Daily market review

United States

Growth stocks, especially mega-caps, led US equities higher Thursday while value/cyclicals lagged as investors stuck with the recent trend, and US bond yields declined. The Dow Jones industrial average firmed 0.2 percent while the S&P 500 rose 0.4 percent, and the NASDAQ rose 1.0 percent.

Information technology and heavily-weighted mega-caps paced the advance, though communications services lagged. Microsoft rose 1.3 percent as it approached a $2 trillion valuation to join Apple, up 1.9 percent, already in that valuation category.

Among sectors, consumer discretionary and health care also outperformed, while lagging were financials and energy. Amazon rose 0.6 percent to lead consumer discretionary higher despite concerns over a vote over unionization in an Alabama warehouse.

Among companies in the news, Blink Charging rose 12.9 percent after announcing plans to deploy its chargers widely in New York City. Brightsphere Investment Group rose 10.7 percent on an upgrade at Morgan Stanley. Beyond Meat rose 3.5 percent after increasing its distribution.

In US economic news, initial jobless claims unexpectedly increased a further 16,000 to 744,000 in the week ended April 3, exceeding Econoday's consensus forecast of 680,000 and Econoday's consensus range of 650,000 to 705,000. The disappointment was reinforced by the fact that the previous week's level was revised higher to 728,000.

Fed Chair Jerome Powell's comments restated the Fed's familiar patient stance on the economy. Powell hailed recent strong economic indicators but said the recovery is uneven and incomplete and vowed continued monetary support "until the job is done."

Powell, addressing an International Monetary Fund Debate on the Global Economy, repeated that he and his fellow policy-makers on the Fed's Federal Open Market Committee want to see "actual progress" toward their goals of "maximum employment" and 2% average inflation – not merely forecasts. The Fed chief once again said he expects any increase in inflation to be "temporary," although he said the Fed would respond if above-target inflation were to prove "material" and "persistent."

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 29 cents to US$63.33 while spot gold rose US$22.87 to US$1,759.91. The US dollar declined vs. most major currencies. The US Treasury 30-year bond yield fell 5 basis points to 2.32 percent and the 10-year note yield fell 4 basis points to 1.64 percent.


The Fed's dovish stance and vaccine progress underpinned European equities Thursday. The Europe-wide STOXX 600 rose 0.6 percent, the German DAX rose 0.2 percent, the French CAC rose 0.6 percent, and the FTSE-100 was up 0.8 percent.

Best performers included personal & household goods, food & beverage, health care, utilities, technology, real estate, financials services, and industrials, while lagging were oil & gas, autos, insurance, banks, travel, chemicals, telecom, basic resources, media, and retail.

Among stocks in the news, Johnson Mathey, the chemicals manufacturer, rose 1.5 percent on its latest trading update. Anglo American, the miner, rose 3.2 percent on a restructuring of its South African operations.

Markets reacted favorably to news that German manufacturers' orders moved in line with expectations in February. A 1.2 percent monthly advance nearly matched the market consensus and, following a smaller revised 0.8 percent increase in January, means that orders have still only fallen once since resuming their recovery back in May 2020. The latest rise boosted annual growth to 5.6 percent.

Asia Pacific

Major Asian equities markets were mixed Thursday with Japan hurt by worries over rising Covid-19 cases, while rising commodities prices lifted Australia.

Chinese markets were mostly unchanged with the Shanghai composite up 0.1 percent and the CSI composite up 0.2 percent. Chinese growth stocks improved while value declined, with a mixed sector showing as materials and consumer staples outperformed while utilities and telecommunication services lagged.

Hong Kong outperformed, with the Hang Seng up 1.2 percent on across-the-board strength as investors reacted favorably to the Federal Reserve's continued accommodative stance. Old economy stocks, like garment maker Shenzhou International, up 9.2 percent, and insurer AIA, up 5.9 percent, were among the best performers,

Japanese markets retreated with value stocks lagging the most as the market was spooked by rising virus counts in Tokyo and Osaka and the prospect of renewed restrictions. The Nikkei eased 0.1 percent and the Topix was off 0.8 percent. Losses were widespread, with banks, textiles, utilities, and transports faring worst.

Miners led Australian stocks higher on an uptick in iron and precious metals prices, with the All Ordinaries index up 1.0 percent. In addition to materials, banks, insurers and fund managers outperformed. Gaming stocks led consumer discretionary while retailers and travel stocks fell back.

Among Asian companies in focus, Hitachi Metals rose 4.9 percent on news it will be acquired by Bain Capital. Kingboard Laminates, chemicals maker, rose 4.5 percent on an earnings beat. On the downside, GOME, the appliance retailer, fell 11.4 percent on news of a share offering. Takeda Pharmaceutical declined 3.1 percent after abandoning plans for a Covid-19 drug.

Looking ahead*

On Friday in Asia/Pacific, Chinese CPI and PPI figures are due. In Europe, reports are scheduled on Swiss unemployment, German industrial production, German merchandise trade, French industrial production, UK Halifax house price index, and Italian retail sales. In North America, US PPI-FD and US wholesale trade, plus the Canadian labour force survey is due.

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