BoFA says S&P 500 has peaked for 2024
The S&P 500 Index (VOO-NASQ) has likely logged all the gains it will make this year, but the benchmark still presents ample opportunities for investors, according to comments carried by Bloomberg from Bank of America Corp (BAC-NASQ). The firm reiterated its year-end forecast for the US stock gauge of 5,400, roughly in line with where it is now after gaining around 15% in 2024. While neutral on the index overall, BofA’s Savita Subramanian says there’s potential for strong returns in a few areas: among dividend payers, “old school” capital-expenditure beneficiaries like infrastructure, construction and manufacturing stocks, and other themes that don’t revolve around artificial intelligence.
Stocks waver in countdown to Fed rates, tech results
Following a big rotation that drove the Nasdaq 100 to the brink of a correction, the tech-heavy benchmark started the new week on the front foot. Results from Microsoft Corp (MSFT-NASQ), Meta Platforms Inc. (META-NASQ), Apple Inc. (AAPL-NASQ) and Amazon.com Inc. (AMZN-NASQ) will be key after an underwhelming start of the mega-cap reporting season. Federal Reserve officials are on the verge of lowering borrowing costs, with expectations for a September cut as the risks grow of imperilling a solid but moderating job market.
UK fiscal direction in focus
Bloomberg reports that UK Chancellor Rachel Reeves signalled that she may have to raise taxes in the October budget and announced cuts to some government spending.
Mining M&A alert: BHP, Lundin buys Canadian copper miner Filo
BHP Group Ltd. (BHG-JSE) announced a joint venture with Canada’s Lundin Mining Corp. to buy copper miner Filo Corp., gaining access to projects in Chile and Argentina. Bloomberg reports that the world’s biggest miner will take a 50% stake in Filo, which owns the Filo del Sol mine in Chile. It will also separately acquire 50% of Lundin’s Josemaria operation in Argentina. BHP has been looking to increase its exposure to copper, a metal vital to the energy transition. CE Mike Henry has said copper demand will double over the next two decades and sees the metal as a key pillar to the company’s growth plans. The company’s total cash payment for the proposed transactions is expected to be about $2.1 billion. The total acquisition price for Filo is around C$4.1 billion ($3 billion), or about C$33 per share. That compares with Canadian-listed Filo’s closing share price of C$29.42 on Monday. The JV will create a long-term partnership between the two miners to develop an emerging copper district with world-class potential, BHP said.
Walmart details global growth plans
Walmart (WMT-NASQ) seeks to increase its international revenues from $100bn in 2023 to $200bn by 2028. Judith McKenna, CEO of Walmart International, made the statement at the retailer’s shareholder’s event in 2023, admitting it was a bold prediction but said all of the 19 countries in the international portfolio have plans in place to make it happen. In a Reuters report, McKenna said she expects Walmart’s growth to come from implementing the omni-channel strategy globally, scaling existing and new marketplaces in the 19 foreign countries in which it operates, and building a complementary business “ecosystem” like the one it has in Mexico. Besides selling everyday products through brick-and-mortar stores in Mexico, Walmart offers financial services through its Cashi app, telecom services through BAIT and has now started offering healthcare services in the country. Questions remain whether Walmart will organically grow its revenues from South Africa to a meaningful number within its international operations.
Coal and diamonds weigh on Anglo
Anglo American (AALL-TRQX) reported underlying earnings of $4.98 billion in the first half of 2024, a 3% drop from a year earlier. The company pointed to setbacks at its coal and diamond businesses, as well as an expected $1.6 billion write-down at a fertiliser mine in the UK, as it announced first-half earnings results.
TotalEnergies exits South African offshore gas finds
TotalEnergies SE (TTEP-TRQX) has quit its gas-condensate discoveries off the tip of South Africa. The company exited the Brulpadda and Luiperd finds because “it appeared to be too challenging to economically develop and monetize these gas discoveries for the South African market,” TotalEnergies said in a statement. In response, South Africa’s Department of Mineral Resources and Energy (DMRE) released a statement stating it is “confident that a suitable investor will come on board and be able to monetise the gas discoveries.”
Sector focus: UK retail
According to comments carried by Reuters from the Confederation of British Industry (CBI), British retailers suffered another bad month in July and expected further weakness in August as poor weather and generally weak trading conditions continued to hamper demand. The CBI said its monthly retail sales balance sank to -43 in July from June’s reading of -24, its lowest since April.
Stock focus: British American Tobacco
British American Tobacco (BATSL-TRQX) shares hit nine-month high after rising 5.4% after the cigarette maker maintained its guidance for 2024, which is a reassuring move following a disappointing update in December. The company also said it expects to see an acceleration in its performance in the second half of the year as it rolls out product innovations. However, the company warned that new products are unlikely to meet its £5 billion sales target in 2025.
