Daily market review

United States

Equities recovered from initial declines to end flat to higher Wednesday as hopes for a US fiscal deal continued. The Dow Jones industrial index rose 0.2 percent, the S&P 500 gained 0.2 percent, and the NASDAQ 100 eased 0.1 percent.

Sectors were mixed, with materials, real estate, and information technology lagging. Outperforming were energy, with oil prices better, financials, and communications services. Among the day's leaders, driller Apache rose 6 percent, and Google gained 1.7 percent. Weakness in McDonalds, off 2.4 percent, and Walmart, down 1.4 percent, held back the Dow.

Among companies in focus, Pfizer rose 3.5 percent after UK authorities approved its Covid-19 vaccine. Salesforce fell 8.9 percent on its acquisition of software firm Slack.

In US economic news, ADP's forecast for private payrolls was 307,000 versus Econoday's consensus for 420,000, a result that may lower expectations for Friday's November employment report.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 81 cents to US$48.19 while spot gold rose US$14.04 to US$1,828.38. The US dollar was mostly weaker against major currencies, with the notable exception of sterling and the Japanese yen. The US Treasury 30-year bond yield rose 2 basis points to 1.69 percent while the 10-year note gained 2 basis points to 0.95 percent.


European equities were mostly flat to lower Wednesday as markets continued to pause after big November gains, though UK markets rose on positive Covid-19 vaccine news. The Europe-wide STOXX 600 eased 0.1 percent, the German DAX declined 0.5 percent, the French CAC was unchanged, and the UK FTSE-100 rose 1.2 percent.

UK markets outperformed after UK authorities approved the Pfizer-BioNTech vaccine and said it would be rolled out next week. In other macro news, Bloomberg reported differences have widened between Poland and Hungary and their EU partners over the long-delayed EU-wide fiscal stimulus package. Brexit headlines were negative, which weakened sterling, a paradoxical positive for the export-oriented FTSE-100.

Sector performance was mixed, with chemicals, technology, and retail lagging while holding up best were energy, banks, and mining stocks. Among companies in focus: German vaccine maker BioNTech rose 5.4 percent on the UK approval of its vaccine; Danish wind farm company Oersted fell 5 percent on news of a big tax hit; Clas Ohlson, the Swedish home improvement chain, declined 4 percent on an earnings miss.

On the positive side, Stock Spirits rose 11 percent on an earnings beat. Tecan Group, the Swiss laboratory equipment maker, rose 8 percent after raising its guidance as demand for its products has boomed during the pandemic. Roche Holding, the Swiss pharma, gained 1.1 percent after the Food and Drug Administration approved its Covid-19 antibody test.

Asia Pacific

Most major Asian markets were little changed Wednesday, with a relatively light regional data calendar and gains on Wall Street Tuesday having little impact. Japan's Nikkei and Topix closed up 0.1 percent and 0.3 percent respectively, the Shanghai Composite and Hong Kong's Hang Seng both edged 0.1 percent lower, and Australia's All Ordinaries index was flat on the day.

GDP in Australia rose 3.3 percent in the third quarter, rebounding sharply from the second quarter's record decline of 7.0 percent; year-on-year growth improved from a fall of 6.3 percent to a decline of 3.8 percent. Consumption and investment spending both strengthened, offset by weaker net exports. Public health restrictions were eased in much of the country during this period, helping to drive a strong recovery in activity after the initial impact of the Covid-19 pandemic. Headline growth, however, was weighed down by the impact of a severe lockdown during the quarter in Victoria, Australia's second most populous state and location of around 25 percent of economic activity.

Looking ahead*

On Thursday in Asia/Pacific, Hong Kong PMI, Japanese PMI composite final, Australian goods and services trade, Singapore PMI, Chinese Caixin composite PMI, and Indian PMI composite reports are due. In Europe, French PMI composite final, German PMI composite final, Eurozone PMI composite final, UK PMI composite final, and Eurozone retail sales reports are scheduled. In North America, US jobless claims, US PMI composite final, and the US ISM services report are on tap.

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