Market News & Analysis: Nov 7th, 2024

Global Markets

Canadian Markets:

Canada’s main stock index saw an increase of 0.75%, largely driven by gains in the energy and mining sectors. Rising oil prices provided a boost to energy stocks, while a rise in gold prices strengthened the shares of gold mining companies, both key components of Canada’s commodity-heavy stock market. The optimism around these sectors offset some market caution, contributing to the positive close.

American Markets:

U.S. stocks also advanced, reacting to the Federal Reserve’s latest monetary policy decision, which cut the interest rate from 4.75% to 4.50%. The rate reduction signaled a softer approach to monetary tightening, encouraging investors with hopes of reduced borrowing costs and stronger economic support. Gains were seen across sectors, with particular strength in technology and consumer goods, as the market digested the potential benefits of lower rates on corporate earnings and consumer spending.

European Markets:

European stock markets closed higher, supported by rallies in technology and resources stocks. The technology sector in particular benefitted from positive earnings reports and a generally favorable outlook on the impact of the Fed’s rate cut. Resource stocks gained as rising oil and commodity prices helped buoy sentiment, boosting indices across major European markets.

Asian Markets:

Stocks in China and Hong Kong posted gains, lifted by renewed investor optimism around potential government stimulus measures aimed at supporting economic growth. Hopes that Beijing would implement policies to boost infrastructure and consumer spending fueled buying in key sectors like technology, real estate, and financials, helping both markets close higher.

Japan’s Nikkei index, which opened higher, ultimately erased its early gains as investors chose to lock in profits after a strong session the previous day. The profit-taking came as investors weighed concerns about the strength of the yen and ongoing inflation pressures, which could impact Japan’s export-heavy economy.

Commodities: Oil and Gold:

• Oil: Oil prices slipped as the U.S. dollar strengthened, making oil more expensive for holders of other currencies. Additionally, China, one of the world’s largest oil importers, reported lower-than-expected crude imports, adding to concerns about demand in the global oil market.
• Gold: Gold prices rose, reflecting cautious investor sentiment amid economic uncertainty, though they remained close to a recent three-week low. The metal found some support from inflation concerns and demand for safe-haven assets, despite the dollar’s relative strength tempering further gains.

Corporate Stock News

Albemarle Corp: Reported a $1.11 billion Q3 loss due to a lithium price drop, reducing its capital budget. Sales volume rose despite a revenue fall to $1.35 billion.

AMC Entertainment: Q3 revenue declined by 4.1% to $1.35 billion with lower attendance due to fewer blockbusters and economic constraints.

Avid Bioservices Inc: Announced acquisition by GHO Capital Partners and Ampersand Capital for $1.1 billion, at $12.50 per share. The deal is expected to close in early 2025, and Avid will no longer be publicly listed.

Boeing Co: China Airlines may split a major jet order between Airbus and Boeing. Separately, Israel agreed to purchase 25 new Boeing F-15 jets as part of a U.S.-approved $5.2 billion aid package, with an option for 25 more.

Ameren Corp: Posted a Q3 profit drop due to rising costs and lower heating demand. EPS guidance for 2025 is $4.85-$5.05.

Ansys Inc: Beat Q3 revenue and EPS estimates. The company is set to be acquired by Synopsys in 2025.

APA Corp: Lowered its 2025 capital forecast as Q3 profit slightly missed estimates due to lower oil prices.

Atmos Energy Corp: Raised its quarterly dividend and saw a 20% rise in Q4 profit, aided by rate increases.

Barrick Gold: Missed Q3 profit estimates due to higher costs and lower production but expects Q4 improvements.

Beyond Meat: Cut the top end of its annual revenue forecast amid reduced demand but beat revenue and EPS estimates.

Bumble Inc: Reported its first sales decline since going public, with Q3 revenue down 0.7% to $273.6 million.

Carlyle Group: Q3 profit flat but beat estimates with higher fee income; deployed $3.9 billion in acquisitions.

Corteva Inc: Lowered full-year sales outlook as Q3 net sales fell 10% due to decreased demand for agricultural chemicals.Coty Inc: Lowered annual profit guidance, citing weak demand in key markets. Fragrance sales rose due to new launches.

Elf Beauty: Raised its annual sales and profit forecasts, boosted by affordable products in the U.S. and overseas.

Energy Transfer: Reported record Q3 profit driven by high crude oil transport volumes; received requests for 90+ new natural gas connections.

Fair Isaac Corp (FICO): Beat Q4 profit estimates due to strong demand for credit-scoring products; expects 2025 revenue of $1.98 billion.

GlobalFoundries Inc & Taiwan Semiconductor Manufacturing Co Ltd: Both are set to receive final Chips Act awards from the U.S. Commerce Department, indicating progress in award distribution aimed at strengthening U.S. chip production.

Freshworks Inc: Increased its annual forecasts and announced layoffs, driven by strong demand for its AI-driven software.

Gilead Sciences: Raised full-year earnings outlook after beating Q3 profit estimates, with revenue up 7%.

Halliburton: Q3 profit missed estimates due to reduced drilling demand in North America, with revenue down 8.5%.

Host Hotels & Resorts: Cut 2024 FFO forecast due to weak leisure demand in the U.S. and a slow recovery in Maui.

Kenvue Inc: Reported a small sales miss in Q3, hurt by weak skin health product demand, but growth in self-care helped offset declines.

Kyndryl Holdings: Beat Q2 revenue estimates as demand rose for generative AI consulting services.

Lyft Inc: Raised Q4 gross booking forecast, with Q3 revenue up 31.5%, reflecting strong demand for ride-hailing.

Match Group: Missed Q3 revenue estimates and projected lower Q4 revenue due to slower growth in its dating apps.

Marathon Oil: Raised its 2024 production forecast and beat Q3 earnings estimates due to higher oil demand.

McKesson Corp: Raised its annual profit forecast after reporting Q2 revenue growth driven by specialty drug demand in the U.S.

Moderna Inc: Reported an unexpected profit for Q3 due to cost-cutting and higher vaccine sales, achieving $13 million, or 3 cents per share, versus a $3.6 billion loss last year. Revenue projections remain at $3-3.5 billion for 2024.

Nutrien Ltd: Missed Q3 profit estimates due to lower crop prices and adjusted its annual sales outlook, projecting phosphate sales to decrease but potash sales to rise. Q3 profit dropped 70% to $25 million, with 5% lower net sales.

PTC Inc: Forecasted below-estimate revenue for Q1, citing weak demand in industrial design software. PTC authorized a $2 billion share repurchase, with annual revenue expected to reach $2.51-2.61 billion.

Qualcomm Inc: Projected higher-than-expected Q1 sales due to strong Chinese smartphone launches. Announced a $15 billion stock buyback. For Q4, Qualcomm exceeded estimates with $10.24 billion in sales and $2.69 EPS.

Steris Plc: Beat Q2 profit estimates on strong demand for healthcare tools, keeping its FY 2025 revenue growth forecast of 6.5%-7.5%. Q2 revenue hit $1.3 billion, with healthcare segment sales up 9%.

Take-Two Interactive Software Inc: Exceeded expectations for Q2 bookings and profits, driven by popular gaming franchises. Future bookings are expected to grow with upcoming releases, including “GTA VI.”

Tapestry Inc: Raised its annual earnings outlook after strong sales of its Tabby handbags. Revenue for Q1 was $1.51 billion, above analyst estimates. Pending merger with Michael Kors’ parent company, Capri, remains blocked.

Trump Media & Technology Group Corp: Short sellers lost $420 million as the stock tracked Trump’s election odds, creating volatility and potential for a short squeeze.

UBS Group AG: Successfully piloted a blockchain-based payment system, UBS Digital Cash, for cross-border payments, enhancing cash visibility for multinational clients.

Williams Companies Inc: Narrowly beat Q3 profit estimates and raised its annual profit guidance to $7-7.15 billion. Revenue grew 3.6% to $2.65 billion due to increased natural gas flows.

Wolfspeed Inc: Forecasted Q2 revenue below expectations due to weak automotive demand and will incur $174 million in restructuring costs to close a facility and shift production to a more efficient plant.