Daily market review

United States

Equities sagged on consolidative pressures after gains this month, including euphoria over promising vaccine news earlier in the week. Declines in mega-caps and in Walgreens kept the market on the defensive. The Dow Jones industrial index declined 0.6 percent, the S&P 500 eased 0.5 percent, and the NASDAQ 100 lost 0.2 percent.

Among sectors, utilities lagged along with health care, financials and technology. Apple and Microsoft were off as mega-caps had a bad day. Drug stores held down consumer staples, with Walgreens down 9.6 percent after news that Amazon would enter the pharmacy business. Consumer discretionary outperformed, and energy held up best, with driller Apache up 2.7 percent.

Among companies in focus, Boeing rose 3.8 percent as the market is pricing in regulatory approval for its 737 Max aircraft. Merck rose 1.7 percent after raising its dividend.

In US economic data, retail sales came in on the low side of expectations, up 0.3 percent overall versus Econoday's consensus for 0.4 percent. Separately, industrial production rose 1.1 percent to just edge out Econoday's consensus by 1 tenth as did manufacturing output which rose 1.0 percent.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 2 cents to US$43.83 while spot gold fell US$5.20 to US$1,881.70. The US dollar declined against most major currencies. The US Treasury 30-year bond yield fell 5 basis points to 1.62 percent while the 10-year note fell 3 basis points to 0.87 percent.


Tighter restrictions to curb Covid-19 spread and Brexit uncertainty weighed on risk sentiment Tuesday. The Europe-wide STOXX 600 eased 0.2 percent, the German DAX was unchanged, the French CAC rose 0.2 percent, and the UK FTSE-100 slipped 0.9 percent.

Countries across Europe appeared poised to extend lockdown restrictions, and Italy joined Germany, the UK, and France as a major concern.

UK stocks underperformed amid uncertainty as Brexit talks continued. An uptick in sterling depressed export-oriented UK stocks. Diageo, the drinks conglomerate, fell 1.7 percent, and Glencore, the miner, declined 1.2 percent.

Reports on Brexit were mixed, with some saying the EU and UK remained far apart on the same issues that have plagued the talks since the spring. By contrast, a Bloomberg report said a breakthrough agreement might come as early as next week, but also warned the talks might still collapse.

Among sectors, autos, energy, and insurance held up best while lagging were health care, travel & leisure, and food & beverage. Among companies in focus, Imperial Brands, the tobacco company, rose 7.3 percent after raising its guidance. Fortum, the Finnish power company, rose 1.6 percent on an earnings beat. On the downside, SSP Group, the UK caterer, fell 6.2 percent on an analyst downgrade, and Grieg Seafood declined 4.7 percent on an earnings miss.

Asia Pacific

Major Asian markets posted narrowly mixed results Tuesday with solid Monday gains on Wall Street providing only a limited boost to regional investor sentiment. Japan's Nikkei and Topix indices rose 0.4 percent and 0.2 percent respectively, while Australia's All Ordinaries index also rose 0.2 percent after technical problems disrupted trading on Monday. Hong Kong's Hang Seng index closed up 0.1 percent while the Shanghai Composite index closed down 0.2 percent.

Singapore's non-oil domestic exports fell 3.1 percent on the year in October after increasing 5.8 percent in September, with both electronics exports and non-electronics exports recording weaker growth. Weaker demand from the European Union and regional trading partners outweighed stronger growth in exports to China, Japan, and the United States. Total imports fell 9.3 percent on the year, after falling 1.6 percent previously.

The Reserve Bank of Australia published the minutes of its November 3 meeting showing that officials considered that the economy had started to recover from the initial impact of the Covid-19 pandemic but they expected labour market conditions and price pressures to remain weak for some time. Reflecting this assessment of the outlook, the minutes show that RBA officials do not expect to increase the main policy rate for at least three years and will take further policy measures if necessary.

Looking ahead*

On Wednesday in Asia/Pacific, New Zealand PPI, Japanese merchandise trade, and Australian wage price index reports are scheduled. In Europe, UK CPI, UK PPI, and Eurozone HICP reports are due. In North America, Canadian CPI, US housing starts reports are due.

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