Daily market review

United States

Positive earnings and a rally in tech and energy shares helped equities rebound Wednesday after two days of heavy losses, and as markets eyed more government stimulus. The Dow industrials gained 2.0 percent, the S&P 500 gained 2.3 percent, and the NASDAQ was up 2.8 percent.

Oil prices rebounded on hopes for new output cuts, and from the sense that the selloff has been overdone. Still, the supply overhang and storage woes that led to the recent huge declines remain. Technology shares outperformed, with the FAANG group back in favor, and microchips bouncing back. Telecom and restaurants also outperformed.

Leading the way higher, Facebook gained 6.7 percent, Apple rose 2.9 percent, Amazon rose 1.5 percent, and Google was up 3.8 percent, as big growth stocks returned to favor.

Among companies reporting results, Chipotle rallied 13 percent on an earnings beat and reassurance from management that it has the money to continue its share buyback program even if recovery is delayed. Texas Instruments rose 4.8 percent after posting an earnings beat but warning on the outlook. On the negative side, Netflix fell 2.9 percent despite recording huge subscriber gains but said it could not anticipate the virus impact ahead. Delta Airlines fell 2.5 percent after reporting whopping losses and cutting its guidance.

These data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose by US$1.24 to US$20.57, while spot gold rose US$33.48 to US$1,717.64. The US dollar was mixed against major currencies. The US Treasury 30-year bond yield rose 6 basis points to 1.22 percent while the 10-year note yield rose 5 basis points to 0.62 percent.


A bounce in oil prices and positive news from technology and bank stocks lifted equities Wednesday. The Europe-wide STOXX 600 rose 1.8 percent, the German DAX gained 1.6 percent, the French CAC rose 1.3 percent, and the oil-heavy UK FTSE-100 was up 2.3 percent.

News that Italy is planning to lift its lockdown on May 4 bolstered sentiment, as did expectations for more fiscal stimulus from the US and the EU. An EU summit Thursday is expected to produce a new European aid package

Rebounding oil prices helped big oil companies lead the day's rally, and for the moment eased worries over deflation and the virus-linked collapse in global demand. Mining companies took their cue from oil and outperformed, with BHP up 3.1 percent and Rio Tinto up 3.7 percent. Good quarterly results from tech companies, including STMicroelectronics, up 8.6 percent, and Ericsson, up 4.1 percent, helped tech outperform, while Sweden's Handelsbanken rose 7.6 percent on positive quarterly results and an upbeat outlook, to help Nordics lead the bank sector higher.

Gains were across the board, but lagging were retail, insurance, food & beverage, real estate, and household & personal goods, autos, and health care.

Asia Pacific

Moves in major Asian markets were mixed but generally modest Wednesday, with the regional data calendar light and few major coronavirus developments during the Asia trading session. Hong Kong's Hang Seng index and the Shanghai Composite index both closed higher, up 0.6 percent and 0.4 percent respectively, while Japan's Nikkei and Topix indices fell 0.7 percent and 0.6 percent respectively.

Australia's All Ordinaries index was little changed on the day, closing down 0.1 percent, with sharper losses earlier in the day largely reversed after the release of preliminary data showing strong retail sales growth. Officials estimate that seasonally adjusted retail sales, reflecting the stockpiling of essentials, rose a record 8.2 percent on the month in March. The preliminary Australian retail sales data published Tuesday are part of a new initiative by official statisticians to provide more timely and frequent data on the impact of the coronavirus pandemic on economic activity across a range of indicators. For now, preliminary retail sales data will be released two weeks before final data.

Looking ahead*

On Thursday in Asia/Pacific, Japanese PMI composite and manufacturing flash reports, plus Singapore CPI figures are scheduled. In Europe, Gfk consumer climate, UK public sector finance, UK retail sales, French PMI composite flash, German PMI composite flash, UK PMI composite flash, and UK CBI industrial trends reports are scheduled. In North America, it's US jobless claims, US PMI composite flash, new home sales, and Kansas City Fed manufacturing reports.

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