Daily market review

United States

Equities recovered from their worst levels to end flat to slightly lower Friday as buyers emerged on the morning dip. The Dow Jones industrial index rose 0.2 percent, the S&P 500 was off 0.1 percent, and the NASDAQ 100 was off 0.2 percent.

Among sectors, financials and energy fared worst while holding up best were industrials and consumer staples. Communications services outperformed with Disney up 14 percent on very positive results in its streaming entertainment business.

Sentiment remained somewhat downbeat on perceptions that the market remains overextended to the upside. Lack of headway on US fiscal stimulus talks gave sellers an excuse in the morning.

Vaccine news was mixed as Sanofi and GlaxoSmithKline delayed rollout of their vaccine candidate while Pfizer and BioNTech received US approval to proceed with their vaccine. Concerns about the impact of a no-deal Brexit weighed on market sentiment after EU and UK officials warned that last-minute talks were stalemated.

In US data, producer prices rose 0.1 percent in November, in line with Econoday's consensus forecast. Separately, consumer sentiment rebounded in December from a November slump but still remains considerably lower than where it was early in the year.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell 31 cents to US$50.02 while spot gold rose US$3.50 to US$1839.00. The US dollar was mixed against major currencies. The US Treasury 30-year bond yield fell 1 basis points to 1.62 percent while the 10-year note fell 2 basis points to 0.89 percent.


Worries about Brexit and rising Covid-19 cases hit equities Friday. The Europe-wide STOXX 600 declined 0.8 percent, the German DAX lost 1.4 percent, the French CAC fell 0.8 percent, and the UK FTSE-100 was also off 0.8 percent.

Brexit negotiations were facing a Sunday deadline and comments from UK and EU officials suggested the talks remained deadlocked, which suggested rising chances for a no-deal Brexit. Meanwhile, EU officials appeared set to move ahead with a European fiscal stimulus package but US efforts to agree on a new virus relief deal faltered. In virus news, rising cases in France and German raised the prospect of extended restrictions.

Among sectors, banks suffered from concerns regulators will extend bans on dividend payments. Other cylicals suffered, including autos, oil & gas, and retail.

Health care stocks were among the day's worst performers, with French pharma Sanofi off 4 percent after its vaccine candidate showed a disappointing immune response. Among other companies in focus, Rolls Royce fell 8 percent after reporting its recovery from the pandemic downturn had stalled. Telecom stocks suffered as Ericsson fell 4 percent as it filed suit against Samsung over royalty payments and a patent dispute.

Asia Pacific

Major Asian markets posted mixed results Friday, with performance also diverging on the week. The regional data calendar was light Friday, keeping the focus on Brexit and US fiscal negotiations and the rollout of Covid-19 vaccines. The Shanghai Composite index underperformed on both the day and on the week with declines of 0.8 percent and 2.8 percent respectively, while Hong Kong's Hang Seng index closed up 0.4 percent on the day and fell 1.2 percent on the week. Japan's Nikkei index fell 0.4 percent on the day and on the week, while the Topix index rose 0.3 percent on the day and on the week. Australia's All Ordinaries index closed down 0.4 percent on the day and advanced 0.3 percent on the week.

India's index of industrial production rose 3.6 percent on the year in October after increasing 0.2 percent in September. Manufacturing output rose 3.5 percent on the year after a decline of 0.6 percent previously. More up-to-date PMI survey data indicate that conditions in the Indian manufacturing sector have improved significantly in the last few months, with the survey's headline index showing a strong increase in output in both October and November.

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Global Bond Market Recap

Global Currency Recap

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