Daily market review

United States

Megacap growth stocks advanced Monday while value/cyclicals lagged as equities took on a more defensive stance after last week's advance. The Dow Jones industrial average slipped 0.2 percent, the S&P 500 rose 0.4 percent, and the NASDAQ gained 0.9 percent.

Consumer discretionary, tech, and communication services stocks outperformed, paced by Amazon, up 2.2 percent, Apple, up 3.0 percent, Microsoft, up 1.3 percent, and Facebook, up 2.2 percent, as investors opted for highly-liquid, downturn-resistant stocks. Investors focused on negative coronavirus coverage, and caution as the US faces an uncertain back-to-school period.

Lagging were materials, consumer staples, and industrials, with Boeing off 1.9 percent, as airlines were hit by the EU announcement that it would limit non-essential travel from the US in light of high US Covid-19 case counts.

Separately, attention focused on a new batch widely-shorted meme stocks, with Support.com, the technical support company, up 38 percent, and Vinco Ventures, the entertainment company, up 33 percent, as traders in online chatrooms talked up the stocks, along with more familiar meme plays, AMC, up 6.3 percent, and Gamestop, up 2.1 percent.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 65 cents to US$73.26 while spot gold fell US$8.16 to US$1,810.68. The US dollar was mixed vs. major currencies. The US Treasury 30-year bond yield was down 2 basis points at 1.89 percent and the 10-year note yield fell 4 basis points to 1.27 percent.


Equity sectors were mixed in quiet summer trading, with sentiment buoyed by Friday's advance after supportive comments from Fed Chair Jerome Powell. The Europe-wide STOXX 600 firmed 0.1 percent, the German DAX rose 0.2 percent, the French CAC rose 0.1 percent, and UK markets were on holiday.

Among the best performers were chemicals, technology, media, industrials, and retail. On the downside, insurance, banks, travel & leisure, telecom, and construction & materials lagged. Travel companies were hurt after the EU announced plans to limit nonessential travel from the US, due to the coronavirus. Lufthansa declined 1.8 percent and Air France slipped 1.5 percent.

Among other companies in the news, Adesso, the German IT services provider, rose 3.2 percent after topping earnings expectations. Adva Optical, the German telecom equipment provider, rose 9 percent after a buyout offer from Adtran, its US rival, which fell 17 percent. On the downside, Adevina, the Norwegian online marketplace, fell 1.6 percent after an earnings miss. KBC Bank declined 1.1 percent after confirming plans to sell non-performing mortgage loans.

Asia Pacific

A weaker dollar after a dovish message Friday from Fed Chair Jerome Powell helped most Asia equities markets improve Monday but coronavirus worries limited the gains.

Chinese markets were mixed, with financials weakening while defense and resource-oriented stocks ticked higher. The CSI 300 declined 0.3 percent, the Shanghai composite gained 0.2 percent, and Hong Kong's Hang Seng rose 0.5 percent, with big tech stocks leading, along with industrials and health care. Property stocks lagged, with China Vanke, the developer, down 7.0 percent after an earnings miss.

South Korea markets improved on relief over Powell's comments, with the KOSPI ending up 0.3 percent, with big tech stocks leading. Separately, Taiwan's benchmark Taiex rose 1.1 percent to outperform the region, with Taiwan Semiconductor up 1.0 percent to extend its recent advance.

Positive tone from Wall Street's strong showing Friday carried over to lift Japanese stocks, leaving the Nikkei up 0.5 percent and the broader Topix up 1.1 percent. Most sectors rose, led by iron & steel and shipping stocks, along with metals and mining shares. Banks and pharmas lagged but still managed gains.

Strength in iron miners and energy stocks helped Australia's All Ordinaries rise 0.4 percent. Most sectors declined, with travel operators depressing consumer discretionary stocks, banks weighing on financials, and tech stocks down after disappointing results from software makers Nuix, down 11 percent, and Altium, down 14 percent.

Looking ahead*

In Asia/Pacific, figures are due on the following: Indian GDP, Korean industrial production and retail sales, Japanese unemployment rate and industrial production, plus Chinese manufacturing PMI. In Europe, the following are scheduled: French consumer manufactured goods spending, French CPI, French GDP, French PPI, Germany unemployment rate, Italian GDP, UK M4 money supply, Eurozone HICP, Italian CPI and Italian PPI. In North America, Canadian monthly and quarter GDP, US Case Shiller home prices, US FHFA home prices, Chicago PMI and US consumer confidence reports are on tap.

Global Stock Market Recap

Global Bond Market Recap

Global Currency Recap

Commodities and currencies