Daily market review

United States

Gains in energy and financials offset weakness in defensive sectors to leave equities narrowly mixed Tuesday. The Dow Jones industrial average gained 0.2 percent, the S&P 500 eased 0.1 percent, and the NASDAQ composite slipped 0.3 percent.

Vaccine optimism helped value stocks outperform on the reopening trade, while growth stocks, especially tech, lagged, with Apple down 1.6 percent, Microsoft off 0.5 percent. Tesla, the momentum favorite, declined 2.4 percent. Cruise lines were among the day's best performers, with Royal Caribbean up 9.7 percent.

An uptick in oil prices due to the winter storm across the south and central US gave energy shares a lift: Apache, the driller, rallied 6.3 percent, and Chevron rose 2 percent. Bank stocks improved as the yield curve continued to steepen dramatically, with JP Morgan up 2.4 percent. Interest rate sensitive sectors like real estate and utilities lagged.

Among companies in focus, Southwest Airlines gained 1.2 percent after reporting a lower-than-expected burn rate. AutoNation, the auto broker, rose 1.3 percent on an earnings beat and buyback. Advance Auto Parts gained 1.8 percent on upbeat sales trends.

On the downside, Palantir, the big data business, dropped 13 percent on a surprising earnings loss. Ecolab, the water purifier, fell 4.1 percent on a Covid-related miss. CVS, the drugstore chain, fell 5 percent despite an earnings beat and better guidance.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 89 cents to US$63.49 while spot gold fell US$25.71 to US$1,795.45. The US dollar rose vs. major currencies. The US Treasury 30-year bond yield was up 7 basis points at 2.09 percent while the 10-year note yield was up 9 basis points at 1.30 percent.


Equities were flat to weaker Tuesday, with strength in basic resources and energy stocks offset by weakness elsewhere. The Europe-wide STOXX 600 eased 0.1 percent, the German DAX slipped 0.3 percent, the French CAC was flat, and the UK FTSE-100 eased 0.1 percent.

Among sectors, outperforming were basic resources, banks, travel & leisure, oil & gas, industrials, autos, insurance, financials, and technology, while lagging were utilities, telecom, real estate, media, food & beverage, health care, retail, and personal household goods.

Among companies in focus, Glencore, the miner, rose 2.5 percent in London trading after reinstating its dividend, and BHP gained 1.5 percent in London after an earnings beat and better guidance. On the downside, Basilea Pharmaceutica, the Swiss biopharma, fell 3.6 percent on disappointing guidance, while Kerry Group, the Irish food company, lost 2 percent as a major investor questioned its acquisitions.

In economic data, the German ZEW February survey found financial analysts' slightly more cautious about the current state of the German economy but significantly more optimistic about the medium-term outlook. Overall, the results were on the strong side of the market consensus.

Asia Pacific

Signs of vaccine progress and recovery hopes boosted Asian markets Tuesday with Hong Kong leading on its first day back from the Lunar New Year holiday.

Hong Kong's Hang Seng index rallied 1.9 percent on hopes that vaccines will succeed in curbing the pandemic, and expectations that Mainland Chinese investors will be good buyers when they return from their extended Lunar New Year holiday later this week. Property, finance, and information tech stocks outperformed.

Mainland Chinese cinema stocks rallied on surging ticket sales during the Lundar New Year holidays, with Huayi Tencent Entertainment up 90 percent.

Japanese markets advanced, with the Nikkei 225 up 1.3 percent while the Topix gained 0.6 percent, as investors embraced the global recovery narrative and reacted to declining Japanese Covid case counts. Meanwhile, BOJ Governor Haruhiko Kuroda dismissed bubble fears, and said the market reflects expectations for recovery. Among leaders, SoftBank gained 4.2 percent to break its record highs from the dot-com era.

News that South Korea would ease lockdown restrictions and buy more vaccines lifted Korean equities Tuesday with the KOSPI up 0.5 percent. Chipmakers Samsung Electronics, up 0.8 percent, and SK Hynix, up 0.4 percent, accounted for much of the gains.

Meanwhile, Australian shares were bolstered by rising commodities prices, with energy and miners leading. The All Ordinaries index gained 0.6 percent. BHP, the big miner, rallied 2.7 percent on a big earnings beat, powered by strong Chinese demand, and on news it would boost its dividend.

India lagged as the NSE Nifty 50 index was flat while the S&P BSE Sensex eased 0.1 percent as Reliance Industries, up 1.3 percent, extended its recent gains, offset by a selloff in bank stocks. Indian markets have seen profit-taking after rising this month on strong corporate results and news of huge government fiscal stimulus.

Looking ahead*

On Wednesday in Asia, Japanese machinery orders, Japanese merchandise trade, and Singapore merchandise trade figures are due. In Europe, UK CPI and PPI reports are scheduled. In North America, Canadian CPI, plus US PPI, US retail sales, US industrial production, US business inventories, US housing market index reports, and the FOMC minutes are on tap.

Global Stock Market Recap

Global Bond Market Recap

Global Currency Recap

Commodities and currencies