Stock Market Update: Aug 21st, 2024

Global Markets

Canadian Markets

The Toronto Stock Exchange rose moderately as oil prices increased, providing a boost to energy-related stocks. Recent CPI data dropped to 2.5 percent, showing that inflation is slightly easing.  The possibility of a rail strike in Canada is also weighing in on economic sentiment.

American Markets:

U.S. markets traded with a mixed performance, as traders were cautious as revised  data showed the economy had created almost 1 million jobs less than previously reported.

European Markets:

European equities were higher, largely driven by gains in mining stocks. UK markets also rose slightly, even though the pounds is trading at current highs.

Japanese Markets:

In Japan, the Nikkei index ended lower, as the yen rose. A stronger yen tends to impact the competitiveness of Japanese exports, which can lead to reduced earnings for Japanese companies operating internationally.

Chinese Markets

Chinese markets dropped almost half a percent, as Chinese bank profit continues to slow, and investors continue to emit concerns about the negative economic conditions.

Hong Kong Markets:

Hong Kong’s stock market closed lower following a significant decline in JD.com’s share price. The drop came after Walmart, the largest shareholder of JD.com, sold its entire stake in the company. This sale raised concerns about the future of JD.com and contributed to the overall negative performance in Hong Kong stocks.

Currency and Commodity Markets:

The U.S. dollar edged up slightly, reflecting a modest strengthening against other major currencies. This was part of a broader trend of currency fluctuations as investors assessed economic signals from different regions. Meanwhile, gold prices declined, reflecting reduced investor demand for safe-haven assets amid the shifting economic landscape and market uncertainties.

Corporate Stock News

Alphabet Inc:

• U.S. Appeals Court: Google must face a revived lawsuit from Chrome users alleging unauthorized data collection, despite previous settlements.
• Competition Investigations: The UK’s competition watchdog has closed investigations into Apple and Google’s app stores, awaiting new digital market regulations.

Amazon.com Inc:

• Predatory Pricing Accusations: India’s commerce minister criticized Amazon and other e-commerce companies for practices that allegedly harm local retailers, though evidence was not provided.

Arch Resources Inc & Consol Energy Inc:

• Merger Announcement: Arch Resources will merge with Consol Energy in an all-stock deal valued at $5.2 billion, aiming for significant cost savings post-transaction.

Coty Inc:

• Quarterly Results: Missed revenue expectations due to the divestiture of Lacoste fragrance and cautious retailer orders, with net revenue rising nearly 1% but falling short of estimates.

Hyatt Hotels Corp:

• Acquisition: Hyatt is acquiring Standard International for $150 million, with potential additional payments based on future property additions, to expand its lifestyle hospitality offerings.

Jack Henry & Associates Inc:

• Profit Forecast: The company forecasted fiscal 2025 profit above estimates, with revenue rising 4.7% in the latest quarter, driven by strong demand for its financial tech products.

JD.Com Inc & Walmart Inc:

• Stake Sale: Walmart sold its entire stake in JD.com, valued up to $3.74 billion, as it shifts focus to its warehouse business Sam’s Club in China.

Kenvue Inc:

• Legal Outcome: Plaintiffs’ bid to revive claims that Tylenol causes ADHD was rejected due to lack of key expert testimony, ending remaining litigation.

Keysight Technologies Inc:

• Quarterly Results: Beat revenue and profit estimates despite a 12% revenue decline; expects fourth-quarter revenue and earnings within forecast ranges.

Maersk:

• Booking Update: Maersk reversed its earlier decision and continues to accept bookings to and from Canada amid potential rail stoppages.

Macy’s Inc:

• Sales Forecast: Lowered annual net sales forecast due to weak consumer spending, with second-quarter sales falling more than expected.

Microchip Technology Inc:

• Security Incident: Disruption from an unauthorized party affected operations, leading to lower production levels and order fulfillment issues.

NextDecade Corp:

• CCS Facility Withdrawal: The company withdrew its application for a carbon capture and storage project at its Texas LNG facility due to regulatory and development delays.

PagSeguro Digital Ltd:

• Earnings Update: Raised 2024 profit and payment volume estimates following strong second-quarter earnings, with net recurring profit and revenue exceeding expectations.

Peloton Interactive Inc:

• Upcoming Report: Investors await updates on CEO appointment and subscriber growth as the company continues to address post-pandemic sales challenges.

Regeneron Pharmaceuticals Inc:

• FDA Rejection: The FDA declined approval for Regeneron’s multiple myeloma therapy due to issues with a third-party manufacturer.

Rivian Automotive Inc & Stellantis NV:

• Leadership Change: Rivian’s manufacturing head is joining Stellantis, while Rivian appoints a new interim head of production.

Stellantis NV:

• CEO Visit: CEO Carlos Tavares plans a visit to Detroit to address issues and develop strategies for improving Stellantis’ North American operations.

Target Corp:

• Profit Forecast: Raised annual profit outlook and exceeded second-quarter sales expectations, driven by strong grocery and essentials sales.

Tesla Inc:

• Vehicle Recall: Announced recall of 9,136 Model X vehicles due to potential issues with roof trim, marking a rare physical recall for the company.

Vector Group Ltd:

• Acquisition: Japan Tobacco will acquire Vector Group in a $2.4 billion deal, with a tender offer to take Vector private.

Warner Bros Discovery Inc:

• Studio Investment: Plans to invest at least $8.5 billion in a new studio in Las Vegas, pending state tax incentives, to expand film and TV production capabilities.