Markets today: Global stocks recover from AI-led bruising; central banks in focus

12/18/25 07:32

Global crude surplus means lower prices in 2026

– Scott Barlow

Soft crude prices will remain in 2026, says BofA Securities commodity and derivatives strategist Francisco Blanch,

“A global projected surplus of 2 million barrels per day means that crude oil prices should average substantially less in 2026 than they did in 2025, but the scale of the price drop will determine how low U.S. shale output goes, in our view. Heading into next year, we remain only somewhat bearish on prices despite the large projected surplus, as we do not believe it is in OPEC’s self-interest to drive Brent below $50/bbl. Thus, while we see rising inventories and Brent averaging about $60/bbl next year compared to almost $69/bbl this year, we do not see a major crash unless conditions change. Similarly, we project WTI crude oil prices to average $57/bbl compared to $65/bbl this year. Given this price deck, US shale oil production may contract by 70 thousand b/d or 1 per cent year-over-year in 2026. What factors could lead to a more substantial drop in US shale output? We see mainly three downside oil price risks: peace in Ukraine, a pro-market government in Venezuela, and a worsening economic outlook.”

12/18/25 07:30

Bank of England lowers rates after tight vote but signals caution about further cuts

– Reuters

The Bank of England cut interest rates on Thursday after a narrow vote by policymakers but it signalled that the already gradual pace of lowering borrowing costs might slow further.

After a sharp drop in inflation in data this week and a new forecast from BoE staff that growth will stagnate in late 2025, five Monetary Policy Committee members voted to lower the BoE’s benchmark rate for the fourth time in 2025 to 3.75 per cent from 4.0 per cent.

The four other members supported no change as they worried about the potential for Britain inflation’s rate – still the highest among the Group of Seven economies – to remain too high.

Governor Andrew Bailey changed his view and voted for a cut, tipping the balance on the committee.

“We still think rates are on a gradual path downward,” Bailey said in a statement. “But with every cut we make, how much further we go becomes a closer call.”

UK equities dipped, leaving both the blue-chip FTSE 100 and the mid-cap FTSE 250 flat on the day.

12/18/25 07:18

Oil prices steady as market assesses reports of possible U.S. sanctions on Russia, Venezuela blockade

– Reuters

Oil prices steadied on Thursday as investors assessed the likelihood of further U.S. sanctions against Russia and the supply risks posed by a blockade of Venezuelan oil tankers.

Brent crude dropped 1 US cent to US$59.67 per barrel at 6:33 a.m. ET. U.S. West Texas Intermediate crude was up 5 US cents at US$55.99 per barrel.

U.S. intentions to impose more sanctions against Russia and its threatened blockade of tankers under sanctions and carrying Venezuelan oil pushed prices higher, PVM analyst John Evans said.

On Wednesday, Bloomberg reported that the U.S. is preparing another round of sanctions on Russia’s energy sector in the event Moscow does not agree to a peace deal with Ukraine, citing people familiar with the matter. A White House official told Reuters President Donald Trump had not made any decisions on Russian sanctions.

Further measures targeting Russian oil could pose an even bigger supply risk to the market than Trump’s announcement on Tuesday that the U.S. would blockade tankers under sanctions entering and leaving Venezuela, ING analysts said in a note.

The European Union on Thursday imposed sanctions on 41 more ships in Russia’s shadow fleet, taking the total of designated vessels to almost 600.

Meanwhile, Britain imposed sanctions on 24 individuals and entities as part of its Russia sanctions regime, including on Russian oil companies Tatneft and Russneft, a government notice showed on Thursday.

12/18/25 07:02

Thursday’s analyst upgrades and downgrades

– David Leeder

National Bank Financial analyst Gabriel Dechaine thinks predicts earnings per share revisions will be the “primary driver” of Canadian banks of 2026 with the sector currently trading at 13.3 times forward EPS, which is a near record level.

“In terms of positioning for EPS revision, we believe a combination of factors is optimal: 1) a relatively lower bar in 2026 for the Capital Markets business, via a relatively lower contribution to fiscal 2025 consolidated PTPP growth; and 2) relatively lower consolidated revenue growth forecasts in 2025,” he said. “We acknowledge that the former could beget the latter.”

• Read more: Thursday’s analyst upgrades and downgrades
• Companies mentioned include: Alaris Equity, Aya Gold & Silver, BMO, Blackline Safety, CIBC, CN Rail, Canadian Pacific KC, Computer Modelling Group, EQB, Manulife, Premium Brands, RBC, Scotia Bank, Sun Life, TD Bank, Tecsys, Trisura Group

12/18/25 06:36

Lululemon surges as Elliott takes a US$1-billion stake

– Reuters

Activist investor Elliott Management has amassed a stake of more than US$1-billion in Vancouver-based Lululemon Athletica (LULU-Q) and is lining up a potential CEO candidate as it pushes to revive the struggling athletic apparel retailer, a source told Reuters on Wednesday.

Elliott has been working closely for months with veteran retail executive Jane Nielsen, former chief financial officer and chief operations officer at Ralph Lauren (RL-N), and views her as a potential CEO candidate, the source added.

The hedge fund is now one of Lululemon’s biggest investors, with the move coming amid a busy year for Elliott that already includes a recent investment in PepsiCo and an earlier proxy fight at Phillips 66.

The Wall Street Journal first reported the stake. Elliott and Lululemon did not immediately respond to Reuters’ requests for comment.

Shares of Lululemon were up nearly 5 per cent at US$217.23 in premarket trading on Thursday.

Last week, Lululemon said CEO Calvin McDonald would step down in January after seven years in the role, without naming a successor. Its share price rose after news of McDonald’s impending departure but has dropped about 60 per cent from its peak two years ago.

12/18/25 05:32

Micron surges on upbeat profit forecast as chip prices soar

– Reuters

Micron Technology’s (MU-Q) shares rose 9 per cent in premarket trading on Thursday after the U.S. chipmaker delivered an outsized quarterly profit forecast, underscoring its leadership in the high-bandwidth memory chips market as prices surge.

Micron is one of only three major suppliers of high-bandwidth memory chips, alongside Samsung and South Korea’s SK Hynix. The chips are pivotal for training and deploying generative AI models.

The company forecast second-quarter adjusted profit at nearly double Wall Street expectations, underscoring how Micron is capitalizing on a global supply crunch for memory chips amid booming demand from data centres, propelling its shares higher by about 168 per cent so far this year.

In a conference call with investors, Micron CEO Sanjay Mehrotra said he expects memory markets to remain tight past 2026 and that in the medium term, Micron expects to meet only half to two-thirds of demand from several key customers.

Micron’s chief business officer declined to specify which customers would not receive the chips they sought.

“With supply tightness at unprecedented levels, MU is having to strike a fine balance between allocating wafer capacity to high-value bits while also providing adequate supply of less value-added bits to key strategic customers,” J.P. Morgan analysts said in a note.

Shares of chipmakers AMD (AMD-Q) and Nvidia (NVDA-Q) rose nearly 1 per cent each in premarket trade.

12/18/25 05:14

Before the Bell: What every Canadian investor needs to know today

– S.R. Slobodian

Global markets climbed in cautious trading ahead of European central bank interest rate announcements and crucial U.S. inflation data.

Wall Street futures were in positive territory after major U.S. markets closed lower yesterday as AI spending jitters weighed on tech stocks.

TSX futures edged lower after Canada’s main stock market closed down yesterday.

In Canada, investors are getting results from Transat AT Inc. and BlackBerry Ltd.

On Wall Street, markets are watching earnings from Accenture PLC, Cintas Corp., FedEx Corp. and Nike Inc.

“Softer [U.S. inflation] figures should keep [Federal Reserve rate] cut bets alive, supporting equities and bonds and weighing on the dollar, while stronger-than-expected data would threaten dovish Fed expectations, weighing on equities and bonds and boosting the dollar,” Ipek Ozkardeskaya, senior analyst at Swissquote, wrote in a note.

Overseas, the pan-European STOXX 600 was up 0.28 per cent in morning trading. Britain’s FTSE 100 rose 0.32 per cent, Germany’s DAX advanced 0.19 per cent and France’s CAC 40 gained 0.36 per cent.

In Asia, Japan’s Nikkei closed 1.03 per cent lower, while Hong Kong’s Hang Seng edged up 0.12 per cent.

12/18/25 05:14

Stocks recover from AI-led bruising; central banks in focus

– Reuters

Global shares crept higher on Thursday, after the tech sector got hit by renewed concern over AI spending, and investors prepared for a series of central bank meetings that will probably reflect the divergence in worldwide monetary policy.

Geopolitical tensions are roiling commodities markets. Oil prices extended a rebound from five-year lows after President Donald Trump ordered a “blockade” of all sanctioned oil tankers entering and leaving Venezuela. Silver hit a new record that helped pull up gold.

Sterling fell for a second day, after an unexpected drop in UK inflation on Wednesday all but guaranteed a rate cut from the Bank of England later on Thursday.

The European Central Bank also delivers its policy decision on Thursday and is widely expected to leave rates unchanged, while traders expect Japan to raise rates on Friday but are less certain about the pace of tightening next year.

Shares in Europe rose broadly, lifting the STOXX 600 by 0.1 per cent, while U.S. stock futures rose 0.3-0.6 per cent, suggesting there may be some respite for the benchmark indexes after Wednesday’s wash-out.

Concern over record AI spending resurfaced after Oracle announced an equity deal to support a data centre project would not include a key partner, Blue Owl Capital. Its shares tumbled 5.4 per cent, meaning they have now lost 50 per cent of their value since mid-September, when a deal with OpenAI sparked a 35 per cent one-day rise.

12/18/25 04:30

Wednesday markets recap: Stocks fall as AI funding jitters drag tech stocks

– Reuters, Globe staff

Major North American indexes closed lower on Wednesday, with the S&P 500 and the tech-heavy Nasdaq sinking to three-week lows as nagging worries about the artificial intelligence trade weighed on technology stocks.

Oracle ORCL-N dropped 5.4 per cent after a report said the cloud company’s largest data-centre partner Blue Owl Capital will not back a US$10-billion deal for its next facility. Amazon.com AMZN-Q fell 0.6 per cent after reports said the company is in talks to invest about US$10-billion in ChatGPT maker OpenAI.

Worries about the broader technology sector taking on more debt to develop artificial intelligence have discouraged risk-taking lately.

AI bellwether Nvidia NVDA-Q fell 3.8 per cent and chipmaker Broadcom AVGO-Q dropped 4.5 per cent, sending a broader chips index down 3.9 per cent.

The Dow Jones Industrial Average fell 228.29 points, or 0.47 per cent, to 47,885.97. The S&P 500 lost 78.83 points, or 1.16 per cent, to 6,721.43. The Nasdaq Composite lost 418.14 points, or 1.81 per cent, to 22,693.32.

Alphabet GOOGL-Q shares fell 3.2 per cent after a Reuters report said its Google unit is taking on a new initiative to erode Nvidia’s software advantage, and working with Meta META-Q to do so.

In Toronto, the S&P/TSX Composite index closed down 0.04 per cent to 31,250.02 points, continuing its four-day streak of losses.