Daily market review

United States

Equities were mixed Friday with growth stocks outperforming value. The Dow Jones industrial average declined 0.7 percent, the S&P 500 eased 0.1 percent, and the NASDAQ rose 0.8 percent.

Among sectors, holding up best were communications services, consumer staples, energy, and health care. Lagging were financials, industrials, and materials. Among financials, banks sold off along with US Treasuries after the Federal Reserve altered its supplementary leverage ratio, which had allowed banks to leave out holdings of US Treasuries in calculating their SLR. This leaves bank with an unpleasant choice of cutting Treasuries or need to raise capital.

Among companies in focus, Facebook rose 4 percent after CEO Mark Zuckerberg downplayed concerns over its differences over privacy with Apple. Meanwhile, JP Morgan fell 1.6 percent on the SLR switch, and Nike dropped 4 percent on disappointing sales results reflecting supply disruptions. Visa fell 6 percent on a report the Department of Justice is probing its business. On the positive side, Fedex rose 6 percent on an earnings beat.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$2.41 to US$64.60 while spot gold rose US$7.84 to US$1,742.81. The US dollar rose vs. most major currencies. The US Treasury 30-year bond yield declined 2 basis points at 2.44 percent while the 10-year note yield rose 1 basis point to 1.72 percent.


Covid worries and falling commodities prices depressed equities Friday, and European bond yields retreated. The Europe-wide STOXX 600 declined 0.8 percent and. the German DAX, the French CAC, and the FTSE-100 all fell 1.1 percent.

News that France would reimpose lockdowns in several regions hurt risk appetite, along with the ongoing slow pace of vaccinations in Europe.

Among sectors, worst off were banks, basic resources, retail, autos, telecom, industrials, construction, chemicals, travel, oil & gas, and personal & household goods. Holding up best were defensives – utilities and real estate – along with technology and health care.

Among companies in the news, Enel, the Italian electric utility, rose 3 percent, after affirming its dividend plans. Poste Italiane, the postal service, fell 1.1 percent on a poor reaction to its new strategic plan. Investec, the investment advisor, fell 9.3 percent on its annual trading update.

Asia Pacific

Rising US bond yields and a bad start to US-China diplomatic talks depressed Asian markets Friday along with another drop in commodities prices, plus follow-through from Wall Street's selloff in tech and other growth stocks.

China's Shanghai composite declined 1.7 percent while the CSI300 dropped 2.6 percent, with technology, real estate, consumer staples, and financials leading the selloff. Chinese investors are confronting tighter financing conditions and rising corporate defaults, especially in real estate, mining, and local government financing vehicles.

Hong Kong stocks tracked Mainland Chinese markets lower with the Hang Seng off 1.4 percent. Energy shares fell the most, followed by materials, and health care. Risk appetite suffered after US and Chinese officials quarreled openly, and after the US 10-year note yield jumped to 1.75 percent during the US hours.

Japanese stocks were mostly weaker on the tech-led US selloff, plus fallout from the Bank of Japan's decision to cap its ETF purchases and limit them to stocks traded on the Topix. The Nikkei fell 1.4 percent and the Topix firmed 0.2 percent. Big tech sold off, with Fanuc down 2.9 percent, and Tokyo Electron off 2.6 percent, while Softbank fell 2.5 percent and Fast Retailing, the heavily-weighted retailer, declined 6.1 percent.

Australian markets slipped on risk aversion and the drop in commodities prices, with the All Ordinaries index 0.6 percent. Miners and energy stocks led the declines, with Woodside Petroleum off 3.3 percent.

Markets also reacted poorly to unexpectedly weak Australian retail sales figures, with sales down 1.1 percent on the month in February, on lockdown effects, after increasing 0.6 percent in January, much weaker than the consensus forecast for an increase of 0.5 percent.

Global Stock Market Recap

Global Bond Market Recap

Global Currency Recap

Commodities and currencies

Looking forward