Daily market review

United States

Positive company earnings and a supportive Federal Reserve policy backdrop helped equities firm Thursday, with value/cyclicals outperforming. Both the Dow Jones industrial average and S&P 500 rose 0.4 percent, and the NASDAQ was up 0.1 percent.

A rebound in Chinese markets after a nasty selloff earlier in the week bolstered sentiment. And in the US, GDP figures were mixed though investors noted that consumer spending was robust.

Among sectors, financials outperformed with banks leading. Rising metals prices boosted materials while transports and building products propelled industrials. Consumer discretionary got a boost from homebuilders, with Meritage up 12 percent after blowout earnings. Tech stocks were in line with help from Qualcomm, up 6 percent after an earnings beat.

Lagging were communications services, with Facebook off 4 percent despite strong results as it warned that revenue growth rates were likely to slow sequentially, given tough comparisons. Pharma stocks dragged down health care, with Merck off 1.4 percent as its sales of a key cancer treatment missed expectations.

Among companies in focus, Didi Global rose 11 percent on a Wall Street Journal report that it might go private. Ford Motor gained 3.8 percent on an earnings and revenues beat.

In US economic news, the advance estimate of second quarter GDP showed the pace of expansion little changed at up 6.5 percent after 6.3 percent in the first. Growth was driven by eager consumer spending. Personal consumption was up 11.8 percent and gave by far the largest lift to growth (7.78 percentage point contribution).

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$1.53 to US$76.10 while spot gold rose US$19.07 to US$1,828.96. The US dollar fell vs. most major currencies. The US Treasury 30-year bond yield rose 4 basis points to 1.92 percent and the 10-year note yield rose 4 basis points to 1.27 percent.


Recovering Chinese markets and rising commodities prices helped equities improve Thursday, along with a huge batch of upbeat earnings reports. The Europe-wide STOXX 600 and the German DAX both rose 0.5 percent, the French CAC gained 0.4 percent, and the UK FTSE 100 outperformed with a gain of 0.9 percent.

Cyclicals topped growth sectors, with risk appetite improving after Wednesday's dovish Fed policy announcement. Investors noted surprisingly upbeat Eurozone economic sentiment news Thursday, which underscored the recovery narrative, along with the rebound in Chinese markets.

Miners/materials advanced on rising commodities prices and strong results from ArcelorMittal, the steel and mining company, up 4.2 percent, and AngloAmerican, up 5.4 percent. Rising oil prices helped TotalEnergies rise 2.2 percent, and Royal Dutch Shell was up 3.8 percent, with the oil giant also topping earnings expectations and raising its dividend.

Earnings beats lifted many firms, with Danone, the French food giant, up 6.7 percent, STMicroelectronics, up 5.6 percent, and Nokia, the Finnish telecom, up 4.6 percent. On the downside, Anheuser-Busch fell 5.6 percent on an earnings miss, and Orange, the telecom, was off 3.3 percent after writing down its Spanish business. Credit Suisse fell 2 percent on more fallout from the Archegos affair.

In Eurozone economic news, the EU Commission's July survey was surprisingly upbeat. The measure of overall economic sentiment (ESI) climbed from 117.9 in June to 119.0, its sixth consecutive rise and a new record high.

Asia Pacific

Asian equities recovered Thursday with China leading after Chinese authorities reassured investors over their regulatory push that knocked down markets earlier in the week, and monetary authorities added more liquidity to Chinese financial markets.

On Thursday, China's CSI 300 rose 1.9 percent and the Shanghai composite gained 1.5 percent. Chinese securities regulators reportedly met with top investment bankers to reassure them that they were not seeking to de-link Chinese firms from US financial markets. Regulators reportedly pledged to proceed more deliberately with any new regulatory measures after their crackdown on Chinese online education businesses. Separately, Chinese state media said markets remained attractive and open to foreign investors.

Hong Kong rallied, with the Hang Seng up 3.3 percent, as education and tech shares recover from their dramatic selloff. Separately, Taiwan's Taiex index advanced by 1.6 percent as leading chipmakers were expected to benefit from heavy demand and shortages of semiconductors. Meanwhile, South Korea's KOSPI firmed 0.2 percent as worries over rising Covid-19 cases hurt risk appetite.

Steadier regional markets and a supportive Federal Reserve policy announcement helped Japanese markets improve. The Nikkei 225 index rose 0.7 percent and the broader Topix edged up 0.4 percent. Best sectors were shipping, electrical appliances, and instruments. Banks lagged, along with transportation equipment stocks.

Positive company news and recovering Chinese markets helped Australia's All Ordinaries index rise by 0.6 percent. Most sectors rose, paced by tech as buy-now-pay-later stocks outperformed. Other winners included iron miners, biotech, and travel. Lagging were real estate, utilities, and consumer staples.

Looking ahead*

In Asia/Pacific, releases are due on Hong Kong GDP, Korean retail sales, Korean industrial production, Japanese unemployment, Japanese retail sales, Japanese industrial production, Korean external trade, and Australian PPI. In Europe, French GDP flash, French consumer manufactured goods, French CPI, Swiss KOF leading indicators, German GDP flash, Italian GDP, Eurozone GDP, Eurozone HICP flash, Eurozone unemployment, and Italian CPI figures are scheduled. In North America, reports are due on the US employment cost index, US personal income and spending, Chicago PMI, US consumer sentiment, Canadian monthly GDP, and Canadian industrial product prices.

Global Stock Market Recap

Global Bond Market Recap

Global Currency Recap

Commodities and currencies