Daily market review

United States

Strong equities gains late last week gave way to consolidation Monday with technology shares retreating. The Dow Jones industrial average eased 0.2 percent, the S&P 500 declined 0.3 percent, and the NASDAQ slipped 0.4 percent.

Megacaps, technology and other growth stocks lagged, with Apple down 0.9 percent, Microsoft off 1.2 percent, Facebook down 0.2 percent, and Nvdia off 0.5 percent. On the positive side, rising oil prices helped oil services companies Baker Hughes jump 4.8 percent and Marathon rose 3.8 percent.

Among sectors, growth lagged, with tech, communications services, and industrials underperforming. Homebuilders and restaurants weighed on consumer discretionary stocks, while financials were mixed, with credit cards holding up best. Health care was flat. Energy fared best, with big oil and oil services leading. Materials also outperformed, with industrial metals rising, and US Steel up 3.4 percent.

In M&A news, Discovery (down 5 percent) and AT&T (down 2.7 percent) said they would spin off and combine their media units to create a new entertainment company.

Among stocks in focus, United Airlines rose 2.3 percent after saying it will increase domestic capacity to meet rising bookings. Trip.com rose 3.8 percent after an upgrade at Morgan Stanley on hopes for a recovery in travel in China.

On the downside, Tesla fell 2.2 percent after founder Elon Musk denied his company had dumped its bitcoin holdings. UiPath, the newly public robotics software maker, fell 3.5 percent as analysts started coverage with cautious outlooks. NextEra Energy, the utility, fell 1.7 percent on an analyst downgrade.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$0.83 to US$69.54 while spot gold rose US$22.78 to US$1,866.21. The US dollar fell vs. major currencies. The US Treasury 30-year bond yield rose 1 basis point to 2.36 percent and the 10-year note yield rose 1 basis point to 1.64 percent.


Conflicting signals on the virus outlook left equities narrowly mixed Monday. The Europe-wide STOXX 600 and the German DAX both eased 0.1 percent, the French CAC edged down 0.3 percent, and the UK FTSE 100 was down 0.2 percent.

Worries about the spread in Europe of the variant identified in India, along with record case counts and lockdowns in Asia, undercut risk appetite. Weaker Chinese economic data and the Covid situation in Asia were negatives too. On the other hand, the market liked news that the UK was proceeding with its reopening plans, including allowing non-essential indoor shopping and drinking, while case counts and vaccinations have been moving in a favorable way in the US and Europe.

Among sectors, best were telecom, basic resources, health care, autos & parts, retail, and oil & gas. Lagging were travel & leisure, technology, industrials, construction, financial services, media, and banks.

Among companies in the news, Immunodiagnostic Systems jumped 47 percent on news the immune testing provider would be acquired by Perkin Elmer, which eased 0.3 percent.

Among other companies in the news, EasyJet fell 2.8 percent and Wizz Air declined 2.7 percent on concerns over Covid variants limiting travel. Among winners, Deutsche Telekom rose 2.8 percent on an upgrade at Barclays and Nordic Transport Group rose 4.6 percent on an earnings beat. Aumann, the German machinery company, rose 24 percent on upbeat guidance and orders.

Asia Pacific

Asian markets were mixed Monday with most markets lower on Covid worries while China outperformed after softer Chinese retail sales figures revived hopes for monetary policy support.

News that China's retail sales missed expectations helped restore expectations for continued accommodation from the People's Bank of China, with support from Monday's $15.5 billion PBOC injection of liquidity via its medium-term loan facility. Other Chinese economic indicators generally matched expectations for slowing activity in April from elevated levels earlier in the year. China's Shanghai composite rose 0.8 percent and the CSI 300 gained 1.5 percent. Gains were nearly across the board, with only financials weakening.

Hong Kong's Hang Seng rose 0.6 percent, with support from firmness in mainland China and from Wall Street strength in tech stocks. Best performers were tech and materials, with tech giants Meituan and Baidu up about 4 percent.

Taiwan's markets lagged Asia as the island tightened restrictions in the face of its worst Covid outbreak yet. The benchmark Taiex stock index dropped 3.0 percent. South Korea slipped too, with the KOSPI down 0.6 percent on Covid concerns.

Widening Japanese lockdowns and concerns about rising case counts and restrictions elsewhere in Asia dented Japan's equities, with the Nikkei off 0.9 percent and the Topix off 0.2 percent. Growth stocks led the declines while value sectors were mostly steady.

Australia ended marginally higher with the All Ordinaries up 0.2 percent after the market gave back early gains after the underwhelming Chinese economic data. Risk appetite was muted by rising restrictions on movement across much of Asia/Pacific on Covid worries. Growth outperformed with tech stocks bouncing back, while refiners led energy higher.

Looking ahead*

On Tuesday in Asia/Pacific, Japanese GDP and Reserve Bank of Australia meeting minutes are due for release. In Europe, reports are due on the UK labour market, Italian merchandise trade, Eurozone GDP, and Eurozone merchandise trade. In North America, the US housing starts and building permits report is scheduled.

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