Daily market review

United States

The reopening trade and rising oil prices helped cyclicals firm while growth stocks sagged Monday. The Dow Jones industrial average rose 0.7 percent, the S&P 500 rose 0.3 percent, and the NASDAQ lagged with a dip of 0.5 percent.

Best performers included energy, materials, health care, and consumer staples. Oil prices boosted energy stocks, with oilfield services boosted by an upgrade at Barclays. Baker Hughes, the oil servicer, rose 8 percent. Materials rose on strength in paper and precious metals.

Health care got a boost from hospitals and pharma. BioNTech, the Pfizer vaccine partner, rose 11 percent as Europe moved toward approving use of its Covid vaccine for teenagers. Moderna, another Covid vaccine maker, rose 4 percent after announcing a deal with Gavi to provide more vaccines for global use.

On the downside, weakness in communications services, real estate, and consumer discretionary stocks dampened the gains. Technology lagged too on declines in chip stocks. Amazon, down 2.3 percent, and Tesla, down 3.5 percent, depressed consumer discretionary. Estee Lauder, the cosmetics giant, fell 7.9 percent on a revenues miss. In communications, Netflix declined 0.9 percent, Facebook was off 0.8 percent, and Google slipped 0.4 percent.

In US economic data, ISM's manufacturing index, at 60.7, came in below Econoday's consensus range but was still very strong. New orders in April came in at 64.3, indicating sharp growth but nevertheless down from March's vast 68.1 level.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 26 cents to US$67.51 while spot gold rose US$23.94 to US$1,792.09. The US dollar fell vs. most major currencies. The US Treasury 30-year bond yield was down 1 basis point at 2.29 percent and the 10-year note yield was down 2 basis points at 1.61 percent.


Strong economic data and positive company news lifted equities Monday. The Europe-wide STOXX 600 gained 0.6 percent, the German DAX gained 0.7 percent, the French CAC rose 0.6 percent, and UK markets were on holiday.

On the positive side was news the EU Commission recommended opening foreign travel to Europe, along with accelerating vaccinations across Europe. On the negative side were pandemic trends in Asia, especially India, where daily cases rose above 400,000.

Notable were comments from ECB Vice President Luis de Guindos, who told La Repubblica that if EU vaccination rates reach 70 percent by the summer, it will be time for the ECB to talk about tapering its asset purchases, a notable shift in tone. Still, De Guindos also warned that policy-makers must take care not to remove stimulus too soon.

Among sectors, best performers included autos, construction, utilities, retail, and industrials. Lagging were real estate, technology, banks, and financial services.

Companies in the news included Siemens Healthineers, the biotech, up 2.0 percent after raising its outlook due to strong demand for its Covid tests. Lufthansa was a winner, up 2.9 percent after announcing an expanded travel schedule. On the downside, DBV, the French biotech, fell 5.6 percent after an earnings miss.

In economic data, German retail sales expanded for a second successive month in March and by much more than expected. A 7.7 percent monthly rise was more than double the market consensus and the steepest since Covid restrictions were first imposed in March last year.

Asia Pacific

Asian equities markets were mostly weaker Monday, but activity was limited by holidays in mainland China and Japan.

Hong Kong's Hang Seng index slipped 1.3 percent to lag the region amid renewed worries over rising inflation and rising Covid cases. Most sectors declined, with financials, technology, and property lagging the most. Tech stocks remained under pressure from China's ongoing crackdown on e-commerce giants.

Among companies in the news, Ping An Insurance fell 2.5 percent after taking over troubled Founder Group, while HSBC fell 3.2 percent to give up some of last week's strong gains on upbeat earnings.

Korean markets declined, with the KOSPI 0.7 percent, as traders reacted cautiously after authorities partially lifted the ban on short-selling imposed during the pandemic. LG Chem, the battery maker, fell 2.7 percent, and LG Electronics was down 16 percent, while winners included Hyosung, the industrial conglomerate, up 8.2 percent after an earnings beat.

Australian equities outperformed Asia/Pacific Monday with the All Ordinaries index down 0.1 percent. Westpac, up 5 percent, led financials higher, but offsetting weakness in miners and technology left major averages nearly flat. Miners BHP, down 1.4 percent, and Rio Tinto, off 0.9 percent, reflected weak commodities prices.

India's markets were flat to down Monday on pandemic concerns, with the Sensex down 0.1 percent and the Nifty unchanged. Reliance Industries, the conglomerate, fell 1.8 percent to pace the decliners after a quarterly profits miss. Yes Bank, down 4.4 percent, was a notable loser after adding to its reserve against credit losses. More big bank results are due this week.

Looking ahead*

On Tuesday in Asia-Pacific, the following data releases are scheduled: Korean CPI, Australian goods & services trade, plus the Reserve Bank of Australia policy announcement. In Europe, the following releases are due: Swiss SECO consumer climate, UK M4 money supply, and UK PMI manufacturing. In North America, reports are scheduled on Canadian merchandise trade, US international trade in goods and services, and US factory orders.

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