Daily market review

United States

Cyclical/value stocks outpaced growth stocks Wednesday as major indexes gave up early gains to end flat to higher in quiet trading. The Dow Jones industrial index rose 0.2 percent, the S&P 500 gained 0.1 percent, and the NASDAQ 100 firmed 0.2 percent.

Markets continue to react favorably to passage of a US fiscal stimulus package, with expectations that payouts to taxpayers will give the economy a boost in 2021. Investors anticipate progress on the rolling out of vaccines, and a more activist approach to reviving the economy from the Biden administration.

Among sectors, energy, industrials, financials, and materials outperformed while lagging were consumer staples and communications services. Energy stocks got a boost from an uptick in oil prices on bullish inventories data, and airlines led industrials higher in a return of the reopening trade.

Relative weakness in the heavily-weighted FAANGs and mega-caps dragged on communications services and technology and held down the major stock indexes, with Google down 1.1 percent and Facebook down 1.8 percent following recent strong gains.

Among companies in focus, Tesla extended its stunning autumn advance, rising another 4.3 percent Wednesday after positive analyst commentary. AstraZeneca gained 0.6 percent after UK regulators approved its Covid vaccine.

In US economic news, the Chicago PMI came in at 59.5, well above expectations, and up from 58.2 in November but employment, at 48.8, continued to contract. Separately, the pending home sales index fell back 2.6 percent in November, more than expected, though year-over-year growth, at 16.4 percent, remained substantial.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 30 cents to US$51.34 while spot gold rose US$13.22 to US$1,892.39. The US dollar fell sharply against major currencies. The US Treasury 30-year bond yield eased 2 basis point to 1.66 percent while the 10-year note eased 1 basis point to 0.92 percent.


Equities gave up early gains to end slightly weaker Wednesday on profit-taking pressures headed into year-end after rising on expectations for recovery in 2021. The Europe-wide STOXX 600 eased 0.3 percent, the German DAX declined 0.3 percent, the French CAC slipped 0.2 percent, and the UK FTSE-100 was down 0.7 percent.

In focus were tightening UK lockdowns and rising case counts but also UK approval and expected near-term rollout of the AstraZeneca vaccine, and relief that uncertainty over Brexit appears past.

Among sectors, travel and leisure fared best along with retail and technology stocks. Worst off were utilities and media.

Among companies in focus, Unicaja Banco, the Spanish bank, rose 2.1 percent on news it expects to complete its acquisition of Liberbank in the second or third quarter. Pantheon Resources, the UK oil and gas company, rose 1.2 percent on a revenues beat. IEnergizer, the UK business services company, rose 13 percent after securing a new financing facility. On the downside, Oxford BioMedica, a supplier to AstraZeneca, fell 3.3 percent despite approval of AstraZeneca's vaccine for use.

Asia Pacific

Major Asian markets posted mixed results Wednesday, with the regional data calendar bare and no major developments impacting issues that have been the focus of investor attention in recent sessions. Hong Kong's Hang Seng index outperformed, closing up 2.2 percent, while the Shanghai Composite index advanced 1.0 percent. Japan's Nikkei and Topix indexes fell 0.5 percent and 0.8 percent, while Australia's All Ordinaries index fell 0.3 percent.

Looking ahead*

On Thursday in Asia, Chinese CFLP manufacturing PMI report is due. In North America, US jobless claims, plus Fed weekly reserve and money supply reports are due.

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