Micron, General Mills, Jabil, and more set to report earnings Wednesday

Investing.com -- As investors position their portfolios for 2026, RBC Capital Markets has identified standout performers in the diversified financials sector. Their analysis highlights companies with strong growth trajectories, attractive valuations, and compelling business models that are well-positioned to outperform in the coming year.

RBC’s top selections showcase a mix of asset management, fleet management, and insurance businesses that offer distinct investment opportunities. Each company presents unique strengths in their respective subsectors while demonstrating solid fundamentals that support potential share price appreciation.

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Brookfield Despite re-rating in 2025, RBC believes the market still significantly discounts Brookfield’s business despite strong tailwinds into 2026, particularly regarding carried interest realizations. At current prices, investors are effectively paying just 1.0x P/B for Brookfield’s non-real estate private investments. The company expects $25 billion in realized carried interest, with $12 billion anticipated within five years. Carried interest is projected to grow at a 45% CAGR through 2030. Additionally, Brookfield Wealth Solutions represents a major growth lever, with insurance assets potentially expanding from $139 billion today to approximately $350 billion within five years, contributing about one-third of the growth needed to reach the targeted 25% distributable earnings CAGR.

In recent news, Brookfield Corporation reported third-quarter 2025 earnings per share of $0.56, slightly missing forecasts, while revenue met expectations. The company is also part of a joint venture planning an $11 billion investment in AI data capacity in India, and Keefe, Bruyette & Woods reiterated its Outperform rating on the company.

Element Fleet Management Element continues to execute on its capital-light strategy, with services and syndication mix gains supporting structurally higher ROE and operating margin expansion. RBC highlights EFN’s durable growth profile with increasing operating leverage as the company gains market share across self-managed fleets. Strategic advisory wins and strong renewal activity underpin this growth trajectory. Capital return remains a core pillar, with strong free cash flow generation supporting a roughly 30% dividend payout, ongoing NCIB activity, and flexibility for M&A or additional buybacks. RBC’s C$47 price target is based on 23x blended 2026E/2027E operating EPS.

Fairfax Financial RBC expects Fairfax’s valuation discount versus peers to narrow as the company continues to deliver solid operating results. Despite consistent mid-90s combined ratios, stronger investment income momentum, low double-digit BVPS growth, and approximately mid-teens ROE, FFH trades at a P/B discount to peers. RBC believes the recent inclusion in the S&P/TSX 60 Index will drive increasing investor interest in 2026, noting that FFH is now the second P&C name in the index (joining IFC) and its $58 billion market cap exceeds IFC’s $50 billion. RBC’s US$2,200 target is based on 1.5x forward P/B, still below peers despite improving fundamentals.

Fairfax Financial Holdings announced strong second-quarter 2025 results, with net earnings rising to $1.4 billion from $915 million in the same period of the prior year.\\

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Investing.com -- Spotify shares fell 0.7% on Tuesday after the U.S. Trade Representative warned of potential retaliatory measures against the European Union.

The U.S. Trade Representative stated that if the EU and its member states continue to restrict the competitiveness of U.S. digital service providers, the United States will "use every tool available to counter these measures."

The trade official specifically mentioned several European companies that have benefited from market access in the U.S., including Spotify, Accenture, Amadeus, Capgemini, DHL, Mistral, Publicis, SAP, and Siemens.

The statement indicated that U.S. law permits "the assessment of fees or restrictions on foreign services, among other actions" should responsive measures become necessary.

This development comes amid ongoing tensions as the EU has imposed various fines on American technology companies including X, Amazon, Google, and Meta over alleged violations of the bloc’s Digital Services Act.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Investing.com -- U.S. stocks slipped lower Tuesday after investors digested mixed labor market data, seeking guidance about the Federal Reserve’s interest rate path in the new year. 

At 09:32 ET (14:32 GMT), the Dow Jones Industrial Average fell 40 points, or 0.1%, the S&P 500 index dropped 8 points, or 0.1%, and the NASDAQ Composite slipped 30 points, or 0.1%.  

Unemployment rate jumped in November 

The U.S. central bank cut interest rates by 25 basis points last week, citing a desire to prop up faltering U.S. employment during a time when price pressures appear to be stable, albeit elevated.

With this in mind, nonfarm payrolls rose 64,000 in November, topping expectations of 50,000 and above a loss of 105,000 roles in October, data from the Bureau of Labor Statistics showed.

Meanwhile, the jobless rate in November crept up to 4.6%, compared to economists’ estimates of 4.5%. It was the highest level for the reading in more than four years, underscoring recent worries around a slowdown in the U.S. labor market.

"The knee-jerk reaction is that the jobs data are a (modest) positive for equities as the release should keep Fed policy on a dovish trajectory without materially adding to growth worries," said analysts at Vital Knowledge, in a note.

That said, "of course, investors will take all these numbers with a grain of salt given ongoing worries about accuracy (worries that Powell exacerbated during last week’s press conference)."

These prints come days before CPI data for November, which will also be closely scrutinized by markets.

Labor strength and inflation are the Federal Reserve’s two main considerations for cutting interest rates, with the central bank having flagged a data-driven approach to further easing. 

Elsewhere, U.S. retail sales were unexpectedly flat in October, following a downwardly revised 0.1% gain in September. 

Markets are also focused on who will become the Fed’s next Chair, with reports stating that U.S. President Donald Trump had narrowed his shortlist for Jerome Powell’s successor to former Fed Governor Kevin Warsh and National Economic Council Director Kevin Hassett. 

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Lennar headlines earnings list 

The earnings season is gradually coming to a close, but results from homebuilder Lennar Corporation (NYSE:LEN) are due after the close of U.S. markets.

The firm posted a 46% slip in profit in the third quarter, weighed down by sticky inflation which has dented the affordability of the American housing market. 

Elsewhere, major exchange Nasdaq is seeking approval from U.S. securities authorities to extend trading hours on its stock venues to 23 hours during the work week, according to Bloomberg News.

In a filing with the Securities and Exchange Commission on Monday, Nasdaq asked for permission to tack on an additional trading session which would last from 9 p.m. to 4 a.m. ET.

Crude retreats further 

Oil prices slumped as raised prospects for a Russia-Ukraine peace deal lifted the potential of an easing of sanctions.

Brent futures last dropped 2.1% to $59.31 a barrel, and U.S. West Texas Intermediate crude futures fell 2.1% to $55.48 a barrel.

U.S. officials have flagged some progress in the Russia-Ukraine peace talks, with Kyiv offering to drop its aspirations to join the NATO military alliance, a major point of contention for Russia, while Washington offered Ukraine security guarantees.

But a deal on territorial concessions, a highly sensitive topic for Ukraine, remained elusive.

A peace deal could result in U.S. sanctions on Russian oil companies being lifted, adding to an already well supplied market.

Ambar Warrick contributed to his article