Daily market review

United States

US stock indexes were mixed Wednesday as demand for mega-cap growth stocks on quarter-end rebalancing helped the NASDAQ outperform. The Dow Jones industrial average fell 0.3 percent, the S&P 500 rose 0.4 percent, and the NASDAQ gained 1.5 percent.

Strength in the FANMAG complex drove technology, consumer discretionary, and communications higher. Lagging were cyclicals/value, especially financials and energy. Consumer staples were relatively soft, and media remained under pressure with Viacom/CBS down another 3.2 percent on top of recent losses. Falling oil prices depressed energy stocks with ExxonMobil down 1.5 percent.

Among companies in the news, Boeing gained 1.1 percent on another big order for its 737 MAX airplane. Several companies rose on analyst upgrades including Apple up 1.9 percent, Harley-Davidson up 6.9 percent, Square up 6.8 percent, and Applied Materials up 5.4 percent. Walgreen's rose 3.6 percent after an earnings beat and higher guidance.

In US economic data, ADP estimated private payrolls will rise 517,000 in March's employment report which is right in line with Econoday's current consensus for a rise of 538,000.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell 36 cents to US$63.54 while spot gold rose US$24.40 to US$1,707.18. The US dollar eased vs. most major currencies. The US Treasury 30-year bond yield rose 3 basis points to 2.41 percent and the 10-year note yield rose 1 basis point to 1.73 percent.


As investors eye more lockdowns on the Continent, equities were flat to weaker Wednesday with banks soft on fallout from Archemos. The Stoxx 600 pan-European index eased 0.2 percent, the German Dax was flat, the French CAC slipped 0.3 percent, and the UK FTSE 100 was down 0.9 percent.

French President Macron Emannuel Macron was widely expected to announce new restrictions in a speech to the nation on Wednesday night, and Italy was expected to extend lockdowns to limit the spread of new Covid variants.

Banks lagged on fallout from the Archemos affair, followed by insurance, food & beverage, retail, basic resources, media, financial services, oil & gas, and autos. Utilities fared best, along with health care, telecom, and industrials. With European bond yields slightly lower, growth stocks traded better.

Among companies in the news, Deliveroo, the UK food delivery service, dropped 26 percent on its first day of public trading amid concerns over its labour practices. Home24, the German online shopping company, fell 10 percent on disappointing quarterly results. Credit Suisse fell 4.9 percent as its Archemos woes continued.

On the positive side, Grammer, the German auto components maker, rose 16 percent after raising its guidance. Steinhoff, the retailer, rose 4.5 percent as several institutional investors backed its proposed shareholder settlement. Bayer, the German chemicals conglomerate, rose 0.3 percent after saying it will sell its environmental science business.

In economic news, Eurozone inflation accelerated in March to a 1.3 percent annual flash rate that was up from February's final 0.9 percent; March is the strongest reading since January 2020 but still well short of the ECB's near-2 percent target.

Separately, UK GDP expanded by an upwardly revised 1.3 percent on the quarter at the end of last year, some 3 tenths higher than the provisional 1.0 percent rate. This raised annual growth from minus 8.5 percent to minus 7.3 percent, its best reading since the first quarter of 2020.

Asia Pacific

Asia/Pacific equities markets mostly declined Wednesday after a soft close on Wall Street and on rising US bond yields, but Australia managed gains on better Covid-19 news.

Late weakness on Wall Street and local earnings disappointments depressed Chinese markets. The Shanghai composite eased 0.4 percent, the CSI300 fell 0.9 percent, and the Hong Kong Hang Seng index was off 0.7 percent. Declines were nearly across the board, with materials and consumer staples off the most while utilities and telecom services held up best. Among companies in focus, China Minsheng Bank fell 4.2 percent on poor quarterly results.

Japanese shares slipped with the Nikkei 225 index down 0.9 percent and the broader Topix off 1.2 percent. Bank stocks faced continued selling pressure on the Archegos debacle. Mitsubishi UFJ Financial fell 3.9 percent after warning it will book a $270 million loss on Archegos. In other company news, Hitachi dropped 7.3 percent after saying it will buy GlobalLogic, the US software developer.

Australian shares outperformed with the All Ordinaries index up 0.7 percent as concerns receded over a lengthy lockdown in Brisbane. Reopening plays led the winners with shopping centers lifting real estate, and industrials up on strength in infrastructure and air transport. Grocery stores boosted consumer staples while travel stocks lifted consumer discretionary. A late selloff in commodity prices hit miners.

In economic news, Chinese PMI survey data suggest growth picked up in both the manufacturing and non-manufacturing sectors in March. The CFLP manufacturing PMI rose from 50.6 in February to 51.9 in March, above the consensus forecast of 51.0, while the non-manufacturing PMI surged from 51.4 to 56.3. Both are now at their highest levels since November.

Meanwhile, Japan's industrial production index fell 2.1 on the month in February, weakening sharply from the increase of 4.3 percent recorded in January and weaker than the consensus forecast for a drop of 1.3 percent.

Looking ahead*

On Thursday in Asia/Pacific, the following reports are scheduled: Japanese Tankan, Korean external trade, Korean PMI manufacturing, Japanese PMI manufacturing, Australian goods and services trade, and Chinese PMI manufacturing. In Europe, reports are due on German retail sales, Swiss CPI, Swiss retail sales, Swiss SVME PMI, plus monthly PMI manufacturing finals from France, Germany, the Eurozone, and the UK. In North America, US releases are scheduled for jobless claims, PMI manufacturing final, ISM manufacturing, and construction spending.

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