Daily market review

United States

Equities ended up Friday on positive US economic data and supportive earnings reports to hold onto another week of gains. Value/cyclicals outperformed Friday after a better showing for growth stocks this week. The Dow Jones industrial average rose 0.5 percent while the S&P 500 firmed 0.4 percent and the NASDAQ firmed 0.1 percent.

In US economic news, housing starts and permits both recovered more than expected in March, by 19.4 percent and 2.7 percent on the month, respectively, to annual rates of 1.739 million for starts and 1.766 million for permits. Meanwhile, consumer sentiment rose 1.6 points but the 86.5 level came in below Econoday's consensus range.

Among stock sectors, materials rose with help from an earnings beat at PPG, the paint company, up 8.7 percent; paint rival Sherwin Williams rose 3.8 percent in sympathy with PPG. Alcoa was another winner, up 8.4 percent after an earnings beat. Financials and utilities outperformed, with PNC Bank up 2.3 percent on an earnings beat, and utility Consolidated Edison up 1.3 percent.

On the downside, information technology and energy stocks lagged, with chipmakers giving back some of Thursday's rally, while declining oil prices weighed on drillers, including Haliburton, down 1.9 percent. Morgan Stanley fell 2.8 percent as its losses in the Archegos Capital fiasco obscured an otherwise remarkably positive quarter.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil declined 14 cents to US$66.72 while spot gold rose US$10.73 to US$1,775.67. The US dollar was mixed vs. major currencies. The US Treasury 30-year bond yield rose 4 basis points to 2.28 percent and the 10-year note yield rose 3 basis points to 1.58 percent.


Positive Chinese and US economic reports boosted European markets Friday, with German markets outperforming after strong auto earnings. The Europe-wide STOXX 600 gained 0.9 percent, the German DAX 1.3 percent, the French CAC rose 0.9 percent, and the FTSE-100 gained 0.5 percent.

A batch of Chinese data releases confirming the recovery remains under way, and more strong US housing sector figures bolstered risk appetite. News that Italy would loosen anti-virus restrictions was another positive. Separately, earnings beats from Daimler, up 2.9 percent and from Renault, up 2.3 percent, helped autos outperform, along with upbeat auto registration data.

Among other sectors, outperforming were banks, industrials, construction, retail, basic resources, and chemicals. Lagging were oil & gas, health care, utilities, food & beverage, and travel & leisure.

Among stocks in focus, Bank of Ireland rallied 8.2 percent on news it will buy KBC's Irish loan portfolio. L-Oreal, the French cosmetics leader, fell 1.8 percent as the market disliked its quarterly sales results.

Asia Pacific

Major equities markets mostly gained Friday on carry-over from Thursday's rally on Wall Street and with support from Chinese economic reports that were seen as generally positive.

Chinese markets perked up after publication of Chinese GDP figures. China's Shanghai composite rose 0.8 percent, and the CSI 300 firmed 0.4 percent while Hong Kong's Hang Seng rose 0.6 percent. Value stocks topped growth led by telecom and energy sectors.

Japanese markets edged up with a boost from a strong showing Thursday in US growth and momentum stocks. The Nikkei and the broader Topix index both rose 0.1 percent. Chip stocks outperformed, with Renesas up 2.5 percent.

Trading was limited by caution ahead of a summit meeting Friday between President Biden and Japanese Premier Yoshihide Suga. Investors have viewed the meeting in a negative light as Biden is expected to press Japan to adopt the US hard line against China, a big negative for Japanese capital goods makers who rely heavily on the Chinese market.

Australian equities were flat to better with the All Ordinaries index up 0.1 percent as the market held onto the week's gains. The reopening narrative remained dominant after a series of upbeat Australian economic indicators this week. On the negative side, vaccine worries continued as authorities probed the death of a woman who developed a blood clot after getting the AstraZeneca vaccine. Sectors were mixed, with real estate, technology, and gold producers better while financials, energy, and utilities lagged.

In economic data, China's economy expanded 18.3 percent on the year in the three months to March, picking up from growth of 6.5 in the three months to December and matching the consensus forecast. Separately, Chinese industrial production rose 14.1 percent on the year in March after surging 35.1 percent on the year for January and February combined. This is below the consensus forecast for growth of 17.2 percent.

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