Market Analysis: May 21st, 2025
Canadian Markets: Canada's TSX declined, pulling back from record highs , as investors booked profits to mitigate risks amid renewed trade tensions and concerns about slowing global growth. As the markets head into the typically quieter summer months, lower trading volumes may increase volatility. In addition, growing pessimism among economists — with several now forecasting that Canada is heading into a recession — has weighed on investor sentiment. Weakening consumer spending, a cooling housing market, and persistent inflationary pressures are contributing to this negative outlook which are reflecting the current aversion to risk, the despite strength from rising oil and gold.
US Markets: U.S. equity markets traded lower, as Treasury yields surged, reflecting heightened fiscal concerns. Investors are watching Washington's political gridlock, particularly with the ongoing standoff over President Donald Trump's proposed tax-cut legislation, which is reigniting debates about deficit spending. Markets also are addressing the re-escalation in tensions between the U.S. and China over the semiconductor trade, further stoking fears of a renewed 'chip war' that could hurt technology supply chains and global growth.
European Markets: European stock markets traded the day mixed, while some regional indices managed modest gains, as the broader market was dragged down by sharp declines in key stocks like JD Sports and Julius Baer, both of which posted disappointing updates. The performance of these heavyweight stocks overshadowed otherwise stable earnings and economic data across the eurozone.
UK equities rose slightly, despite an unexpected move higher in inflation. Consumer prices in the UK climbed more sharply than forecast in April, driven by a surge in energy and transport costs. The headline inflation rate surpassed 3%, raising fresh concerns for the Bank of England as it considers its next steps on interest rates. The persistence of high inflation, even as economic growth remains modest, complicates the central bank's efforts to bring price pressures under control without stifling demand.
Stock News
Alphabet Inc
Volvo Cars has become the lead development partner for Google's Android Automotive software. This deeper collaboration will allow Volvo customers earlier access to new features, giving it a competitive edge in user experience and software integration.
Apple Inc
Epic Games' Fortnite has returned to Apple's App Store in the U.S. after nearly five years, following a court ruling that found Apple violated antitrust regulations. This marks a significant win for Epic Games in its legal battle with Apple over app payment practices.
Brookfield Asset Management
Spain's Bankinter has submitted a binding bid for Livensa, Brookfield's student housing platform, valued at around €1.2 billion. CPPIB and KKR are also reported to be interested. Brookfield has not commented publicly on the deal.
Canada's Big Banks
Four of the six largest Canadian banks are expected to have each set aside over C$1 billion in Q2 for loan loss provisions, preparing for potential defaults amid economic uncertainty and trade-related risks.
Comcast Corp & Walt Disney Co
Comcast is set to open its $7 billion 'Epic Universe' theme park in Central Florida, expanding Universal Orlando Resort. This major addition challenges Disney World's dominance and includes five themed worlds based on well-known franchises.
ConocoPhillips
Guangdong Pearl River Investment Management Group signed a 15-year LNG supply agreement with ConocoPhillips. Although volumes weren't disclosed, the deal supports China's growing LNG infrastructure and energy needs.
DXC Technology Co
JPMorgan cut its price target to $18 from $22, citing lower free cash flow expectations for FY27 and FY28.
Keysight Technologies
Keysight exceeded Wall Street estimates for Q2 revenue and profit, driven by strong sales in its communications segment. Shares rose 5% after-hours, and the company reported EPS of $1.70 vs. an expected $1.65.
Kraft Heinz Co
Kraft is exploring strategic deals amid falling demand for its premium snack and meal products. Two Berkshire Hathaway executives are exiting the board as Buffett's firm withdraws board participation. Kraft has also lowered its annual sales and profit forecasts.
Lowe's Companies Inc
Lowe's reported a smaller-than-expected 1.7% decline in same-store sales and maintained its 2025 outlook. Despite weak big-ticket sales due to higher interest rates, maintenance spending helped cushion the decline.
Medtronic PLC
Medtronic plans to spin off its diabetes business into a separate company within 18 months. The division, with $2.5 billion in annual sales, will be based in California and led by current diabetes head Que Dallara.
Myriad Genetics Inc
Scotiabank downgraded the stock to 'Sector Perform' from 'Sector Outperform' and cut the price target to $6 from $20, citing a need for clearer strategic direction under new leadership.
Nvidia Corp
CEO Jensen Huang criticized U.S. export controls on AI chips to China as a failure, saying they have cost American firms billions and were based on flawed assumptions. He supports regulatory adjustments by the Trump administration.
Palo Alto Networks
Palo Alto raised its Q4 revenue forecast, driven by increased demand for cybersecurity solutions amid rising digital threats. Analysts see the sector as resilient and poised to benefit from increased AI adoption.
Target Corp
Target slashed its annual forecast after reporting a sharp drop in same-store sales. Executives cited weak consumer confidence and trade uncertainty, including potential tariff impacts from U.S.-China tensions.
Tesla Inc
Tesla will begin testing its robotaxi fleet in Austin, TX by June, starting with 10 vehicles and expanding to 1,000. The rollout comes amid regulatory scrutiny and declining global sales, as well as growing backlash toward Elon Musk's political ties.
Viking Holdings Ltd
JPMorgan raised its price target to $61 from $58 after Viking beat Q1 adjusted EBITDA estimates.
Wolfspeed Inc
Wolfspeed is reportedly preparing for Chapter 11 bankruptcy due to heavy debt and sluggish demand in industrial and auto sectors. Shares fell 57% in extended trading. The firm is seeking creditor support after failed restructuring talks.
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