday shopping.
- Western Digital’s Loss: Data storage products maker Western Digital posted a wider-than-expected quarterly adjusted loss due to structural changes in its flash and HDD businesses.
- Weyerhaeuser’s Lower Profit: Timber company Weyerhaeuser reported a lower adjusted profit, impacted by weakness in its wood products business.
- JPMorgan Chase & Co underwent a significant executive reshuffle in its investment banking and consumer units, with Marianne Lake appointed as the sole CEO of the consumer division.
- UBS Group AG, Min Huang, former head of asset management at Credit Suisse in Asia Pacific, is departing as part of UBS’s review of its China business following global leadership changes.
- The U.S. Federal Trade Commission (FTC) has issued orders to Alphabet Inc, Amazon.com Inc, Microsoft Corp, OpenAI, and Anthropic, requiring them to provide information on recent investments and partnerships involving generative AI companies and cloud service providers.
- Amazon.com Inc’s AWS announced plans to invest $10 billion in building two data center complexes in Mississippi, following recent major investments in Japan and Google’s expansion near London. This expansion is in response to the increasing demand for cloud services, especially with the adoption of new artificial intelligence technologies.
- BHP Group Ltd announced its review of a Brazilian Federal Court decision regarding a $31.53 billion government claim over the 2015 collapse of the Fundao dam, owned by its joint venture Samarco with Vale SA.
- Boeing Co’s issues with its 737 MAX jets are disrupting the aerospace industry’s 2024 plans, with U.S. regulators freezing production due to ongoing problems.
- Equinor ASA, the Norway-based energy company, maintains its ambition to achieve 12-16 gigawatts (GW) of installed renewable energy capacity by 2030.
- Denmark’s Orsted submitted a new proposal in collaboration with Eversource Energy for the Sunrise Wind project in response to New York’s latest offshore wind solicitation. The Sunrise Wind project is a 924 MW offshore wind farm scheduled for completion by 2026.
- Mexican media company Grupo Televisa SAB is set to launch the spin-off of its sports, gaming, and some editorial operations in February, as part of its strategy to focus on its core business.
- PTC Therapeutics Inc: The European health regulator’s advisory panel reaffirmed a negative opinion for PTC Therapeutics’ drug, Translarna, used to treat Duchenne muscular dystrophy (DMD) in ambulatory children with a specific genetic mutation. The drug had conditional approval in the EU in 2014. The Committee for Medicinal Products for Human Use (CHMP) issued a negative opinion, leading to the withdrawal of the drug in Europe. The European Commission is expected to ratify the opinion, resulting in the removal of Translarna from the market within 67 days.
- Salesforce Inc: Salesforce is reportedly laying off about 700 employees, constituting approximately 1% of its global workforce. This move follows previous job cuts last year when Salesforce reduced its workforce by 10% and closed some offices. The current layoffs are seen as a routine adjustment, with the company still having 1,000 open positions. Salesforce aims to streamline its workforce after pandemic-induced rapid hiring led to an inflated staff size.
- Tesla Inc: Tesla is recalling nearly 200,000 Model S, X, and Y vehicles in the U.S. due to a rearview image display issue while reversing. The National Highway Traffic Safety Administration (NHTSA) raised concerns about software instability affecting driver visibility and increasing the risk of a crash. Tesla has released a free over-the-air (OTA) software update to address the problem. Elon Musk’s warning that sales growth would slow this year, coupled with price cuts impacting margins, contributed to Tesla’s stock decline.
- Vodafone Group Plc: The UK’s antitrust watchdog, the Competition and Markets Authority (CMA), has initiated a formal investigation into the $19 billion merger between Vodafone’s UK operation and CK Hutchison’s Three UK. The CMA will assess whether the deal may negatively impact competition in the UK telecommunications market. The investigation is scheduled to conclude by March 22, at which point the CMA will decide whether to proceed to an in-depth, phase 2 probe.
- Wells Fargo & Co: Wells Fargo has increased CEO Charles Scharf’s total compensation for 2023 to $29 million. The compensation includes a base salary of $2.5 million and a total variable compensation of $26.5 million, comprising $6.6 million in cash and $19.9 million in long-term equity. The bank’s board expressed confidence in Scharf’s leadership and his role in driving the ongoing transformation of Wells Fargo. Scharf’s compensation for 2022 was $24.5 million.
Top Analyst Ratings
- Capital One Financial Corp: Piper Sandler raised the target price for Capital One Financial Corp to $126 from $123. The decision is based on the management’s strategic focus on marketing, with Piper Sandler noting significant opportunities within the card market.
- Comcast Corp: TD Cowen increased the price target for Comcast Corp to $50 from $49. This adjustment follows Comcast’s better-than-expected fourth-quarter results.
- Intel Corp: Wells Fargo reduced the target price for Intel Corp to $48 from $52. The decision is influenced by ongoing uncertainties regarding Intel’s ability to achieve a sustainable gross margin and positive free cash flow.
- Union Pacific Corp: JPMorgan lowered the target price for Union Pacific Corp to $237 from $239. The rationale is based on the belief that the company might face volume challenges in 2024, particularly in international intermodal operations.
- Visa Inc: Wedbush increased the target price for Visa Inc to $280 from $270. This adjustment is attributed to Visa’s resilient first-quarter results amid ongoing global macroeconomic volatility.
- B2Gold Corp: National Bank of Canada reduced the target price for B2Gold Corp to C$5.5 from C$6. The decision is linked to concerns about geopolitical risks, especially related to the Mali-based Fekola mine, where the company has operating mines and projects.
- Fairfax Financial Holdings: National Bank of Canada raised the target price for Fairfax Financial Holdings to C$2,000 from C$1,800. The decision reflects confidence in the company’s ability to deliver results in soft market conditions.
- Mattr Corp: Atb Capital Markets increased the target price for Mattr Corp to C$25.5 from C$21. Atb Capital Markets is optimistic about the company’s growth potential, noting a well-structured plan to increase revenue in its primary business lines.
