Daily market review

United States

Equities were mixed to mostly lower Thursday as a disappointing US jobless claims report hurt many value/cyclical stocks, while technology and energy held up better. The Dow Jones industrial index eased 0.2 percent, the S&P 500 was off 0.1 percent, and the NASDAQ 100 rose 0.5 percent.

In US data, initial jobless claims were much higher than expectations with a 137,000 increase, reaching 853,000 in the week ended December 5, their highest level since September 19. Mixed news from US fiscal stimulus talks left markets uncertain.

Among sectors, energy outperformed on a rally in oil prices. A rebound in Apple, up 1.2 percent, led tech stocks higher. Consumer discretionary outperformed. Financials lagged, along with consumer staples, with weakness in food stocks. Industrials lagged the most on losses in rails and trucking, with rail leader CSX off 1.9 percent on an analyst downgrade.

Among companies in focus, Starbucks jumped 5 percent as its latest results showed business recovering from pandemic-induced weakness. In the hot IPO market, Airbnb more than doubled in its first day of trading. On the downside, Ciena fell 2.3 percent after a revenues miss and disappointing guidance.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$1.38 to US$50.33 while spot gold fell US$1.65 to US$1,835.50. The US dollar was mostly weaker against major currencies. The US Treasury 30-year bond yield fell 5 basis points to 1.64 percent while the 10-year note fell 3 basis points to 0.91 percent.


Equities ended mixed to lower Friday after the European Central Bank boosted its asset purchases as expected, and the outlook for Brexit remained unclear. The Europe-wide STOXX 600 eased 0.4 percent, the German DAX declined 0.3 percent, the French CAC firmed 0.1 percent, and the UK FTSE-100 rose 0.5 percent. An uptick in crude oil prices gave energy stocks a boost.

The ECB announced a sharp increase in net asset purchases via the pandemic emergency purchase programme from €1.35 trillion to €1.85 trillion, a €500 billion rise that matched the market consensus. On Brexit, there was no breakthrough in talks between UK Prime Minister Boris Johnson and his EU counterparts, and negotiations are expected to go through the weekend.

Rather downbeat comments from the ECB on the economic outlook undercut risk appetite. Worst off were banks, retail, media, autos, industrials, and construction, while holding up best were oil & gas, real estate, and health care.

UK stocks outperformed as sterling's weakness on Brexit uncertainty gave export-oriented sectors a boost, especially miners and oil & gas. BP was among the day's winners, up 4.5 percent, and global drinks leader Diageo rose 2.1 percent as it has heavy exposure to overseas markets.

Asia Pacific

Most major Asian markets closed lower Thursday though moves were generally moderate, with the regional data calendar light and investors waiting for greater clarity on the outcome of Brexit and US fiscal negotiations. Australia's All Ordinaries index posted a relatively large decline, closing down 0.7 percent after advancing for five consecutive sessions since the start of the month. Hong Kong's Hang Seng index fell 0.4 percent and Japan's Nikkei and Topix indices both dropped 0.2 percent, while the Shanghai Composite index was flat on the day.

Japan's producer price index fell 2.2 percent on the year in November after dropping 2.1 percent in October. This is the ninth consecutive year-on-year decline in producer prices and the biggest since May, suggesting that the impact of the Covid-19 pandemic is continuing to suppress price pressures in the Japanese economy. Energy prices posted bigger year-on-year declines, as did transportation prices, partly offset by a slightly bigger increase in food prices.

Looking ahead*

On Friday in Asia, the Indian industrial production report is due. In Europe, German CPI, Italian industrial production, Italian unemployment rate, and Italian industrial production reports are scheduled. In North America, US PPI-FD and US consumer sentiment reports are on tap.

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