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Monday, August 12

Some of the largest macro moves in the market today include: Ethereum +4.6%. Copper +1.4%. Nikkei 225 Index (Japan) +1.6%. Some of the largest moves among US mega-cap stocks include: Eli Lilly and Co (LLY) +1.7%. Walmart Inc (WMT) +0.8%. 

The market is currently focused on several significant economic data releases and central bank policies. Investors are particularly attentive to upcoming U.S. inflation reports, with the Consumer Price Index (CPI) set for release on Wednesday, which could influence expectations of a Federal Reserve rate cut in September.

In Canada, building permits fell sharply by 13.9% month-on-month in June against an expected rise of 5.5%, indicating potential weaknesses in the construction sector that may impact broader economic conditions.

Global equity markets have shown mixed performance; Asian stocks mostly rose despite concerns about U.S. growth being overdone while European indices traded cautiously higher ahead of key regional earnings updates and German wholesale price data showing marginal declines year-over-year but slight monthly gains.

Oil prices continue their upward trend due to geopolitical tensions involving Iran-Israel conflicts and supply disruptions from Libya's largest oil field shutdown amid civil unrest, contributing further volatility to energy markets.

Lastly, investors remain cautious as they navigate through these uncertainties with some relief seen from recent positive jobless claims data out of the United States alleviating recession fears temporarily.

XLE [+0.8%]
The Energy Select Sector SPDR Fund (XLE) has seen a price increase of 0.8% since Friday. Key contributors to this performance included Exxon Mobil Corp, which reported operational disruptions at its Beaumont, Texas and Joliet, Illinois facilities, affecting production levels. Other significant contributors were Chevron, EOG Resources, Occidental Petroleum, and Halliburton. Additionally, oil prices are slightly up due to geopolitical risks in the Middle East, particularly following U.S. Defense Secretary Lloyd Austin's announcement regarding missile submarine deployment amid rising tensions with Iran. Reports also suggest an expected increase in crude oil inventories, despite new refining capacities coming online, as traders await potential positive demand signals from OPEC later this week.

USO [+1.0%]
Oil prices have shown strength this morning, with Brent crude rising above 80 per barrel and WTI crude increasing by 1.1% to 77.70. This marks the fourth consecutive day of price surges, driven by escalating geopolitical tensions in the Middle East, particularly due to Iran's military activities and missile attacks on Israel. These developments have raised supply concerns and heightened demand for safe-haven assets like gold, which often correlates with oil prices. Additionally, OPEC has revised its 2024 global oil demand growth forecast downwards to 2.11 million barrels per day, reflecting diminished expectations from China's economic activity. This could lead to potential volatility in crude markets.

KEY |+20.3%|+3.4B
Scotiabank has agreed to acquire a 14.9% equity interest in KeyCorp for approximately $2.8 billion, at a price of $17.17 per share, which represents an 11% premium to the last 20-day volume-weighted average price. This investment will occur in two stages, beginning with an initial 4.9% stake expected to close in the fourth quarter of fiscal 2024, followed by an additional 10% anticipated to finalize in fiscal 2025. The deal is projected to enhance KeyCorp's capital position, significantly increasing its CET1 capital ratio and providing greater capacity for growth. Furthermore, the investment is expected to be accretive to earnings per share in the first year following the completion of both investment stages, allowing Scotiabank to appoint two individuals to KeyCorp's board of directors.

SBUX | +2.4% | +2.1B
Activist investor Starboard Value has acquired a stake in Starbucks Corp, leading the company to explore measures to enhance its stock price. This development has coincided with an increase in Starbucks shares, reflecting expectations for potential changes influenced by activist pressures. Additionally, Elliott Investment Management is also involved, advocating for strategic adjustments at the company. The exact size of Starboard's stake remains undisclosed, but this involvement follows a decline in sales in key markets, including the U.S. and China.

GOLD |+2.4%|+755.3M
Barrick Gold Corp reported second-quarter adjusted earnings per share of $0.32, exceeding analyst expectations of $0.27. Revenue reached $3.16 billion, surpassing the anticipated $3.11 billion. Gold production totaled 948,000 ounces, above estimates of 905,800 ounces. The average realized gold price increased significantly to $2,344 per ounce from $1,972 year-over-year. All-in sustaining costs rose to $1,498 per ounce compared to $1,355 in the prior year. The company declared a quarterly dividend of $0.10 per share and repurchased 2.95 million shares under its buyback program. Social media sentiment reflected positive views on growth opportunities and increased demand for gold amid global economic uncertainty. Analysts noted Barrick's strong financial performance and strategic acquisitions, while discussions around sustainable mining practices gained traction. In related market movements, silver prices rose by 1.72%, often influencing gold equities like Barrick Gold Corp.

MNDY |+9.0% | +1.1B
Monday.Com Ltd reported strong financial results for Q2, achieving an adjusted EPS of 0.94, significantly surpassing the consensus estimate of 0.56. Revenue reached 236.11 million, exceeding expectations of 229 million. The company provided an optimistic outlook for Q3, projecting revenue between 243 million and 247 million. For the full fiscal year 2024, total revenue is anticipated to be between 956 million and 961 million, reflecting a year-over-year growth of 31% to 32%. Additionally, free cash flow is expected to range from 70 million to 74 million, with operating income forecasted between 19 million and 23 million. The stock price has increased notably following this positive performance and guidance.

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