Daily market review

United States

Growth stocks helped equities edge up Friday in defensive trading, as cyclicals gave back some recent gains. The Dow Jones industrial index firmed 0.1 percent, the S&P 500 was up 0.2 percent, and the NASDAQ 100 outperformed with a gain of 0.9 percent.

On a quiet-holiday-thinned day, technology, information services, and health care stocks outperformed. Negative US Covid-19 headlines helped keep cyclicals in check, with energy and financials lagging the most. Driller National Oilwell Varco declined 3.3 percent, and ExxonMobil was off 1.5 percent as energy stocks corrected lower. Regional bank stocks suffered, with Comerica off 3.4 percent, and Keycorp off 1.1 percent.

Among companies in the news, Moderna, the US vaccine maker, jumped 16 percent as it appeared to benefit from its strong growth prospects and concerns over the Covid-19 vaccine clinical trials for its rival, AstraZeneca, which reported dosage errors in its vaccine trial. Other growth stocks advanced, with Tesla up 2.1 percent, Google up 1.3 percent, and Facebook up 0.8 percent.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell 48 cents to US$48.18 while spot gold fell US$18.73 to US$1787.79. The US dollar fell against most major currencies but gained vs. sterling. The US Treasury 30-year bond yield fell 5 basis points to 1.58 percent while the 10-year note fell 4 basis points to 0.85 percent.


Equities edged up Friday in quiet trading to end the week higher with hopes for slowing in Covid-19 cases in Europe in focus. The Europe-wide STOXX 600 and the German DAX both rose 0.4 percent, the French CAC gained 0.6 percent, and the UK FTSE-100 edged up 0.1 percent.

Reports suggesting some stabilizing in European infection growth helped underpin market sentiment. On the negative side, there was mixed news on the vaccine front, with AstraZeneca expected to conduct another trial of its Covid-19 vaccine after questions were raised about a dosing error in its last round of trials.

Sector performance was mixed, with energy, chemicals, and technology shares outperforming and personal & households goods, real estate, and insurance lagging.

In economic news, the European Commission's measure of economic sentiment (ESI) lost fresh ground in November. However, at 87.6, down from an upwardly revised 91.1 in October, the headline index was on the strong side of expectations. This was the first decline since April and made for a 3-month low.

Among companies in the news, Banco Bilbao Vizcaya rose 3.8 percent after it broke off merger talks with Banco Sabadell, which dropped 18 percent on the news. Vestas Wind Systems, the Danish wind turbine leader, rose 3.9 percent on news of a big order from Australia. On the downside, Tungsten, the UK IT services, company, fell 8.9 percent on a profits warning.

Asia Pacific

Most major Asian markets closed Friday higher on the day, with broad-based gains on the week across the region. Australia's All Ordinaries index underperformed, closing down 0.5 percent on the day and rising 1.1 percent on the week, with sentiment impacted by concerns about ongoing political tensions between Australia and China after Chinese authorities announced severe tariffs on Australian wine exports. The Shanghai Composite index outperformed on the day with an increase of 1.1 percent after the release of strong industrial profits, taking the gain on the week to 0.9 percent. Japan's Nikkei and Topix indices rose 0.4 percent and 0.5 percent respectively on the day and gained 4.4 percent and 3.4 percent on the week, Hong Kong's Hang Seng index rose 0.4 percnet on the day and 1.8 percent on the week.

Chinese industrial profits rose 28.2 percent in year-on-year terms in October, accelerating from an increase of 10.1 percent in September, with year-to-date growth improving from a drop of 2.4 percent previously to an increase of 0.7 percent. This is broadly in line with other data suggesting that the Chinese manufacturing sector is continuing to recover, with both the PMI manufacturing survey and official industrial production data showing the sector expanded in October.

India's gross domestic product fell 7.5 percent on the year in the three months to September, picking up from a drop of 23.9 percent in the three months to June and broadly in line with monthly data showing economic conditions have improved after the initial impact of the Covid-19 pandemic. After cutting policy rates by a cumulative 115 basis points earlier in the year, the Reserve Bank of India left the benchmark repurchase rate unchanged at 4.00 percent at its most recent policy review held early October. Officials expressed confidence that growth is poised to resume its pre-pandemic trajectory and also argued that recent increases in Indian inflation mainly reflected temporary factors. The RBI's next policy meeting is scheduled to take place next week.

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