Here are five things you need to know this morning:
Show off: U.S. markets continue to be global show-offs. The S&P 500 closed at a record high for the second session in a row and the Dow joined, closing above 38,000 for the first time ever. The TSX continues to be a spectator on the sidelines. This morning, the TSX could get a lift from the material sector, which thus far has been the worst performer in 2024. Copper is popping a little bit after Bloomberg reported that China is contemplating a nearly US$280 billion rescue package to help support the stock market. Chinese markets are among the worst performing around the world and have lost $6 trillion in value since their peak in 2021. Earnings are also getting into full swing (more on big movers below) in the U.S., and starting to trickle on the TSX. Tonight we get Netflix and CN Rail. Tomorrow, the Bank of Canada makes its rate decision (reminder, now at 9:45 a.m. ET!).
Meet the misses: Shares of 3M are under pressure in the pre-market even after the company beat expectations. The beat, however, is being viewed as low quality and the outlook for profit was below expectations. In addition to macro headwinds and demand uncertainty, the company also has self-made problems including liabilities linked to “forever chemicals” leaching into the drinking water supply. It’s one of the least loved stocks on Wall Street, with only two buy ratings. Shares of GE are also under pressure, but less so, as the company’s earnings outlook was also a miss. This comes as the company is poised to break itself apart (yes, again). This time they are splitting up aerospace and energy into separate companies, after spinning out health-care two years ago. Investors are excited about the prospect and today’s mild move lower is in the context of the stock trading near six-year highs. D.R. Horton is bringing down the homebuilders this morning after reporting weaker-than-expected orders.
Marching to the beat: There are some bright spots. Shares of United Airlines are flying higher (sorry) after earnings beat expectations. They did warn about results in the upcoming quarter because of the Boeing grounding of Max 9 jets. Shares of Verizon are pumping in the pre-market after adding new retail mobile customers for the first time in four quarters and many more than analysts were expecting. The stock is poised to open at an 11-month high.
Bet the farm: Looks like Fairfax is going to be successful in taking Farmers Edge private at $0.35 per share. It marks the end of perhaps the most glaring example of the pandemic boom-bust cycle in tech. Farmers Edge, which bills itself as a digital agriculture company using technology to improve outcomes for farmers, went public in March 2021 at $17 per share. Sales fell every year after and are currently half of what they were four years ago, according to data compiled by Bloomberg.
Let’s get ready to rumble: I know I don’t look like the type, but back in the day I was big fan of wrestling. Back when it was called the WWF, the Kanwars would gather every weekend, order the pay-per-view shows and root for our favourites. While my obsession was of The Rock, Triple H, Chyna vintage, I’ve still maintained a fondness for the sport in which violent fights are peppered throughout a pretty compelling plot line. So I watch with intrigue how the sport has evolved. The WWE, as it is now called, spiked this morning in the pre-market because Netflix announced it has purchased the rights to “Raw.” If you are a Netflix customer, the pay-per-view live events will be included at no additional cost. Since my kids don’t even know what cable is, this could be the right time to pass down the torch of a beloved Kanwar family tradition. The eldest is only six, but it’s never too early to start!