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North America Stock Markets

North American Stock Markets

Source: Bloomberg
Strong economic and earnings data, coupled with a general absence of inflation concerns, pushed major US indices higher.

North American Markets

• On July 25 Facebook, Inc. held a discouraging earnings call which revealed a drop in daily active users, that new European privacy laws had cut into ad revenue, and that the shift from reading the Instagram stream to reading Instagram stories – whatever that means – also depressed revenue. Facebook’s shares fell 19.0 percent on the news, shredded $119.4 billion in market cap, and claimed the dubious honour of having the largest stock-market rout in American history.

• On August 24 Tesla, Inc.’s CEO Elon Musk announced that he was no longer seeking to take the electric-car company private. The stock fell to under $300 per share coming off the $380 per-share high that occurred on the day Musk first announced the go-private effort. Musk’s actions eventually caught the attention of the Securities and Exchange Commission (SEC) which homed in on his assertion that he had “funding secured” to take the company private. On September 29 Musk stepped down as Chairman of the company and agreed to pay a fine in a deal with the SEC.

• On August 27 the US and Mexico agreed a new trade deal to replace the North American Free Trade Agreement (NAFTA). The old deal allowed Mexico, Canada, and the US to trade several products without tariffs with each other. The new deal aims to address the US trade deficit. Stock prices mostly climbed in response to the news, in particular shares of automakers like General Motors Company and Ford Motor Company that rose 4.8 percent and 3.2 percent, respectively.

• On August 28 luxury jewelry retailer Tiffany & Company beat analyst estimates. Tiffany’s iconic turquoise boxes flew off the shelves in Second Quarter 2018 and sales rose 12 percent relative to a year ago with profit increasing by 26 percent. Sales in Asia grew by almost a third more than the same time in 2017 with local customers in greater China contributing to the majority of the uplift. The company also increased its gross margin. Tiffany’s shares rose 1.0 percent on the announcement.

• On September 19 Cineplex Inc, the Canadian movie theatre company, signed an agreement with immersive cinema company CJ 4DPLEX Co. Ltd. to bring 4DX technology to 13 cinemas outside Toronto for the first time. The deal will bring motion, wind, fog, rain, lightening, snow, bubbles, vibration, and scent features to theatre seats in markets outside Toronto. Cineplex rose 1.3 percent on the day.

• On September 24 Canadian gold miner Barrick Gold Corporation agreed to buy Africa-focused rival Randgold Resources in a deal worth $18.3 billion. After the merger Barrick’s shareholders will own 66 percent of the new company while Randgold shareholders will own the rest. The new company will be the world’s biggest gold miner, producing more than six million ounces of gold per year. On the day, shares of Barrick Gold and Randgold rose by 5.4 percent and 6.6 percent, respectively.