Daily market review

US, Europe indexes nearly steady, Asia mixed

United States

US equities hovered in mostly narrow ranges for a second day Wednesday with a better showing for mega-caps in quiet, consolidative trading. The Dow Jones industrial average was flat while the S&P 500 firmed 0.2 percent and the NASDAQ eased 0.1 percent.

Markets appeared on edge before the release of Federal Open Market Committee minutes Wednesday afternoon amid concerns the recent run of strong economic results would lead to less generous policy, but the minutes showed policy makers had maintained their patient stance, and comments from other Fed policy makers Wednesday underlined their cautious view.

Among sectors, communications services, technology, and energy fared best. Lagging were materials, led down by chemicals, with industrials and health care weak too. Mega-caps outperformed, with Apple up 1.3 percent, Amazon up 1.7 percent, and Google up 1.1 percent.

Among companies in the news, travel stocks popped up after the Centers for Disease Control said cruises could resume in the summer; Carnival rose 1.4 percent and Royal Caribbean 0.3 percent. Rising oil prices helped energy stocks, with driller Haliburton up 0.8 percent.

Among materials, chemicals maker Albemarle declined 6 percent and Sherwin-Williams, the paint company, fell 2.8 percent amid profit-taking after recent strength.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 27 cents to US$63.04 while spot gold declined US$5.03 to US$1,737.04. The US dollar rose vs. most major currencies. The US Treasury 30-year bond yield rose 3 basis points to 2.36 percent and the 10-year note yield rose 1 basis point to 1.67 percent.

Europe

Equities were narrowly mixed Wednesday with the UK outperforming on a weaker pound and better Covid-19 news. The Europe-wide STOXX 600 and the German DAX both eased 0.2 percent, the French CAC was flat, and the FTSE-100 rose 0.9 percent.

Sentiment in Continental European markets was dampened by a more concerning Covid-19 picture and slower progress on vaccines, though expectations remain intact for vaccines to roll out across Europe in the second quarter. In contrast, markets see the UK on track for faster reopenings after positive comments from Prime Minister Boris Johnson on Monday.

AstraZeneca, down 1.2 percent, led health care stocks lower after European authorities warned of possible blood clotting from AstraZeneca's Covid-19 vaccine. Other laggards included technology, travel & leisure, chemicals, autos, and industrials. Holding up best were real estate, insurance, banks, basic resources, utilities, and oil & gas.

Among stocks in the news, French asset manager Amundi rose 2.9 percent after entering an agreement to buy rival asset manager Lyxor. Meanwhile, Royal Dutch Shell rose 1.2 percent on its first-quarter update. On the downside, IGAS energy, the UK driller, fell 5.5 percent on disappointing earnings, while Scandic Hotels declined 3.5 percent on an analyst downgrade.

Asia Pacific

Major Asian equities were mixed Wednesday on a quiet news day, with Covid-19 worries and more talk about policy tightening dampening Chinese markets while recovery expectations boosted Japan and Australia.

Chinese markets sagged with the Shanghai composite off 0.1 percent and the CSI composite down 0.7 percent. Speculation continued that China's recovery would spur more restrictive government policy, with sentiment also hurt by news of rising Covid case counts across Asia. Growth underperformed value, and sector performance was split with consumer staples lagging the most. Hong Kong markets sold off on their return from an extended holiday, with the Hang Seng down 0.9 percent. Tech stocks led the decline, with Lenovo down 4.1 percent and Tencent down 3.8 percent.

Japanese markets edged up as investors focused on hopes for global recovery, powered by US spending. The Nikkei was up 0.1 percent and the Topix up 0.7 percent. Most sectors rose, with value stocks beating growth. Materials, transport, and banks led the winners while pharma lagged the most.

Reopening hopes propelled Australian stocks on US fiscal stimulus and faster vaccine rollouts, with the All Ordinaries index up 0.6 percent. Gains were across the board, as technology stocks continued to rally and energy stocks recovered from recent declines. Consumer discretionary stocks rose on a rally in gaming stocks and as travel stocks climbed on news of a New Zealand-Australia travel bubble.

Among Asian companies in focus, Toshiba rose 18 percent after receiving a takeover offer from the UK's CVC Partners. Renesas, the Japanese chipmaker, rose 2.3 percent after announcing its plans to recover from a fire at one of its facilities. JD.com, the Chinese online retailer, fell 3.5 percent after pulling its fintech unit IPO. Korea's Samsung Electronics eased 0.6 percent after in-line results.

Looking ahead*

On Thursday in Asia/Pacific, Hong Kong PMI figures are due. In Europe, reports are scheduled for German manufacturers' orders, French merchandise trade, UK PMI construction, and Eurozone PPI. In North America, Fed Chair Jerome Powell is scheduled to speak, plus US jobless claims figures are due.

Global Stock Market Recap

Global Bond Market Recap

Global Currency Recap

Commodities and currencies

This document is issued by FIL Responsible Entity (Australia) Limited ABN 33 148 059 009, AFSL No. 409340 (“Fidelity Australia”).  Fidelity Australia is a member of the FIL Limited group of companies commonly known as Fidelity International.

Investments in overseas markets can be affected by currency exchange and this may affect the value of your investment. Investments in small and emerging markets can be more volatile than investments in developed markets.

This document is intended for use by advisers and wholesale investors. Retail investors should not rely on any information in this document without first seeking advice from their financial adviser. This document has been prepared without taking into account your objectives, financial situation or needs. You should consider these matters before acting on the information.  You should also consider the relevant Product Disclosure Statements (“PDS”) for any Fidelity Australia product mentioned in this document before making any decision about whether to acquire the product. The PDS can be obtained by contacting Fidelity Australia on 1800 119 270 or by downloading it from our website at www.fidelity.com.au. This document may include general commentary on market activity, sector trends or other broad-based economic or political conditions that should not be taken as investment advice. Information stated herein about specific securities is subject to change. Any reference to specific securities should not be taken as a recommendation to buy, sell or hold these securities. While the information contained in this document has been prepared with reasonable care, no responsibility or liability is accepted for any errors or omissions or misstatements however caused. This document is intended as general information only. The document may not be reproduced or transmitted without prior written permission of Fidelity Australia. The issuer of Fidelity’s managed investment schemes is FIL Responsible Entity (Australia) Limited ABN 33 148 059 009. Reference to ($) are in Australian dollars unless stated otherwise. 

© 2021 FIL Responsible Entity (Australia) Limited. Fidelity, Fidelity International and the Fidelity International logo and F symbol are trademarks of FIL Limited.

Share: