Daily market review

United States

Weakness in banks, energy, and airlines led equities lower Tuesday as the same sectors that led Monday's advance fell back. The Dow Jones industrial index and the S&P 500 both slipped 0.5 percent, and the NASDAQ eased 0.3 percent.

Trading was hesitant ahead of Tuesday night's presidential debate, and sentiment was dampened by gloomy Covid-19 news including the one millionth death worldwide, and word that New York City's infection rate rose above 3 percent for the first time in months. Concerns are rising about a second wave, possibly big, headed into winter.

Among sectors, energy fared worst as oil prices slipped. Banks and insurance dragged down financials. Weakness in airlines hurt industrials. Grocery stores and tobacco depressed consumer staples, and consumer discretionary suffered from declines in restaurants and department stores. Holding up best were communications services and technology, with utilities faring best.

Store stocks suffered from worries that consumption may falter despite Tuesday's upbeat US consumer confidence report. Monday's Center for Disease Control warning to avoid crowded stores was another negative.

Among companies in the news, electric automaker Nikola dropped 7.4 percent on negative publicity about its founder. Penn National Gaming fell 4.8 percent amid concerns about Covid-19 cases among professional football players. McCormick, the spice leader, declined 2.7 percent on disappointing guidance. On the positive side, Beyond Meat shares rose 9.5 percent on news that Walmart will expand its burger distribution. NCR, the point-of-sale technology company, rose 10 percent after an upgrade at Stephens.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell US$1.66 to US$40.79 while spot gold rose US$16.31 to US$1,897.23. The US dollar fell against most major currencies. The US Treasury 30-year bond yield eased 1 basis point to 1.41 percent while the 10-year note yield declined 2 basis points to 0.64 percent.


Equities eased Tuesday as banks gave back some of Monday's gains, with trading muted before the first Trump-Biden presidential debate Tuesday night. Sentiment was dampened by discouraging Covid-19 case figures, including one million deaths reported worldwide. The Europe-wide STOXX 600 declined 0.5 percent, the German DAX percent eased 0.4 percent, the French CAC declined 0.2 percent, and the UK FTSE-100 fell 0.5 percent.

Among sectors, banks, insurance, energy, and real estate lagged the most, while industrials, utilities, retail, and industrial goods and services were the best performers.

UK hospitality stocks were hurt by a UK official's comment that restaurants and pubs might need to be closed until there is a vaccine. Pub chains Marston's and Mitchells & Butlers fell 5.6 percent and 5.1 percent respectively.

In economic data, German consumer prices were marginally weaker than expected in September. The CPI fell 0.2 percent on the month to reduce annual inflation from August's zero percent to minus 0.2 percent, its lowest reading since January 2015. However, inflation continues to be biased down by the 3 percentage point reduction in German VAT that came into effect at the start of July. The HICP remains similarly impacted, and a flash 0.4 percent monthly fall that saw its annual change slide from minus 0.1 percent to minus 0.4 percent.

Asia Pacific

Most major Asian markets were little changed Tuesday, with the regional data calendar bare and much of the focus of investors on events scheduled to take place later in the week, including the first US presidential debate and key US economic data. Japan's Nikkei and Topix indices closed up 0.1 and down 0.2 percent respectively, the Shanghai Composite index advanced 0.2 percent on the day, and Australia's All Ordinaries index rose 0.1 percent.

Hong Kong's Hang Seng index posted a somewhat larger move, closing down 0.9 percent, despite a strong gain in the shares of newly-listed logistics firm ZTO Express, which is the latest US-listed Chinese firm to establish a secondary listing in Hong Kong.

Looking ahead*

On Wednesday in Asia/Pacific, Japanese industrial production, Japanese retail sales, Chinese CFLP PMI manufacturing and Chinese Caixin PMI manufacturing reports are on the calendar. In Europe, the following reports are scheduled: UK Nationwide Housing Price Index, German retail sales, UK GDP, French consumer manufactured goods sales, French CPI, French PPI, Swiss KOF Leading indicator, German unemployment, Eurozone HICP flash, and Italian CPI. In North America, US ADP, US GDP, Chicago PMI, US pending home sales, and Canadian monthly GDP reports are on tap.

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