Daily market review

United States

Equities were narrowly mixed with a negative bias Tuesday as growth stocks gave up some of the previous day's gains. The Dow Jones industrial average and the S&P 500 both slipped 0.1 percent, and the NASDAQ was flat.

Materials and energy stocks lagged as metals, chemicals and oil prices were hurt by weak Chinese economic data. Health care lagged with pharma weak. Industrials lagged on weakness in machinery, transports, and building materials.

Among tech stocks, heavily-weighted Apple retreated 0.8 percent after rising 3 percent on Monday.

Real estate stocks fared best. Other outperformers included financials and communications services, with media and entertainment showing gains, including Comcast, up 1.6 percent.

Among other stocks in the news, Zoom, the online video meetings leader, fell 17 percent on disappointment over its quarterly results. Many analysts see the company falling back to earth when the pandemic wanes in the US.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell 27 cents to US$72.99 while spot gold rose US$4.04 to US$1,814.72. The US dollar was mixed vs. major currencies. The US Treasury 30-year bond yield rose 3 basis points at 1.93 percent and the 10-year note yield rose 2 basis points to 1.30 percent.

In US economic news, the Conference Board's consumer confidence index fell to 113.8 in August after a downwardly revised 125.1 in July, well below market expectations.


Hawkish ECB comments and an upside inflation surprise dampened European equities. The Europe-wide STOXX 600 declined 0.4 percent, the German DAX eased 0.3 percent, the French CAC declined 0.1 percent and UK FTSE-100 was down 0.4 percent.

Austrian central bank governor Robert Holzmann, a noted hawk, said the European Central Bank should start discussing phasing out its PEPP emergency asset purchase program. Earlier, the HICP inflation measure for the Eurozone hit a 10-year high of 3.0 percent annual rate for August, above expectations for a 2.8 percent rise.

Among sectors, travel and leisure stocks remained under pressure after the EU decision Monday to restrict nonessential travel from the US. EasyJet fell 1.7 percent. Meanwhile, weak Chinese economic data depressed mining and energy stocks, with BP down 1.8 percent.

Holding up best were utilities, technology, real estate, and household goods.

Among companies in the news, Danske Bank declined 3.6 percent after a downgrade at Nordea. Meanwhile, IAG, owner of British Airways, fell 2.7 percent and Lufthansa fell 1.9 percent on fallout from the EU announcement. On the positive side, Raven Property Group rose 15 percent after the UK-listed property manager announced a positive earnings surprise.

Asia Pacific

Asian equities markets were mostly higher Tuesday with Chinese markets recovering initial losses on hopes for monetary and fiscal policy support, and Japan bouncing back on better economic data.

Chinese equities were hurt by bad regional coronavirus news, negative regulatory headlines, and surprising declines in Chinese purchasers data, but the major equities indexes rebounded from their lows on expectations for policy help by year end. The CSI 300 declined 0.2 percent and the Shanghai composite rose 0.5 percent. Financials and energy stocks outperformed while technology, health care, and consumer staples lagged the most.

Hong Kong's Hang Seng outperformed to end 1.3 percent higher, with support from selected tech names, including Meituan, up 9 percent after a big revenues beat. Tencent, the online gaming leader, seesawed to end up 3.3 percent after initial losses after Chinese regulators imposed limits on the time children can spend playing online games.

South Korea markets rallied on strength in big tech stocks, with the KOSPI up 1.8 percent, as the market tracked Monday's Wall Street tech stock gains. Separately, Taiwan's benchmark Taiex gained 0.5 percent.

Better domestic economic data lifted Japanese stocks, with the Nikkei up 1.1 percent and the broader Topix up 0.5 percent. Risk appetite got a boost from news that Japanese industrial production fell less than expected in July from June – a decline of 1.5 percent, vs. the median economist forecast of a 2.5 percent drop. Also helping was news that unemployment dipped to 2.8 percent in July, below the expected 2.9 percent.

Australia's All Ordinaries ended up 0.5 percent with most sectors higher. Best were tech stocks, consumer staples, and health care. Lagging were banks, energy, and materials, with iron miners retreating after Monday's gains.

In economic data, China's official CFLP manufacturing PMI fell for the fifth consecutive month from 50.4 in July to 50.1 in August, its lowest since February 2020. The CFLP non-manufacturing PMI showed a much sharper deterioration into contraction territory, with its headline index falling from 53.3 in July to 47.5 in August, also the lowest since February 2020.

Looking ahead*

In Asia/Pacific, figures are due on the following: South Korean external trade, South Korean PMI manufacturing, Japanese PMI manufacturing final, Australian GDP, India PMI manufacturing, and Chinese PMI manufacturing. In Europe, the following are scheduled: German retail sales, Swiss PMI, French PMI manufacturing final, German PMI manufacturing final, Eurozone PMI manufacturing final, UK PMI manufacturing final, and Eurozone unemployment rate. In North America, US ADP employment, US PMI manufacturing final, US ISM manufacturing, and US construction spending reports are on tap.

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