Daily market review

United States

Risk-on resumed Wednesday as markets focused on the policy response to the pandemic, amid hopes that new cases are peaking, and recovery is coming. The Dow industrials rose 3.4 percent, the S&P 500 gained 3.4 percent, and the NASDAQ gained 2.6 percent.

Stocks outperforming included several sectors that have been beaten down in the virus selloff and are now still considered bargains. Gains were across the board, with real estate the best, followed by energy, materials, and financials, while consumer staples, communications, and tech lagged. Oil prices popped up again, and energy stocks improved, amid reports of oil output cuts stemming from the OPEC+ gathering Thursday.

In company news, Planet Fitness, the budget gym chain, rose 14 percent, and Twitter rose 9 percent on positive analyst comments. Levi Strauss, the jeans company, rose 9.5 percent after an earnings and revenues beat.

These data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose by US$1.39 to US$33.60, while gold fell US$10.12 to US$1,647.35. The US dollar fell against most major currencies. The US Treasury 30-year bond yield rose 7 basis points to 1.37 percent while the 10-year note yield rose 5 basis points to 0.77 percent.


Equities were flat to higher Wednesday after recovering early losses as markets awaited a fiscal stimulus package from the EU. The Europe-wide STOXX 600 was up 0.02 percent, the German DAX eased 0.2 percent, the French CAC rose 0.1 percent, and the UK FTSE-100 eased 0.5 percent.

More signs that the coronavirus may be peaking in Europe added to underlying positive sentiment, with US stocks reflecting similar favorable expectations. Italy and France reported fewer new cases, and an array of countries considered plans for removing restrictions on commerce and other activity.

Among sectors, travel & leisure led gains, along with real estate, while lagging were energy, mining, insurance, and banks.

Asia Pacific

Major Asian markets posted mixed results Wednesday, with a light regional data calendar keeping the focus across most of the region on coronavirus developments. After the Japanese government declared a state of emergency Tuesday, authorities in Singapore and Hong Kong imposed tighter social restrictions, whereas the lockdown in Wuhan in place since January was lifted. Japan's Nikkei and Topix indices rose 2.1 percent and 1.6 percent on the day after stronger-than-expected machinery orders data. Hong Kong's Hang Seng index dropped 1.2 percent, while the Shanghai Composite index closed down 0.2 percent. Australia's All Ordinaries index fell 0.8 percent, with financial institutions among the weaker performers after regulators requested they limit dividend payments in coming months.

Japan's private sector machinery orders (excluding volatile items) rose 2.3 percent on the month in February, moderating from growth of 2.9 percent in January, but stronger than the consensus forecast for a drop of 2.7 percent. Weaker growth in manufacturing orders was outweighed by a rebound in non-manufacturing orders. In year-on-year terms, orders fell 2.4 percent after dropping 0.3 percent previously. Officials forecast these orders will fall 2.0 percent on the quarter in the three months to March, suggesting non-residential investment will make a negative contribution to GDP growth.

Looking ahead*

On Thursday in Europe, UK monthly GDP, UK industrial production, UK merchandise trade, German merchandise trade, Italian industrial production, and ECB minutes are due. In the US, Fed Chair Jerome Powell will speak, plus jobless claims, PPI-FD, and consumer sentiment. From Canada, the labor force survey report is due.

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