Daily market review

United States

Upward momentum from Wednesday persisted Thursday with cyclicals leading on the recovery narrative, with a boost from IBM and Morgan Stanley news. The Dow Jones industrial index rose 0.4 percent, the S&P 500 gained 0.8 percent, and the NASDAQ firmed by 0.5 percent.

Renewed fiscal relief talks remained the market focus, with expectations rising for targeted spending followed by a broader relief package, if not now, then after the election. Hopes for positive news on coronavirus vaccines and treatments added to better sentiment.

Among sectors, energy stocks led the way higher as oil prices extended their recent advance. Financials gained on bargain-hunting spurred by the recovery narrative, and news that Morgan Stanley, up 0.6 percent, will buy the big asset manager Eaton Vance, which rose 48 percent. Other asset managers advancing included Invesco, up 2.6 percent, and BlackRock, up 2.1 percent.

Among companies in focus, IBM popped up 6.0 percent to lead the Dow higher as the market endorsed the company's plan to spin off its services and infrastructure businesses to focus on cloud computing and artificial intelligence. Regeneron rose 1.4 percent after asking the Food and Drug Administration to allow emergency use of its antibody therapy for Covid-19. Costco rose 0.6 percent after a positive September same-sales report.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$1.32 to US$43.40 while spot gold rose US$6.42 to US$1,893.69. The US dollar weakened slightly against most major currencies. The US Treasury 30-year bond yield declined 2 basis points to 1.57 percent while the 10-year note yield declined 3 basis points to 0.77 percent.


Renewed hopes for US fiscal stimulus gave equities a boost Thursday but investors continued to eye negative news on virus cases in Europe. The Europe-wide STOXX 600 rose 0.8 percent, the German DAX percent gained 0.9 percent, the French CAC firmed 0.6 percent, and the export-heavy UK FTSE-100 rose 0.5 percent.

On fiscal policy, House Speaker Nancy Pelosi and President Trump both said talks are continuing on a spending package to boost the economy after several days of conflicting signals. Pelosi appeared to accept a standalone airline relief bill if the White House agrees to move on a broader package afterwards.

Among sectors, energy improved with an uptick in oil prices. Other outperformers included banks, travel & leisure, airlines, technology, telecom, and media. Lagging were basic resources, autos, personal & household goods, retail, and financial services.

Among companies in focus, Talk Talk Telecom rose 18 percent on a takeover proposal from an asset manager. JKX Oil & Gas gained 16 percent on its third-quarter update. Stolt-Nielsen, a Norwegian transport firm, rose 15 percent on a positive earnings surprise.

Asia Pacific

Most major Asian markets closed higher Thursday, following the lead set by Wall Street Wednesday on renewed hopes for additional US fiscal stimulus and the prospect that US authorities will approve a new Covid-19 treatment. Australia's All Ordinaries index advanced 1.1 percent, while Japan's Nikkei and Topix indexes closed up 1.0 percent and 0.5 percent respectively.

Hong Kong's Hang Seng index, however, fell 0.2 percent, largely reflecting losses in the tech sector on renewed concerns that US authorities will impose additional export restrictions on Chinese tech firms. Chinese markets were again closed for national holidays.

Looking ahead*

On Friday in Asia/Pacific, reports on Japanese household spending and Chinese Caixin composite PMI figures plus the Reserve Bank of India policy announcement are on the calendar. In Europe, reports are due on UK industrial production, UK merchandise trade, UK monthly GDP, French industrial production, and Italian industrial production. In North America, Canadian labour force survey and US wholesale inventories reports are on tap.

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