US, Europe mostly higher on vaccine hopes, company news; Asia mixed

United States

Health care stocks led equities mostly higher Friday after Pfizer said it may ask for permission next month to start using its Covid-19 vaccine, but a late selloff in megacaps dampened the gains. The Dow Jones industrial index rose 0.4 percent, the S&P 500 firmed 0.1 percent, but the NASDAQ declined 0.4 percent.

Positive US retail sales and consumer sentiment data contributed to the better mood, as markets looked past surprisingly weak industrial production figures. Mega-caps initially gave markets a boost, but selling pressures appeared late in the day, with Amazon off 2.0 percent, and Apple off 1.4 percent. Weakness in energy stocks also restrained gains, with oil services leader Schlumberger off 8.8 percent on disappointing quarterly results.

Other company news helped. Boeing rose 1.9 percent after EU regulators approved its 737 Max to fly again. Another Dow heavyweight, Caterpillar, advanced 2.3 percent after an upgrade at Wells Fargo. Navistar jumped 23 percent on a report it may be acquired by Traton, and CIT Group rallied 27 percent on news it will be acquired by First Citizens BancShares.

Among sectors, industrials and materials joined health care in leading the gains, while energy and real estate lagged.

Among companies, health care winners included Vertex Pharma, which bounced back 1.3 percent after dropping Thursday. Regeneron, maker of Covid treatments, rose 2.5 percent, and Pfizer was up 3.8 percent. On the downside, railway Kansas City Southern declined 2.7 percent despite an earnings beat, and trucker JB Hunt fell 9.7 percent after an earnings miss.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil declined 35 cents to US$42.80 while spot gold fell US$6.92 to US$1,899.74. The US dollar was mixed against major currencies. The US Treasury 30-year bond yield rose 1 basis point to 1.53 percent while the 10-year note yield was up 1 basis point at 0.74 percent.

Europe

Positive earnings news and vaccine hopes helped equities bounce back Friday despite expectations for more restrictions in Europe to slow the pandemic. The Europe-wide STOXX 600 rose 1.3 percent, the German DAX gained 1.6 percent, the French CAC rallied 2.0 percent, and the export-heavy UK FTSE-100 rose 1.5 percent.

Risk sentiment improved after Pfizer and its German partner BioNTech said they may apply in late November for permission to start using their Covid-19 vaccine, and that it would be able to deliver promised vaccines widely. Markets have been shaken recently by pauses in competing vaccine trials at Johnson & Johnson and at AstraZeneca.

Separately, UK stocks were volatile in response to Brexit news, with UK Prime Minister Boris Johnson appearing to say the UK would proceed with a no-deal Brexit unless the EU altered its stance, and EU leaders suggesting talks would continue.

An earnings beat from Daimler, up 6.1 percent, paced an outperforming auto sector, and French luxury goods conglomerate LVMH rose 2.8 percent after reporting better than expected results. In M&A news, Thyssenkrupp, the German industrial conglomerate, rose 1.7 percent on a report it may sell its troubled steel business.

Outperforming sectors included autos, personal & household goods, banks, financial services, media, retail, industrials, and health care. Lagging were travel & leisure, food & beverage, real estate, telecom, utilities, and oil & gas.

Asia Pacific

Major Asian markets posted mixed results Friday, with moves on the week also varied across the region. With the regional data calendar light Friday, investors remained focused on external developments, including further weakness on Wall Street Thursday and rising Covid-19 cases in Europe. Japan's Nikkei and Topix indices fell 0.4 percent and 0.9 percent respectively on the day and also underperformed on the week with declines of 0.9 percent and 1.8 percent respectively. Australia's All Ordinaries index also fell Friday, closing down 0.5 percent, but rose 1.1 percent on the week. Hong Kong's Hang Seng index rose 0.9 percent on the day and 0.8 percent on the week, while the Shanghai Composite index rose 0.1 percent on the day and 2.0 percent on the week.

Singapore's non-oil domestic exports rose 5.9 percent on the year in September after increasing 7.7 percent in August. The fall in headline exports growth in September was largely driven by weaker demand from China and the United States and weaker growth in non-electronics exports. Total imports fell 1.6 percent on the year, after falling a revised 11.0 percent previously.

Global Stock Market Recap

Global Bond Market Recap

Global Currency Recap

Commodities and currencies

Looking forward

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