Daily market review

United States

Corporate earnings and hopes for a last-minute deal on a US fiscal package helped equities edge up Thursday. Both the Dow Jones industrials and S&P 500 gained 0.5 percent; the NASDAQ was up 0.2 percent.

Value stocks outperformed growth stocks, with energy leading gainers along with financials, industrials, and health care. Airlines, cutting cash-burn rates, led industrials higher with Southwest Air up 5.2 percent and American Airlines up 3.2 percent. Among financials, Discover Financial Services rallied 9.2 percent after topping earnings and revenues expectations. AT&T gained 5.8 percent after its earnings scored a rare beat.

On the downside, real estate lagged the most, while consumer staples were weighed down by a 6.9 percent drop in Kimberly-Clark after the paper goods manufacturer missed on earnings.

Consumer discretionary shares were depressed by a 5.8 percent selloff in Pulte even after the home builder beat earnings expectations, as well as a 4.9 percent drop for fast-food chain Chipotle on rising delivery expenses. Technology shares lagged, with Apple off 1.0 percent, and Citrix, the software company, down 7.1 percent. Tesla was up a muted 0.8 percent after earnings and revenues beats.

In US economic data, initial jobless claims moved sizably lower to 787,000 as California reported claims after a three-week delay. Separately, sales of existing homes shot 9.4 percent higher in September to a 6.540 million annual rate that, for a third report in a row, beat Econoday's consensus.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 80 cents to US$42.50 while spot gold fell US$20.04 to US$1,904.52. The US dollar rose against major currencies. The US Treasury 30-year bond yield rose 4 basis points to 1.68 percent while the 10-year note yield was up 4 basis points at 0.86 percent.


Equities ended flat to lower Thursday on mixed corporate results and cross-currents stemming from virus worries and lingering hopes for a US fiscal package. The Europe-wide STOXX 600, the German DAX, and the French CAC all slipped 0.1 percent, while the UK FTSE-100 was up 0.2 percent.

On the positive side for markets, the UK stepped up its aid package for businesses hit by the pandemic and subsidies for worker wages, and EU-UK Brexit talks were set to resume. On the negative side, Covid-19 cases and hospitalization rates continued to surge and hospitals faced new strains.

Among sectors, basic resources, technology, and chemicals fared worst while holding up best were banks, travel & leisure, and autos. Among notable winners, IAG, owner of British Airways, rose 1.8 percent after reporting its liquidity position remains strong despite poor business conditions. French drinks-maker Pernod Ricard rose 2.2 percent after topping sales expectations and raising guidance. Sika, the Swiss chemicals maker, rose 2.5 percent, also on better guidance.

On the negative side, Dassault, the French software giant, fell 2.9 percent on a revenues miss. Alfa Laval, the Swedish industrial equipment maker, declined 4.7 percent on an earnings miss and restructuring announcement.

Asia Pacific

Most major Asian markets closed lower Thursday, broadly in line with declines on Wall Street Wednesday. The regional data calendar was again light Thursday, though sentiment was impacted by updated economic forecasts from the International Monetary Fund, with officials there predicting that aggregate economic activity in the Asia-Pacific region will contract by 2.2 percent in 2020 before rebounding with growth of 6.9 percent in 2021.

Japan's Nikkei and Topix indices fell 0.7 percent and 1.1 percent respectively, the Shanghai Composite index dropped 0.4 percent, and Australia's All Ordinaries index closed down 0.3 percent. Hong Kong's Hang Seng index outperformed with a modest 0.1 percent increase

Hong Kong's headline consumer price index fell 2.2 percent on the year in September after dropping 0.4 percent in August and fell 1.8 percent on the month after advancing 2.0 percent previously. September's sharp drop was primarily driven by measures aimed at providing pandemic support to households, particularly rental waivers for public housing. Excluding these, underlying inflation in Hong Kong picked up from 0.1 percent in August to 0.5 percent in September. Officials expect price pressures to remain subdued in coming months in response to ongoing weakness in global and domestic economic conditions.

Looking ahead*

On Friday in Asia/Pacific, New Zealand CPI, Japanese CPI, Japanese PMI composite flash, and Singapore CPI reports are scheduled. In Europe, UK retail sales are due as are composite flash reports from France, Germany, the Eurozone and UK. In North America, the US PMI composite flash report is on tap.

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