Daily market review

United States

A split showing among sectors left major stock indexes mixed Friday after a somewhat disappointing US employment report. The Dow Jones industrial average was flat, the S&P 500 declined 0.2 percent, and the NASDAQ fell 0.5 percent.

Value stocks topped growth as another advance in oil prices helped energy stocks outperform. Rising bond yields on inflation concerns undercut growth stocks.

In economic data, monthly US employment figures showed a lower-than-expected increase in total nonfarm jobs, but private payrolls were closer to market expectations, and investors focused on a much larger than expected drop in unemployment and a big rise in hourly earnings.

Among sectors, financials outperformed as banks and credit card issuers rose on expectations for upbeat earnings next week. Consumer staples lagged on weakness in health & beauty products and in beverages. Health care lagged while utilities and real estate trailed.

Among companies in the news, Oshkosh, the truck maker, fell 5.0 percent after its revenues and profits missed expectations. Charter Communications, the telecom, lost 4.8 percent after an analyst downgrade. On the positive side, Momentive, the software firm, rose 9.6 percent on takeover talk. Plug Power, the battery maker, rose 4.2 percent on an analyst upgrade.

In US economic news, September nonfarm payrolls rose 194,000, a disappointing performance compared to the median expectation of 475,000. Private payrolls jumped 317,000 in the month, with a 123,000 drop in government jobs that led to the soft headline number. The jobless rate dropped by 4 tenths to 4.8 percent.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 13 cents to US$82.57 while spot gold rose US$1.13 to US$1,756.85. The US dollar was mostly weaker vs. major currencies but rose vs. the yen. The US Treasury 30-year bond yield rose 3 basis points to 2.16 percent and the 10-year note yield was up 3 basis points at 1.60 percent.


Equities were mostly lower Friday as worries about fallout from spiking fuel prices and stagflation talk mounted. The Europe-wide STOXX 600 and the German DAX both declined 0.3 percent, the French CAC declined 0.6 percent, and the UK FTSE 100 rose 0.3 percent.

Analysts raised doubts about Russia's ability to address the shortfall in European fuel needs. Investors fretted that rising energy costs would hit consumer spending while supply chain disruptions continue to hurt industrial activity. Bond yields rose on inflation fears. On the positive side, Italy and Spain flagged progress in controlling the spread of Covid-19.

Among sectors, best were oil & gas, autos & parts, banks, insurance, and basic resources. Rising oil prices propelled energy stocks but added to inflation worries. On the downside, technology, personal & household goods, industrials, utilities, retail, and chemicals lagged. Tech stocks were hurt by an uptick in bond yields.

Among companies in focus, Daimler rose 2.9 percent after an analyst upgrade. Anglo American, the miner, rose 1.7 percent after announcing a share buyback. On the downside, Zur Rose, the Swiss pharma, slipped 6 percent, and Unite Group, the UK student housing company, fell 4.6 percent on negative quarterly results.

Asia Pacific

Asian markets mostly tracked US markets higher Friday with mainland Chinese markets making a positive return from the long China Golden Week holiday.

China's CSI 300 index rose 1.3 percent and the Shanghai composite gained 0.7 percent, with support from better Chinese purchasers data and hopes for calmer US-China relations. On the downside, the outlook remained clouded by concern over the impact of Chinese fuel shortages and lack of clarity over the fate of China Evergrande and Fantasia Holdings after both missed large debt payments.

Hong Kong shares were mixed with the Hang Seng index ending up 0.6 percent.
Tech and financials advanced while property, health care, industrials, and energy stocks slipped. Tech giants Meituan, up 2.1 percent, and Alibaba, up 5.6 percent, led the winners. Their gains occurred despite People's Bank of China Governor Yi Gang's renewed warning that regulators are pressing ahead with plans to rein in big tech and fintech.

South Korea edged down in cautious trading ahead of the weekend with the KOSPI down 0.1 percent. Taiwan's Taiex index eased 0.4 percent.

Japanese equities rose in line with gains on Wall Street amid relief over better news on the US debt ceiling. The Nikkei 225 index rose 1.3 percent and the broader Topix gained 1.2 percent. Most sectors rose, paced by miners and automakers. Toyota, up 2.9 percent, was among the day's best performers, with help from a weaker yen.

Relief over the positive return of Chinese markets from a weeklong holiday boosted Australian shares, with the All Ordinaries up 0.9 percent. An uptick in iron ore prices lifted materials while energy stocks extended recent gains on rising prices for liquefied natural gas. Banks and retailers outperformed too. Real estate and industrials lagged, with Transurban, the toll road operator, down 1.6 percent.

In economic news, the Chinese purchasing managers index for services increased from 47.2 in August, its lowest since April 2020, to 53.4 in September, while the manufacturing PMI survey, released last week, showed an increase in its headline index from 49.2 to 50.0.

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