Daily market review

United States

Value/cyclicals kept major equity indexes in positive territory Friday to end another strong week as investors focused on expectations for recovery and on corporate results. The Dow Jones industrial average rose 0.3 percent, the S&P 500 gained 0.4 percent, and NASDAQ 100 was up 0.6 percent.

Investors expect Congress will soon approve the $1.9 trillion spending package requested by the Biden administration, and hope for more progress combating the pandemic. A somewhat disappointing US jobs report only bolstered expectations for fiscal stimulus.

Among sectors, energy, materials, and industrials fared best while technology lagged, with Apple down 0.3 percent. Another rise in oil prices underpinned energy stocks, with Exxon Mobil up 3.4 percent.

Among companies reporting, Snap rose 9 percent, Columbia Sportswear rallied 15 percent, Estee Lauder rose 7.8 percent, and News Corp. rose 4.5 percent on positive results. On the downside, Gopro fell 19 percent, Cboe Markets lost 5.4 percent, and Peloton fell 5.9 percent after missing market expectations.

In US economic data, nonfarm payrolls rose 49,000 in January, roughly as expected by Econoday's consensus for a 50,000 increase, but below market expectations that centered on a figure closer to 100,000. The December reading was revised sharply down, as the economy shed 227,000 jobs compared to the previous estimate of 140,000. The unemployment rate fell to 6.3 percent from 6.7 percent, below expectations, but remained well above the February pre-pandemic level of 3.5 percent, while the participation rate edged down to 61.4 percent from 61.5 percent.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 59 cents to US$59.45 while spot gold rose US$16.22 to US$1,810.61. The US dollar fell against most major currencies. The US Treasury 30-year bond yield was up 4 basis points at 1.98 percent while the 10-year note yield rose 3 basis points to 1.17 percent.


Equities were narrowly mixed Friday with France and Italy outperforming and Germany and the UK lagging. The Europe-wide STOXX 600 and the German DAX were both unchanged, the French CAC rose 0.9 percent, and the UK FTSE-100 slipped 0.2 percent.

The Italian FTSE-MIB rose 0.8 percent as former ECB President Mario Draghi moved toward forming an emergency government. German shares suffered from weaker-then-expected manufacturers' orders data, while UK markets were hurt by sterling's strength, which hit exporters.

A mixed batch of earnings news led to mixed showing among sectors. Holding up best were travel & leisure, retail, basic resources, banks, construction, autos, and technology. Lagging were telecom, industrials, utilities, financial services, health care, media, and real estate.

French markets got a boost from Vinci, the builder, up 5.8 percent on strong quarterly results, along with Renault, up 5.2 percent, and Societe Generale, up 3.1 percent.

Among other companies reporting, Beazley, the UK insurer, rose 12 percent on strong underwriting results. French pharma Sanofi SA rose 2 percent on an earnings beat and improved guidance. Carlsberg, the brewer, rose 3.5 percent on an earnings beat.

On the downside, Neste, the Finnish oil refiner, fell 6.4 percent on a revenues miss and weaker guidance. Alstom, the French railway builder, fell 5.5 percent after backing out of a plan to build a new commuter line in Paris. Skanska, the Swedish builder, fell 5 percent on a revenues miss.

In economic news, German manufacturers' orders saw their first decline in eight months in December. A 1.9 percent monthly fall was somewhat steeper than expected and following a sharper revised 2.7 percent gain in November, reduced annual growth from 6.8 percent to 6.4 percent. The drop put orders 2.6 percent above their pre-lockdown level in February.

Asia Pacific

Risk-on sentiment propelled most markets higher Friday, with Japanese cyclicals leading after a rally on Wall Street spurred by stimulus hopes and expectations for recovery.

Japan's Nikkei 225 rose 1.5 percent and the broader Topix gained 1.4 percent after the US Congress appeared poised to approve a $1.9 trillion stimulus package. Automakers led the advance, with Mazda Motors rallying 19 percent after improving its guidance. Mitsubishi Motors was up 8 percent.

Australia's All Ordinaries index rose 1.1 percent with financials continuing their advance after supportive policy news from the Reserve Bank of Australia earlier in the week. Industrials and consumer discretionary shares also outperformed on hopes for an easing in restrictions with the rollout of vaccines in the first half.

South Korea's KOSPI gained 0.7 percent, with technology shares leading, including big chipmakers Samsung, up 1.2 percent, and SK Hynix, up 2.0 percent. Hong Kong's Hang Seng index rose 0.6 percent as inflows from Mainland China remained strong.

Chinese shares lagged, with the Shanghai composite off 0.3 percent as profit-taking set in after the market failed to extend initial gains following the rally on Wall Street. Sector performance was mixed with health care and financials strong while technology and materials were weak.

Indian shares edged up again Friday to end a very strong week. The NSE Nifty 50 index and the S&P BSE Sensex both firmed 0.2 percent, led by State Bank of India, which surged 15 percent on an earnings beat.

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