Daily market review

United States

Renewed demand for technology and growth stocks gave equities a boost Thursday along with US fiscal stimulus and better US employment data. The Dow Jones industrial average rose 0.6 percent while the S&P 500 gained 1.0 percent, and the NASDAQ gained 2.5 percent.

As the recent rise in bond yields faltered, heavily-weighted tech and communications mega-caps were back in favor: Apple up 1.7 percent, Facebook up 3.4 percent, Alphabet up 2.9 percent, Microsoft up 2.0 percent, and Netflix up 3.7 percent.

News that the European Central Bank would step up its asset purchases added to positive sentiment on the rate outlook, along with well received US Treasury auctions during the week. Also positive were reports of diplomatic efforts to restore US-Chinese relations, including a meeting scheduled next week in Alaska.

Amazon, up 1.8 percent, led consumer discretionary stocks higher. Crude oil prices gave energy stocks a boost. Higher long-end yields helped banks but other financials weakened. Materials and health care lagged, and industrials were depressed by a selloff in General Electric, which fell 7.4. percent after disappointing comments during its call with analysts. Worst off were consumer staples.

Among companies in the news, Oracle fell 6.5 percent after the software giant reported disappointing revenue growth in its cloud business, and Cloudera, another software leader, fell 12.6 percent on soft guidance. AstraZeneca, the pharma, fell 2.3 percent after Denmark suspended use of its Covid-19 vaccine. On the positive side, Bumble, the online dating app, jumped 11 percent after a revenues beat. Boeing rose 2.7 percent on reports of a big pending sale to Southwest Airlines.

In US economic news, weekly jobless claims fell 42,000 to 712,000, coming in at the low end of forecasts. In other positive employment news, job openings rose 2.4 percent in January to 6.917 million for the second straight strong gain.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$1.52 to US$69.70 while spot gold declined US$1.61 to US$1,723.50. The US dollar fell sharply vs. major currencies. The US Treasury 30-year bond yield rose 4 basis points at 2.28 percent while the 10-year note yield rose 1 basis point to 1.53 percent.


Equities edged up Thursday after the European Central Bank left its policy settings unchanged but accelerated the pace of its asset purchases to push back against rising bond yields. The Europe-wide STOXX 600 rose 0.5 percent, the German DAX and FTSE-100 both firmed 0.2 percent, and the French CAC rose 0.7 percent.

Among sectors, best performers were travel & leisure, technology, basic resources, utilities, oil & gas, telecom, retail, industrials, real estate, personal & household goods. Lagging were banks, autos, food & beverage, health care, and chemicals.

Among companies in focus, automaker BMW fell 4.2 percent and JCDecaux, the French media business, fell 4.8 percent on disappointing quarterly results and dividend cuts. HSBC fell 4.7 percent after announcing it would wind down coal funding. On the positive side, Adidas, the sportswear business, gained 2.9 percent on upbeat guidance, and Savills, the real estate broker, rose 8 percent on an earnings beat.

Asia Pacific

A good showing on Wall Street Wednesday and better Chinese economic data helped most major Asian markets advance Thursday, with Chinese markets leading.

China's Shanghai composite rallied 2.4 percent while the CSI300 popped up 2.5 percent after Chinese bank lending fell less than expected, and Chinese sales of autos and smart phones jumped in February. New bank lending in China fell to CNY1.36 trillion, well above expectations for roughly 1 trillion.

Markets were bolstered by expectations for supportive comments from Chinese Premier Li Keqiang on economic policy at the close of parliamentary meetings Thursday. Investors also focused on news confirming that top US and Chinese diplomats would meet in Alaska, and a report that industry associations for US and Chinese chipmakers were looking at ways to cooperate.

Among sectors, consumer staples, financials, and health care outperformed.

Hong Kong tracked Mainland Chinese markets higher, with the Hang Seng up 1.7 percent, with information technology leading, followed by energy, while financials and property shares lagged.

Bargain-hunting helped Japanese equities edge up Thursday with the Nikkei share average up 0.6 percent and the Topix up 0.3 percent, with help from passage of the US stimulus package. Sectors were mixed with growth and value near even. Marine transportation led the winners, with Kawasaki Kisen up 13 percent. Banks, construction, metals, and utilities also outperformed. Chipmakers lagged, and medical equipment maker Terumo was off 2.2 percent.

Australian markets ended nearly flat after retracing early gains, with the All Ordinaries index up 0.1 percent. Worries about the pace of Australia's vaccination program weighed on sentiment. Sectors were mixed, with travel companies better on news of a government subsidy for domestic travel, while big banks dropped and fintech AfterPay was off 3.7 percent.

Looking ahead*

On Friday in Asia. Indian CPI and industrial production reports are due. In Europe, German CPI, UK industrial production, UK merchandise trade, UK monthly GDP, Italian unemployment, and Eurozone industrial production reports are scheduled. In North America, US PPI-FD, US consumer sentiment, and Canadian labour force survey figures are due.

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