Daily market review

United States

Equities traded mixed to marginally higher Friday with growth and value shares both about flat as the market consolidated headed into the weekend. The Dow Jones industrial average rose 0.1 percent, the S&P 500 gained 0.2 percent, and the NASDAQ firmed 0.4 percent.

Growth stocks outperformed on the week, with good gains Thursday after US yields fell despite another hot inflation reading. The Fed's consistent message that inflation pressures are peaking appeared to shield investors from inflation concerns. Beyond that, analysts considered the prospect that the reopening trade and growth may also have peaked.

Among sectors, financials improved Friday after lagging the most through the week on declining interest rates. Tech stocks were bolstered Friday by strength in software and hardware stocks, with Apple up 1.0 percent. Consumer discretionary bounced back with help from homebuilders and retail after weakness Thursday. Industrial metals lifted materials.

On the downside, energy stocks lagged as oil majors sagged despite rising oil prices, with ExxonMobil down 1.0 percent. Consumer staples were soft. Megacap internets weighed on communications services, with Google down 1.0 percent. Health care lagged the most as pharma receded after rising this week, with Pfizer down 1.3 percent.

Among companies in focus, AMC Entertainment jumped 15 percent after a credit upgrade at S&P. Magnachip Semiconductor rose 12 percent on reports it received an acquisition offer from Cornucopia Investment Partners. On the downside, Curis, the biotech, dropped 37 percent after disappointing clinical trial results. Chewy, the pet food business, fell 5.8 percent after a revenues miss.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 18 cents to US$72.59 while spot gold fell US$20.85 to US$1,876.89. The US dollar rose vs. most major currencies. The US Treasury 30-year bond yield rose 1 basis point at 2.14 percent and the 10-year note yield rose 1 basis point to 1.45 percent.


Equities advanced Friday with miners leading. The Europe-wide STOXX 600 gained 0.7 percent, the German DAX and the French CAC both rose 0.8 percent, and the UK FTSE 100 was up 0.7 percent.

Markets appeared to accept the relatively muted US market reaction to US inflation figures, and the view that inflation worries have been exaggerated. At the same time, some analysts said highly-valued cyclicals/value sectors suggest limited scope for the reopening trade.

Among sectors, miners advanced as industrial metals prices recovered. BHP, the iron mining leader, rose 1.4 percent. Travel and leisure rebounded, with a boost from Spanish hotel chain Melia, which rose 2.0 percent after its CEO predicted a return to profitability in June. Other outperformers included autos & parts, financial services, utilities, and technology. Lagging were real estate, banks, food & beverage, chemicals, and telecom.

Among companies in focus, Electricite de France, the utility, rose 3.1 percent on reports it will divest its gas pipeline unit. Gulf Keystone Petroleum gained 6.4 percent on better production guidance. On the downside, Naked Wines fell 6.1 percent on an earnings miss. Morphosys, the German pharma, fell 4.2 percent on an analyst downgrade.

Asia Pacific

Asia/Pacific equities were mixed Friday in muted pre-weekend trading with Korea and Taiwan outperforming while mainland Chinese markets lagged.

Mainland Chinese markets weakened with the CSI down 0.9 percent and the Shanghai composite off 0.6 percent. Growth shares trailed value as Chinese investors appeared to take hot US inflation figures more seriously than the US market. Tech and telecom shares lagged. Financials and consumer goods stocks were also weak, with highly-valued liquor stocks seeing long liquidation headed into a three-day weekend.

Hong Kong held up better, with the Hang Seng index up 0.4 percent, paced by gains in energy and technology shares. Korea's KOSPI rose 0.8 percent to lead Asian markets on a boost from big tech, including chipmaker SK Hynix, up 4.1 percent, and battery maker LG Chem, up 5.3%. Taiwan's Taiex rose 0.3 percent, with TSMC up 0. 5 percent.

Japanese equities were mixed with the Nikkei flat and the broader Topix down 0.1 percent as growth stocks topped value, in line with Thursday's showing on Wall Street. Most sectors weakened, with financials, machinery, and transportation equipment lagging. Pharma and shipping stocks held up best.

Australian markets edged up , with the All Ordinaries index up 0.2 percent, with tech stocks and mining stocks leading, with support from declining bond yields after the US inflation report. Most sectors rose, with biotech outperforming along with tech and materials. Among tech shares, Afterpay, the buy-now-pay-later stock, rose 3.7 percent, while gold miner Newcrest rose 3.1 percent. Lagging were gambling stocks, airlines, property, and infrastructure. Financials suffered from lower interest rates.

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