Daily market review

United States

Equities swung back after early losses to end better Thursday, with value/cyclicals outpacing growth stocks. The Dow Jones industrial average gained 0.6 percent, the S&P 500 rose 0.5 percent, while the NASDAQ edged 0.1 percent higher.

Risk appetite started the day weaker after Fed Chair Jerome Powell discussed scaling back asset purchases in an interview with National Public Radio. This was followed by news of a surprising drop in US jobless claims, which suggested a more rapid recovery and a less supportive Fed stance. But value stocks found buyers at the lows.

Congressional hearings about online disinformation weighed on internets, with Facebook down 1.2 percent, and consumer discretionary suffered as Amazon declined 1.3 percent.

Best performing were consumer staples, utilities, financials, materials, and industrials. Banks gave financials a boost as long-term yields perked up, while transports lifted industrials. Worst off were technology, communications services, and energy, with oil prices down.

Among companies in focus, Nike fell 3.4 percent after saying it would not source cotton produced in China's western region; the company has found itself subject to Chinese consumer boycotts in the US-China dispute over human rights practices in Xinjiang. Rite Aid dropped 20 percent after it downgraded its guidance. Viacom/CBS fell 5.4 percent on a downgrade at MoffettNathanson.

On the positive side, Darden Restaurants rose 8.3 percent after earnings and revenues beats. Restoration Hardware gained 9.1 percent on beats paced by the fix-your-home trade. Cisco Systems rose 1.7 percent on an upgrade at Goldman Sachs.

In US economic news, initial jobless claims fell 97,000 to 684,000 in the week ended March 20, a better showing than Econoday's consensus for 730,000. Claims had not been below the 700,000 mark since this time last year when they stood just under 300,000.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell US$2.25 to US$61.76 while spot gold fell US$7.26 to US$1,726.63. The US dollar rose vs. most major currencies. The US Treasury 30-year bond yield rose 4 basis points to 2.35 percent and the 10-year note yield rose 1 basis point to 1.63 percent.


Resurgent Covid-19 cases and slow progress on vaccines kept risk sentiment depressed Thursday, though markets recovered early declines to end nearly flat. The Stoxx 600 pan-European index declined 0.1 percent, the French and the German Dax both rose 0.1 percent, and the UK FTSE 100 slipped 0.6 percent.

UK stocks were hurt by weakness in big oil and miners, with Royal Dutch Shell off 2.9 percent and Glencore off 3.3 percent.

Among sectors, autos, chemicals, health care, and media held up best while lagging were oil & gas, real estate, basic resources, banks, retail, and technology.

Among companies in the news, Compass, the UK food service group, rose 1.1 percent on better results and guidance. AstraZeneca rose 0.9 percent on its latest clinical results for Covid treatments.

In economic data, the March German GfK survey confirmed an improvement in consumer sentiment this month and anticipated a more marked increase in April.

Asia Pacific

Asian equities were mixed Thursday with Chinese markets weaker on risk-off sentiment linked to an array of policy worries, plus another test firing of North Korean missiles. Japanese and Australian markets ended slightly better.

China's Shanghai index, the CSI300, and the Hong Kong Hang Seng index all eased 0.1 percent. Sentiment was dampened by disputes between the US and China over Xinjiang, which have led to Chinese consumers boycotting Nike and other western brands. Meanwhile dual-listed US-Hong Kong tech stocks fell on worries over delisting of Chinese firms in US markets over accounting practices. Talk of tighter Chinese economic policy remains an overhang for equities.

Bargain-hunting in cyclicals after recent declines gave Japanese shares a lift, offset in part by weakness in tech stocks. The Nikkei 225 Index rose 1.1 percent and the Topix rose 1.4 percent.

Weakness in the Australian dollar gave export-oriented Australian shares a lift, with the All Ordinaries up 0.1 percent. Health care stocks led winners, with biotech CSL up 1.4 percent. Banks and energy names outperformed too.

Looking ahead*

On Friday in Asia/Pacific, Singapore industrial production figures are scheduled. In Europe, reports are due on UK retail sales, German Ifo, and Italian business and consumer confidence. In North America, US international trade, personal income and outlays, US retail and wholesale inventories, and US consumer sentiment figures are on tap.

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