Your Portfolios in Brief
Founded in 1962, Jefferies Financial Group Inc. (JEF) is a key player in the financial services sector, specializing in investment banking, capital markets, and asset management.
________________________________________
Key Highlights in 2024
• Strong revenue growth: Quarterly revenue reached $1.96 billion, an increase of 63% compared to 2023, exceeding consensus estimates by 6.55%.
• Net income tripled: Fourth-quarter net income rose to $205.7 million, up 212%, compared to $65.6 million in the previous year.
• Record performance in investment banking: Segment revenue increased by 73%, reaching $986.8 million, driven by a 91% increase in advisory revenue for mergers and acquisitions ($596.7 million, a historical record).
• Capital market growth: Segment revenue grew by 34% to $651.7 million, supported by strong growth in equity activities (+49% to $410.8 million) and improved credit markets (+15% to $240.9 million).
• Increased dividends: Jefferies raised its quarterly dividend by 14%, to $0.40 per share, demonstrating the company’s confidence in its ability to generate sustainable cash flows.
________________________________________
Why it’s a Stock to Watch?
1. Resilience and Adaptation: Despite challenges posed by high interest rates and geopolitical uncertainties at the start of the year, Jefferies leveraged the recovery in transaction activities, marking a year of "normalization," according to its leadership.
2. Sustained Growth: Jefferies exceeded expectations in three of the last four quarters in terms of revenue and earnings. For fiscal year 2024, annual investment banking revenue reached $3.44 billion, the second-highest level in its history.
3. Strategic Positioning: The company continued hiring senior bankers despite economic slowdowns, strengthening its capacity to meet increased demand in 2025, particularly in IPOs and strategic mergers.
4. 2025 Outlook: With a more favourable economic environment and improving financial market conditions, Jefferies is well positioned to benefit from continued growth.
________________________________________
Conclusion
At Pratte Gestion de Portefeuilles, we are proud to count Jefferies among our strategic investments. Thanks to its agility, long-term vision, and ability to capitalize on changing market conditions, Jefferies has established itself as a key player in the financial sector. Its exceptional performance in 2024, marked by record growth in revenue and earnings, demonstrates its resilience and strategic positioning in a recovering environment.
Since the beginning of 2025, Jefferies’ stock has risen by 1.5%, outperforming the S&P 500, which has gained only 0.5% over the same period. This promising start to the year reflects investors’ confidence in the company’s solid fundamentals and its ability to capitalize on a favourable market environment.
As Jefferies continues to outperform the market, the outlook for 2025 appears bright. The recovery in mergers, acquisitions, and IPOs, coupled with a growth strategy focused on expansion and innovation, provides significant opportunities for the company. Its leadership remains optimistic, anticipating a year marked by an increase in new acquisitions and strengthened momentum in capital markets.
Market Brief
Monday
• Dow: The index declined by 0.06%, closing at 42,706.56 points.
• S&P 500: The broad index gained 0.55%, ending at 5,975.38 points.
• NASDAQ: The tech-heavy NASDAQ rose by 1.24%, closing at 19,864.98 points.
Banking Sector: Impact of the Fed Vice Chair’s Resignation
The resignation of the Fed Vice Chair, Michael Barr, boosted some banking stocks. Bank of America rose by 1.32%, Morgan Stanley by 2.14%, and Wells Fargo by 1.01%, reflecting positive investor sentiment following the announcement.
FuboTV and Disney Announce Strategic Partnership
FuboTV saw its stock skyrocket by 251.39% after announcing a major partnership with Disney. This deal ends a dispute between the two companies and creates a strategic synergy: Disney becomes the majority shareholder of Fubo with a 70% stake, while Fubo’s management team will oversee the new entity, integrating Hulu and Fubo’s live TV services. This alliance strengthens both companies’ positions in the streaming competitive market with a combined portfolio of sports and entertainment content designed to attract a diverse audience.
Nvidia: New Record Thanks to AI
Nvidia closed the session up 3.43%, reaching a new record of $149.43 per share. The stock benefited from continued enthusiasm for artificial intelligence technologies, consolidating its position as a sector leader. Nvidia’s performance was supported by exceptional financial results from Foxconn, a key partner in its semiconductor supply chain. Investors remain optimistic about Nvidia’s ability to sustain robust organic growth, driven by the growing adoption of AI in technology, automotive, and healthcare sectors. This momentum reflects increasing demand for its advanced solutions, particularly in graphics processors and data centres.
Stocks in Brief
• FuboTV (+251.39%): The stock surged after announcing a strategic partnership with Disney.
• Micron Technology (+10.40%): Strong gains driven by record results from Foxconn.
• Nvidia (+3.43%): New record at close, buoyed by enthusiasm for AI.
• Broadcom (+1.66%): The stock benefited from excitement in the semiconductor sector.
• AMD (+3.33%): Gained strength from the advanced technologies segment.
• Qualcomm (+1.28%): Followed the positive momentum in semiconductors.
• Meta (+4.23%): Continued to rise on expectations of increased advertising revenue.
• Apple (+0.67%): Modest gain but hit a record market capitalization during the session.
• U.S. Steel (+8.14%): Climbed after announcing legal action against the Biden administration.
• TSX: Down 73.75 points, closing at 24,999.79 points.
• Oil: Fell 0.54%, closing at $73.56 per barrel.
• Gold: Declined 0.27%, ending at $2,647.40 per ounce.
• Canadian dollar: Strengthened to 69.70 cents USD, compared to 69.24 cents USD last Friday.
Tuesday
• Dow: The index fell 0.42%, closing at 42,528.36 points.
• S&P 500: The broad index dropped 1.11%, ending at 5,909.03 points.
• NASDAQ Composite: The NASDAQ posted the largest drop, falling 1.89% to close at 19,489.68 points, following a sharp pullback in large-cap stocks.
Rising Bond Yields Weigh on Stocks
The release of a stronger-than-expected ISM Services Index signalled robust economic activity in December. As a result, 10-year Treasury yields climbed to 4.69%, hitting an intraday high of 4.699%. This spike fuelled concerns over persistent inflation, dampening expectations of a Fed interest rate cut this year.
Major Merger in Visual Content Sector
Shares of Getty Images surged by 24.12%, and Shutterstock jumped 14.81% following the announcement of their merger. This transaction will create a global leader in the visual content sector, with synergies expected to strengthen their market presence.
Healthcare: Moderna on the Rise
Moderna soared by 11.65%, driven by growing concerns over avian flu in the U.S. Authorities confirmed the first human death, increasing potential demand for vaccination solutions.
Stocks in Brief
• Nvidia (-6.22%): Pulled back after a series of record highs.
• Tesla (-4.06%): Hit by a NHTSA investigation and a downgrade.
• Meta (-1.95%): Dropped after adjustments to its content moderation policy.
• Getty Images (+24.12%): Strong rise due to its merger with Shutterstock.
• Shutterstock (+14.81%): Boosted by the creation of a visual content giant.
• Moderna (+11.65%): Gained on avian flu concerns.
• Apple (-1.14%), Microsoft (-1.28%), Amazon (-2.42%): Declines among mega-cap tech stocks.
• S&P/TSX (Toronto): Fell by 69.90 points, closing at 24,929.89 points, dragged down by tech losses.
• Canadian dollar: Rose to 69.74 cents USD, compared to 69.70 cents USD on Friday.
• Oil: Rose by 69 cents, reaching $74.25 per barrel.
• Natural Gas: Fell by 22 cents, to $3.45 per million BTU.
• Gold: Increased by $18.00 USD, ending at $2,665.40 per ounce.
• Copper: Climbed 4 cents, to $4.20 per pound.
Wednesday
• Dow: Up 0.25%, closing at 42,635.20 points.
• S&P 500: Gained 0.16%, ending at 5,918.25 points.
• NASDAQ Composite: Slight decline of 0.06%, closing at 19,478.88 points.
Fed Minutes Cool Rate-Cut Expectations
The minutes from the Fed’s December meeting revealed that most participants perceived increased risks related to inflation. This perspective reduced expectations of a swift rate-cut cycle in 2025. The 10-year Treasury yield briefly surpassed 4.7%, a level not seen since April. These concerns contributed to cautious investor sentiment despite still robust economic activity.
Ebay Surges Thanks to Meta
Ebay’s stock jumped 9.86% following the announcement of a strategic partnership with Meta. Ebay’s listings will now be integrated into Facebook Marketplace, allowing users to browse and complete transactions via Ebay’s platform. This pilot program will launch in Germany, France, and the United States, supporting greater diversification for both companies.
Stocks In Brief
• Ebay (+9.86%): Significant rise thanks to a partnership with Meta.
• Palantir (-2.5%): Third consecutive day of decline after a 340% gain in 2024.
• AMD (-4.3%): Hit by a downgrade.
• Rigetti (-45.41%) and IonQ (-39%): Sharp decline in the quantum computing sector.
• Constellation Energy (-4.61%): Fell due to acquisition rumours.
• TSX: The Toronto Stock Exchange gained 0.49%, buoyed by the strength of tech stocks.
• Oil: Fell $0.93, to $73.32 per barrel.
• Natural Gas: Rose $0.20, reaching $3.65 per million BTU.
• Gold: Increased by $7.00, closing at $2,672.40 per ounce.
• Copper: Rose 6 cents, closing at $4.26 per pound.
Thursday
The S&P/TSX Composite Index closed with a gain of 21.68 points, ending at 25,073.36.
Canadian markets remained quiet as trading in the U.S. was halted on Thursday for a national day of mourning in honor of former President Jimmy Carter.
Friday
• Dow: Down 0.8% (336 points).
• S&P 500: Dropped 0.8%.
• NASDAQ: Fell 1%.
December Jobs Data: A Market Surprise
The December jobs report revealed payroll growth of 256,000, far exceeding economists’ expectations of 155,000. The unemployment rate also dropped from 4.2% to 4.1%, defying projections of stability.
This strong labour market performance drove the 10-year Treasury yield to its highest level since late 2023. These data bolstered expectations that the Fed will maintain its benchmark rates unchanged at its next meeting and possibly beyond. The probability of a March rate cut dropped to 25%, from 41% the previous day, according to the CME FedWatch Tool.
Canadian Economy Adds 90,900 Jobs in December, Unemployment Falls
In December, the Canadian job market delivered remarkable results, with the unemployment rate dropping to 6.7%, from 6.8% in November. In Quebec, this trend was even more pronounced, with a decline from 5.9% to 5.6%, according to Statistics Canada. This improvement was accompanied by a net gain of 91,000 jobs across the country, far exceeding analysts’ expectations.
Key Highlights of Employment in December 2024
• Massive Job Creation: The Canadian economy generated 91,000 jobs in December, building on the addition of 51,000 jobs in November. In total, 413,000 jobs were created in 2024, a 2.1% increase compared to 2023.
• Key Sectors: Most of the jobs created in 2024 came from the education, healthcare, and social assistance sectors. Together, these sectors accounted for half of the year’s job growth.
• Wage Growth: Average hourly wage growth slowed to 3.8% in December, compared to 4.1% in November. Although down from the peak of 5.8% in November 2022, this growth remains positive.
Regions and Sectors to Watch
• Montreal and Toronto: Unemployment rates fell in Canada’s two largest cities. In Montreal, the rate decreased from 6.9% in November to 6.4% in December. In Toronto, it declined from 9.2% to 8.6%.
• At-Risk Industries: Approximately 8.8% of Canadian jobs depend on exports to the United States. The most exposed sectors include pipeline transportation, metal processing, and manufacturing of transportation equipment.
o Most Vulnerable Regions: Wood Buffalo-Cold Lake in Alberta (22.8%) and Centre-du-Québec (17.8%) have the highest share of jobs tied to U.S. demand.
• Export-Linked Wages: Jobs tied to U.S. exports offered wages 6.5% higher than other industries, with an average hourly wage of $37.24.
Economic Outlook and Challenges
The Canadian labour market remains robust despite a challenging economic environment marked by geopolitical uncertainties and the threat of U.S. tariffs. However, regions and industries dependent on U.S. exports will need to closely monitor trade policies, especially in key sectors like energy and manufacturing.
The notable improvement in employment, coupled with slower population growth, offers hope for policymakers. However, risks persist, particularly for regions and sectors heavily reliant on U.S. demand. Economic and trade policies in the coming months will be crucial in maintaining this positive momentum.
Conclusion
As we begin a new year, we want to take a moment to thank you for your trust throughout 2024. Your feedback and support inspire us to serve you better. If you have a few moments, please consider sharing your experience on our Google Business page. This will greatly help us continue to grow. Thank you again, and we wish you an excellent 2025!
