Stock Market Update & Analysis: Aug 14th

Global Markets

Canada:

The Toronto Stock Exchange (TSX) rose a quarter of a percent, as sentiment is still cautious, as investors search for direction. Housing data shows issues in the Calgary and Toronto markets, as bank sales rise.

USA

American markets displayed mixed results as investors shifted their focus to the U.S. Consumer Price Index (CPI) data. The CPI, a key measure of inflation, rose by 2.9% in July compared to the same month last year. This marks a slight easing from June’s 3% annual gain, indicating a potential slowdown in inflationary pressures. The mixed performance of U.S. markets might reflect investor uncertainty or anticipation regarding the Federal Reserve’s response to this CPI data.

Europe

The STOXX 600, a broad European stock index, posted gains, suggesting positive investor sentiment across Europe. This could be due to various factors, including economic data or corporate earnings reports.London’s FTSE 100 also advanced, supported by UK inflation data for July coming in below expectations. Lower-than-expected inflation can be interpreted as a sign of economic stability, which might boost investor confidence in the UK market.

Japan

Japan’s Nikkei index rose moderately as investors digested the news of the Japanese Prime Minister’s impending resignation. Such political developments can often lead to market volatility, but in this case, the market’s rise might indicate optimism about potential future leadership changes or economic policies.

China

Chinese stocks declined to their lowest levels in six months. This drop could be attributed to ongoing economic challenges in China, such as weaker-than-expected economic data, which continues to affect investor confidence.

Commodities and Currencies:

Gold Prices: Gold prices remained near record highs, reflecting ongoing investor demand for safe-haven assets amid economic uncertainties and market fluctuations.U.S. Dollar: The U.S. dollar was trading close to a one-week low, which could be due to various factors including market reactions to the latest economic data or geopolitical events.Oil Prices: Oil prices experienced a slight dip. This could be due to fluctuations in supply and demand dynamics, geopolitical tensions, or changes in economic forecasts impacting the energy sector.

Corporate stock News

• Alphabet Inc: The U.S. Department of Justice is considering drastic measures, including a potential breakup of Google, following a recent ruling that the tech giant violated antitrust laws by monopolizing the online search market.
• Allstate Corp: The insurer has sold its employer voluntary benefits business to StanCorp Financial Group for $2 billion. The deal, expected to close by April-June 2025, is subject to regulatory approvals and will contribute to Meiji Yasuda Life Insurance’s goal of significant profit growth.
• Arm Holdings Plc & Intel Corp: Intel sold its 1.18 million shares in Arm Holdings for about $146.7 million. This sale comes as Intel faces challenges in the chip industry and ongoing financial difficulties.
• Booking Holdings Inc & Expedia Group Inc: These companies, alongside other vacation rental firms, are increasing lobbying efforts to influence U.S. lawmakers and prevent local restrictions on short-term rentals, responding to slowed growth in rental supply.
• Flutter Entertainment Plc: The company has raised its full-year profit forecast after a strong second quarter. It also confirmed it will not implement a surcharge on customers in high-tax U.S. states, a move that led rival DraftKings to drop similar plans.
• Grail Inc: The cancer test maker has cut 350 jobs to focus on its flagship Galleri cancer-detection test, extending its cash runway and reporting a 43% increase in second-quarter revenue.
• General Motors Co: GM is facing a lawsuit from Texas, accusing it of collecting and selling driver data without consent. The lawsuit stems from a probe into data practices among automakers.
• Kellanova: Mars, the candy giant, plans to acquire Kellanova (maker of Cheez-It and Pringles) for nearly $36 billion, marking a significant deal in the packaged food industry and surpassing Mars’ previous major acquisition.
• Performance Food Group Co: The company will acquire Cheney Bros for $2.1 billion, a move that will enhance its presence in the Southeastern U.S. and is expected to be accretive to earnings.
• Riot Platforms Inc: Riot Platforms has increased its stake in Bitfarms to 18.9%, acquiring additional shares and leading to changes in Bitfarms’ board composition.
• Southwest Airlines Co: Elliott Investment Management is pushing for major changes at Southwest Airlines, including replacing 10 board members, amid concerns over the airline’s performance and stock price decline.
• Spotify Technology SA: Spotify will update its app on Apple devices in the EU to include pricing details, complying with new regulations while avoiding additional fees by not linking to external purchase options.
• Tesla Inc: The National Highway Traffic Safety Administration has closed a preliminary investigation into Tesla vehicles over front suspension failures. The closure does not rule out safety concerns.
• UBS: The bank reported a net profit of $1.14 billion for the April-June period, marking the first results since its merger with Credit Suisse.