Daily market review

United States

Equities ended narrowly mixed Monday with sentiment hurt by fear of slowing growth stemming from disappointing Chinese economic data and supply disruptions due to anti-Covid restrictions in Asia. The Dow Jones industrial average and the S&P 500 both rose 0.3 percent, and the NASDAQ fell 0.2 percent.

Equities appeared due for profit-taking and consolidation after setting a series of new highs over several months, with minimal correction. Defensive sectors held up best, including health care, including pharma and hospitals.

Cyclicals lagged, paced by energy, on oil price declines. Materials suffered from losses in industrial metals on global growth worries. Reopening plays, including restaurants and travel & leisure, were notably weaker on Covid worries. Tesla, down 4.3 percent, depressed consumer discretionary stocks.

Growth stocks outperformed, with tech stocks leading, as Apple rose 1.4 percent, and Microsoft gained 0.6 percent. Among health care leaders, CureVac, the vaccine maker, rose 0.6 percent after reporting favorable data on its second-generation mRNA Covid vaccine candidate.

Among other companies in focus, Tesla slipped after news of a US investigation into its autopilot system after crashes. Oatly, the oat-milk leader, lost 2.6 percent after an earnings miss in its first report as a public company. T-Mobile fell 2.9 percent on news of a hack into its client information. On the positive side, Sonos, the luxury sound system company, jumped 4.7 percent on a favorable patent ruling. Children's Place, the children's clothing company, rose 1.7 percent on an analyst upgrade on expectations for a strong back-to-school season.

In US economic news, New York Fed's Empire State survey of manufacturing put its business conditions index at 18.3 in August after 43.0 in July. A precipitous drop was not unexpected by forecasters after the jump in the index in the prior month. Although the reading was at the low end of expectations, it should not be a major disappointment.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell 49 cents to US$69.70 while spot gold rose US$9.01 to US$1,787.63. The US dollar weakened vs. the safe-haven yen and Swiss franc, but rose vs. most other major currencies. The US Treasury 30-year bond yield eased 1 basis point to 1.92 percent and the 10-year note yield fell 2 basis points to 1.27 percent.


Poor Chinese economic data, global pandemic worries, and the fall of Kabul to the Taliban depressed risk assets Monday while defensive plays held up best. The Europe-wide STOXX 600 fell 0.5 percent, the German DAX declined 0.3 percent, and the French CAC fell 0.8 percent. The UK FTSE 100 was down 0.9 percent.

Among sectors, commodity-linked stocks lagged the most as the Chinese industrial output and retail sales figures pointed to lower demand for oil and other commodities. Luxury goods makers also suffered on the poor Chinese economic reports, with Kering down 4.7 percent and LVMH off 2.1 percent. Travel & leisure stocks fell back as the reopening trade took another hit, with Ryanair down 1.1 percent. Lufthansa fell 3.3 percent after Germany announced plans to sell its stake. Other cyclicals lagged.

On the positive side, outperforming were defensives -- health care, food & beverage, real estate, and utilities. Siemens Healthineers, the German medical technology company, rose 0.4 percent after positive comments from its CEO.

Asia Pacific

Covid-19 worries, slowing Chinese growth, and focus on Chinese regulatory crackdowns weakened Asian markets again Monday.

Chinese markets were mostly lower after worse-than-expected Chinese economic data and the partial closure of a port facility due to a worker's positive Covid test. The CSI 300 declined 0.1 percent and the Shanghai composite was unchanged. Losses were tempered by expectation of more policy support, and a generous provision of liquidity from the People's Bank of China in its routine open market operations.

Renewed worry about wider Chinese government crackdowns on tech businesses hurt the Hong Kong market, along with unexpectedly weak Chinese economic reports. The Hang Seng fell 0.8 percent after a Chinese media commentary criticized online games. Tencent fell 3.5 percent, Netease lost 3.9 percent, and Kuaishou fell 6.8 percent.

South Korea extended its recent downtrend with the KOSPI down 1.2 percent. The country continues to reel from rising Covid cases, and spillover from slowing Chinese growth. Separately, Taiwan's benchmark Taiex declined 0.7 percent.

Negative Covid-19 headlines and plans to extend restrictions to more regions drove Japanese markets down with the Nikkei and the broader Topix both down 1.6 percent. News of the fall of Kabul to the Taliban added to risk-off sentiment. Declines were nearly across the board, with transportation equipment, pulp & paper, warehousing, banks lagging the most. The stronger yen after the dollar weakened on a poor US consumer sentiment report depressed Japanese exporters, including Toyota, down 1.5 percent, and Sony, down 2.2 percent.

Disappointing company earnings, bad Covid news, and soft Chinese economic data weighed on Australian markets with the All Ordinaries index down 0.6 percent. Lagging were energy, banks, miners, retailers, and travel operators. On the positive side, consumer staples fared best, along with real estate.

In Chinese economic data, industrial production rose 6.4 percent on the year, down from the 8.3 percent increase in June and below the consensus forecast for an increase of 7.9 percent. Chinese retail sales rose 8.5 percent on the year, also down from the 12.1 percent increase in June and below the consensus forecast for an increase of 11.5 percent.

Looking ahead*

In Asia/Pacific, Singapore merchandise trade and Reserve Bank of Australia meeting minutes are due for release. In Europe, UK labour market and Eurozone GDP flash reports are scheduled. In North America, Canadian housing starts, US retail sales, US industrial production, US business inventories, and US housing market reports are on tap. Plus, Fed Chair Jerome Powell will speak.

Global Stock Market Recap

Global Bond Market Recap

Global Currency Recap

Commodities and currencies