Market Analysis: July 15th, 2025

Globe and Mail

a day ago

Global Markets
Canadian Markets
Canada's main stock index dropped following the release of data showing that the country's inflation rate had risen to 1.9% in June. This uptick in inflation has effectively ruled out the possibility of a Bank of Canada rate cut in July, as central banks typically raise interest rates to combat inflation. The 1.9% inflation is still below the Bank of Canada's 2% target, however the small spread leaves little room for the Bank of Canada to loosen monetary policy in the short term, causing traders to head to the sidelines, in a profit taking and risk off move.
American Markets
U.S. stocks traded Tuesday mixed as the second-quarter earnings season commenced. Corporate earnings reports started trickling in, with market participants closely watching for any signs of economic slowdowns or improved profitability. The June Consumer Price Index (CPI) report showed core inflation—which excludes volatile items like food and energy—rose by 0.2% from the previous month. This increase was slightly lower than economists' expectations but still higher than May's 0.1% gain, signaling that inflation pressures are lingering.
Despite the CPI data indicating some level of inflationary pressure, the report may give the Federal Reserve the flexibility to adopt a wait-and-see approach regarding interest rate cuts. The Fed may be cautious in making any sudden moves amid the growing uncertainties surrounding President Trump's tariffs on foreign imports, particularly how they may affect inflation in the U.S. This uncertainty has created an environment where the Fed's policy decisions remain data-dependent, with many analysts predicting that the central bank might not rush into further rate cuts until there's more clarity on inflation and trade policies.
European Markets
European stocks faced a broad decline, as the anticipation of weaker corporate earnings in the second quarter weighed heavily on investor sentiment. Analysts are forecasting a 0.7% drop in European corporate profits, further dampening the outlook for the region. The combination of disappointing earnings expectations and concerns about trade tensions added pressure to European shares, particularly in sectors like healthcare and financials, which saw notable declines.
Investor sentiment in Germany had risen more than expected in July. This increase in sentiment was somewhat encouraging, though it wasn't enough to offset broader concerns in the European markets. The primary focus for many European investors remains on potential developments in the US-EU trade negotiations, as any breakthrough (or lack thereof) could significantly influence the economic outlook for the region.
UK stocks also dropped as fears over the impact of tariffs resurfaced amid growing uncertainty over trade negotiations. The Bank of England (BoE) indicated that inflation still remains a challenge and a risk to the economy. UK stocks appear overbought, and are sitting near all time highs while economic data is generally weak, as investors look to reducing risk exposure, locking in profits.
Corporate News
Alphabet Inc & Brookfield Asset Management Ltd Google has entered into the world's largest corporate clean power pact for hydroelectricity, securing up to 3 gigawatts of U.S. hydropower through a deal with Brookfield Asset Management. The deal includes 20-year power purchase agreements worth $3 billion, supporting Google's energy-hungry data centers.
ASML Holding NV Investors are closely watching ASML's second-quarter earnings, hoping robust bookings will support the company's growth ambitions for 2026. The world's largest chip-making equipment supplier has not specified growth projections for 2026 but is optimistic about future prospects.
B2Gold Corp B2Gold plans to spend $740 million developing its Gramalote mine in Colombia. The project is expected to produce 227,000 ounces of gold per year for the first five years, with a total mine life of 11 years.
Campbell's Company: Jefferies has lowered the target price from $34 to $31, citing a decline in organic sales for fiscal year 2025.
CoreWeave Inc The AI cloud computing firm will invest up to $6 billion to build a new data center in Pennsylvania, boosting U.S. technological competitiveness. The project is expected to generate 600 construction jobs and 70 full-time technical positions.
DoorDash Inc: Jefferies has raised the target price from $235 to $250, driven by expectations of stronger profits from new delivery verticals and increased advertising.
Diageo PLC Diageo has filed a response to a lawsuit accusing the company of misleading U.S. consumers about the purity of certain tequila brands. Diageo called the claims 'outrageous and categorically false' and stated that its tequilas are made from 100% Blue Weber agave.
Geely Automobile Geely plans to acquire the remaining shares of Zeekr, an electric-vehicle maker, for $2.40 billion, offering $2.687 per share for the 892.7 million units it does not already own.
Huawei Analysts suggest President Trump could derail Nvidia's growth by tightening export curbs on chips and software, possibly making Nvidia's business forecast of $50 billion in sales vulnerable to Huawei's local rivals.
JPMorgan Chase & Co JPMorgan has created a new unit to offer alternative financing strategies for clients, aimed at tackling increasingly complex financial needs, according to an internal memo.
Lockheed Martin Corp Lockheed Martin delivered 72 F-35 jets to the U.S. government by May 1, after delays due to software improvements. A significant portion of funding for new production aircraft remains withheld, with funds being released incrementally into next year.
Nvidia Corp Nvidia is filing applications with the U.S. government to resume sales of its H20 AI chips to China. The company anticipates obtaining licenses soon and expects significant demand from Chinese firms for the chips.
Oracle Corp Oracle will invest $3 billion in AI and cloud infrastructure over the next five years in Germany and the Netherlands. The company plans to allocate $2 billion for Germany and $1 billion for the Netherlands to meet growing demand.
PepsiCo Inc Jefferies has lowered the target price for PepsiCo from $151 to $150, citing weaker-than-expected performance in the U.S. market and softer product demand.
Rio Tinto PLC Rio Tinto appointed Simon Trott, the head of its profitable iron ore unit, as its new CEO. Trott replaces Jakob Stausholm, who is stepping down after announcing his intention to leave in May.
Taiwan Semiconductor Manufacturing Co Ltd TSMC is expected to report a 52% increase in second-quarter profits, though its outlook may be impacted by U.S. tariffs and a strong Taiwan dollar. The company is expected to report a net profit of T$377.4 billion for the three months through June 30.
Tapestry Inc Tapestry will invest $15 million in eco-leather producer Gen Phoenix as part of its efforts to create more sustainable leather goods, helping its brand Coachtopia understand younger consumers' preferences.
Tesla Inc Tesla launched the Model Y in India, priced at $70,000, the highest price among major markets. This marks the company's long-awaited entry into India, where CEO Elon Musk once planned to build a factory but faced high import tariffs.