Daily market review

United States

Equities edged down from recent highs amid profit-taking Monday, with growth and momentum plays lagging the most. The Dow Jones industrial average eased 0.4 percent while the S&P 500 fell 0.5 percent, and the NASDAQ dropped 1.0 percent.

The drop in cryptocurrencies over the weekend and losses in special purpose acquisition companies (SPACs) slowed the pullback in risk appetite after a run of extraordinary gains. Technology stocks also weakened, with chipmakers Nvidia down 3.5 percent and Qualcomm down 2.1 percent.

Tesla, the momentum favorite, fell 3.4 percent to lead consumer discretionary shares lower, after news of a crash involving one of its self-driving cars. Industrials were dragged down by declines in airlines and truckers. On the positive side, materials rose on strength in chemicals. Pharma and managed care lifted health care. Consumer staples rose, with beverages and drug stores ahead. Energy held up best as oil servicers recovered some of Friday's losses.

Among companies in focus, Coca-Cola rose 0.5 percent after an earnings beat. Harley-Davidson rose 9.7 percent on an earnings beat and better guidance. GameStop rose 6.4 percent on news its CEO is stepping down. On the downside, Peloton dropped 7.3 percent after a regulator warned of dangers in using one of its treadmills.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 39 cents to US$67.11 while spot gold fell US$5.02 to US$1,770.65. The US dollar dropped vs. major currencies. The US Treasury 30-year bond yield rose 2 basis points to 2.30 percent and the 10-year note yield rose 1 basis point1 to 1.59 percent.


A weak start on Wall Street spilled over to European markets Monday, with major indexes flat to down amid profit-taking after good gains last week. The Europe-wide STOXX 600 eased by 0.1 percent, the German DAX slipped 0.6 percent, the French CAC firmed 0.2 percent, and the FTSE-100 was down 0.3 percent.

Among sectors, autos & parts lagged the most, along with technology, chemicals, industrials, oil & gas, food & beverages. Best were banks, retail, basic resources, health care, telecom, real estate, insurance, and utilities.

Weaker oil prices depressed energy stocks, and a strong pound weighed on UK exporters, with heavily-weighted Royal Dutch Shell down 1.1 percent. Among stocks in focus, Greenyard, the Belgian food processor, rose 4.9 percent after raising its earnings guidance.

ABN Amro, the Dutch bank, rose 2.3 percent after settling money-laundering charges with Dutch authorities, while Danske Bank of Denmark fell 2.4 percent after its CEO resigned in connection with the money-laundering case. Faurecia, the French auto parts supplier, fell 3.8 percent despite an earnings beat, and Melrose, the UK manufacturing conglomerate, fell 5.0 percent after announcing the sale of its Nortek unit.

Asia Pacific

Asian equities were mixed Monday with carry-over from Friday's strength on Wall Street offset by negative Covid-19 news from Japan, India, and elsewhere.

Chinese markets outperformed: the Shanghai composite rose 1.5 percent and the CSI 300 2.4 percent. The gains partly reflected relief that Chinese regulators said troubled Huarong Asset Management was liquid and operating normally, which suggested it would not default on its debt as the market had feared. Stock sector gains were nearly across the board with growth beating value stocks.

Hong Kong's Hang Seng rose 0.5 percent, with a mixed showing across sectors. Big tech stocks were hemmed in by the ongoing antitrust crackdown by Chinese regulators, with Alibaba off 1.5 percent. Industrials and health care stocks advanced on follow-through from last week's strong Chinese economic data releases.

Japanese markets were flat to weaker, with the Nikkei unchanged and the broader Topix index down 0.2 percent. Risk appetite was hit by rising Covid-19 case counts, and as Tokyo and Osaka considered fresh restrictions to clamp down on the pandemic. Among sectors, metals and sea transportation stocks outperformed, while lagging were banks, air and land transport, real estate, and mining.

Australian equities were mixed with the All Ordinaries index unchanged. Tech declined, paced by losses in buy-now-pay-later stocks, with lower oil prices dampening energy. Outperforming were materials led by rising iron and precious metals prices, along with consumer discretionary, with retailers better.

Travel stocks improved on the start of a travel bubble involving Australia and New Zealand, and the prospect that the quarantine-free travel zone may be extended to Singapore. Among stocks in the news, Orocobre, the lithium miner, rose 5.7 percent on news it will be acquired by miner Galaxy Resources, which rose 6.1 percent.

Indian markets dropped Monday as the Covid-19 situation worsened. The BSE Sensex and the Nifty 50 both fell 1.8 percent as more states announced lockdowns and concerns rose about recovery prospects. Among the day's worst performers was Power Grid, the electric utility, down 4.1 percent.

Looking ahead*

On Tuesday in Asia/Pacific, Reserve Bank of Australia meeting minutes are due, along with the Japanese Tertiary Index. In Europe, German PPI, UK labour market report, and the Eurozone ECB lending survey are scheduled. In North America, the weekly Redbook retail sales report is the only data release on tap.

Global Stock Market Recap

Global Bond Market Recap

Global Currency Recap

Commodities and currencies