Daily market review

United States

Equities seesawed higher Friday, propelled by a big beat in the US jobs report, which fed the recovery narrative, and boosted cyclicals. The Dow Jones industrial average rose 1.9 percent while the S&P 500 rallied 2.0 percent and the NASDAQ gained 1.6 percent.

Some speculative stocks remained under heavy selling pressure on rising market interest rates after news that US payrolls surged by 379,000 in February. Tesla, the momentum favorite, dropped 3.8 percent. Other mega-caps recovered to end higher after dip-buying, with Apple up 1.1 percent, Microsoft up 2.2 percent, and Facebook up 2.6 percent.

Leading sectors were energy, communications services, financials, materials, and consumer staples, while consumer discretionary lagged. Among energy stocks, Chevron gained 4.3 percent as oil prices rose for a second day after OPEC+ surprised by keeping output levels steady.

Among companies in focus, Boeing eased 0.5 percent after the US suspended tariffs on Airbus imports in a bid to resolve the US-EU dispute over airplane subsidies. Costco fell 0.5 percent after an earnings miss, though it recovered from the day's lows. On the positive side, Cisco rose 3.8 percent on an upgrade at JP Morgan. Fifth Third, the regional bank, gained 3.4 percent on an upgrade at Goldman.

In economic data, nonfarm payrolls soared in February, surpassing Econoday's consensus for a 175,000 increase. The January reading was revised sharply up to 166,000 from 49,000. The unemployment rate edged down to 6.2 percent, slightly below expectations of 6.3 percent, but still far exceeding the pre-pandemic rate of 3.5 percent.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil jumped $2.44 to US$69.56 while spot gold eased 9 cents to US$1,698.32. The US dollar rose vs. most major currencies. The US Treasury 30-year bond yield was off 3 basis points at 2.28 percent while the 10-year note yield was up 1 basis point to 1.55 percent.


European markets weakened again Friday on rising market interest rates, with growth stocks lagging. The Europe-wide STOXX 600 fell 0.8 percent, as did the French CAC, while the German DAX fell 1.0 percent, and the FTSE-100 eased 0.3 percent.

News that France had tightened regional Covid restrictions weighed on risk appetite, which hit travel & leisure stocks. On the positive side, banks rose with rising interest rates while energy stocks gained on rising oil prices.

Among sectors, outperforming were banks, oil & gas, food & beverage, while lagging were travel & leisure, financial services, real estate, technology, industrials, and media.

Among companies in the news, VW gained 3.6 percent on news it will accelerate its electric vehicles. On the downside, Corbion, the chemicals maker, fell 5.8 percent on an earnings miss. London Stock Exchange fell 14 percent on an analyst downgrade after it issued in-line quarterly results.

German manufacturers' orders rebounded in January but still only reversed a portion of December's steeper revised decline. Following a 2.2 percent monthly fall at year-end, orders rose a larger than expected 1.4 percent.

Asia Pacific

Weakness on Wall Street and disappointment over China's modest 2021 growth target undercut Asian shares Friday, with Japan's Nikkei down 0.2 percent and Hong Kong's Hang Seng off 0.5 percent. Australia's All Ordinaries declined 0.8 percent and China's Shanghai composite recovered to end flat.

Fed Chair Jerome Powell's statements Thursday dampened Asian markets after the Fed chief suggested the Fed was unlikely to intervene to rein in rising long-term interest rates, but follow-through selling was limited. Technology and other highly-valued growth stocks across Asia have lagged in response to rising long-term rates, which continued rising after the Powell comments.

Markets reacted negatively to news Friday that China was setting a relatively low above-6 percent growth target for 2021, including a tighter fiscal stance. Real estate stocks were hit by the Chinese government's warning against speculation in real estate. Later, Chinese technology stocks trimmed losses on news China would step up research and development.

In Japan, value stocks beat growth, with mining shares faring best, followed by utilities, transportation equipment, and banks, while real estate and services lagged. Chipmakers sold off, with Tokyo Electron down 2.5 percent. On the plus side, Toshiba, the industrial conglomerate, rose 6.1 percent on news Mizuho and Blackrock had taken a stake.

Growth/tech names led the selloff in Australian equities on rising bond yields. Liquified natural gas producers offset some of the declines elsewhere as they advanced with rising oil prices after OPEC+ left output unchanged.

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