Daily market review

United States

Dip buying in growth and momentum stocks led a broad-based rally in equities Monday, with reopening cyclical stocks also seeing good gains. The Dow Jones industrial average rose 0.5 percent, the S&P 500 gained 1.0 percent, and the NASDAQ advanced 1.4 percent.

Big tech stocks, including Microsoft, up 2.3 percent, and Apple, up 1.3 percent, led the market higher, with chipmakers especially strong including Applied Materials, up 4.6 percent after an earnings beat and strong guidance, and Intel, up 1.6 percent. Internet giants led communications services, with Google up 2.6 percent, and Facebook up 2.6 percent. A decline in long-term US Treasury yields helped these growth stocks outperform.

Among reopening stocks, airlines and cruise lines advanced, with United Airlines up 1.5 percent, and Carnival, the cruise line, up 2.7 percent. Consumer discretionary perked up, with Amazon up 1.3 percent, and Starbucks up 1.4 percent. Speculative crypto stocks bounced after another big drop over the weekend, with Coinbase, the crypto exchange, up 0.4 percent.

Among companies in focus, Virgin Galactic rocketed 28 percent after the successful test flight of its space ship over the weekend. Beyond Meat, the food company, rose 10 percent after an upgrade at Bernstein. On the downside, NGM Biopharmaceuticals dropped 41 percent on poor clinical trial results. Dollar General fell 3.9 percent on a downgrade at BankAmerica.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$1.78 to US$68.46 while spot gold rose US$2.24 to US$1,882.69. The US dollar declined vs. most major currencies. The US Treasury 30-year bond yield was down 2 basis points at 2.31 percent and the 10-year note yield eased 1 basis point to 1.61 percent.


Growth and technology stocks led European markets higher with trading limited by holidays in Germany, Austria, and Switzerland. The Europe-wide STOXX 600 firmed 0.1 percent, the French CAC rose 0.4 percent, and the UK FTSE 100 was up 0.5 percent.

Reports suggesting the UK was likely to proceed with its planned reopening on June 21 and that vaccines were working well against worrisome Covid-19 variants were supportive, along with comments from ECB President Christine Lagarde which appeared to downplay prospects for near-term tapering in asset purchases. Notable weakness in industrial metals stemmed from Chinese steps to limit speculative behavior.

Among sectors, best were travel & leisure, technology, real estate, media, financial services, and construction. Lagging were utilities, insurance, basic resources, banks, health care, food & beverage, and oil & gas.

In company news, Hilton Food Group rose 0.3 percent after positive trading results, and Cineworld Group rose 3.2 percent after surprisingly strong recent ticket sales and a positive outlook. On the downside, Kainos, the software company, fell 2.3 percent on a revenues miss. Energean, the natural gas driller, fell 3.8 percent on an earnings miss.

Asia Pacific

Asia/Pacific markets managed modest gains Monday as investors eyed better global economic data and Friday's strong showing for value/cyclicals on Wall Street, but falling commodities prices and a selloff in crypto stocks limited the advance.

Chinese markets edged up with the Shanghai composite up 0.3 percent and the CSI 300 up 0.4 percent. The market tracked US equities higher at the open but retreated later on more news of Chinese regulatory crackdowns on speculators in commodities and cryptocurrencies, including bitcoin mining. Technology and consumer staples outperformed while health care and utilities lagged.

Taiwan's Taiex tracked Chinese markets with a gain of 0.2 percent. Hong Kong's Hang Seng index eased 0.2 percent, paced by a selloff in materials and crypto. Among stocks in focus, CSPC Pharmaceutical rose 4.4 percent on an earnings beat and Luye Pharmaceutical rose 3.4 percent after sales of its dementia medication moved forward in Europe.

Japanese equities firmed, with the Nikkei up 0.2 percent and the broader Topix up 0.4 percent, with support from Friday's strong purchasing managers figures from Europe and the US. Value stocks beat growth, with most sectors higher. Marine and air transportation stocks outperformed along with banks, while lagging were pharma and communications services. On the positive side, vaccinations picked up momentum in Japan, but case counts remain high and the government was expected to extend the state of emergency across many regions, including Tokyo, Hokkaido, Osaka, and Kyoto.

Australia's All Ordinaries rose 0.2 percent as health care and energy stocks rose, while other commodities dropped, including iron ore and copper, after China warned companies against commodities hoarding and other speculative behavior. Biotech helped health care outperform while rising crude oil prices drove energy stocks higher. Retail stocks supported consumer discretionary while banks and insurers boosted financials. Materials fell on the selloff in iron and copper. Technology steadied after last week's rebound in buy-now-pay-later stocks.

Looking ahead*

On Tuesday in Asia/Pacific, Singaporean GDP and industrial production reports are due for release. In Europe, reports are due on UK public sector finances, UK CBI distributive trades, German GDP, and German Ifo survey. In North America, US Case Shiller home prices, US FHFA house prices, US new home sales, US consumer confidence, and Richmond Fed manufacturing reports are scheduled.

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