Daily market review

United States

Equities slipped Monday with the market giving up early modest gains in holiday-thinned trading. The Dow Jones industrial average and S&P 500 both declined 0.7 percent, and the NASDAQ declined 0.6 percent.

The absence of US Treasuries trading due to the Columbus Day holiday, and many traders taking the day off, left the market to drift up in the morning and retreat in the afternoon on not much news.

Among sectors, utilities lagged while analyst downgrades in media stocks depressed communications services. Financials were weak as big banks retreated. Holding up best were tech stocks. Materials outperformed on a rally in iron and other industrial metals prices. Rising oil prices led energy higher.

Among companies in focus, Comcast fell 4.5 percent on an analyst downgrade. Southwest Airlines lost 4.2 percent after heavy flight cancellations over the weekend. On the positive side, Dutch Brothers, the coffee shop chain, jumped 15 percent after analyst upgrades, and SoFi Technologies, the fintech, advanced 13 percent after strong guidance and an analyst recommendation.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$1.00 to US$83.57 while spot gold fell US$3.04 to US$1,753.81. The US dollar rose vs. most major currencies. US Treasuries did not trade during the US hours.


Equities recovered early losses Monday on big gains in natural resources stocks. The Europe-wide STOXX 600 firmed 0.1 percent, the German DAX fell 0.1 percent, the French CAC rose 0.2 percent and the UK FTSE 100 gained 0.7 percent.

A rally in iron ore and other metals, alongside gains in oil and other commodities, helped UK markets outperform. BHP, the mega-miner, rose 3.2 percent, and Rio Tinto gained 3.6 percent in London trading.

Among other sectors, autos & parts, oil & gas, and banks outperformed. On the downside, utilities, travel & leisure, retail, tech, industrials, and construction & materials lagged.

Banks got a boost as hawkish Bank of England comments and rising commodities pushed bond yields higher, with UK markets leading. Michael Saunders, a BOE policy council member, was quoted as saying consumers should prepare for near-term rate increases to cope with higher inflation.

Asia Pacific

Asian markets were mostly better Monday with Japan and Hong Kong outperforming on strength in tech stocks while Australia and mainland Chinese markets were mixed.

Hong Kong's Hang Seng index rallied 2.0 percent after news that Chinese regulators ended their antitrust probe into Meituan with a lower-than-expected $534 million fine, which sent the online platform up by 8.4 percent. Other tech giants advanced too, with Tencent up 3.0 percent and Alibaba up 8.0 percent, on relief and expectation that the regulatory crackdown was easing.

China's CSI 300 index firmed 0.1 percent and the Shanghai composite was unchanged, with telecom and energy leading while health care and utilities weakened. Chinese market sentiment was hurt by uncertainty over the property sector and concern over the ongoing energy crunch.

Reopening hopes based on lower Covid-19 numbers, plus a weaker yen (which supports exporter profits), lifted Japanese equities as the market extended its recent recovery. The Nikkei 225 index rose 1.6 percent and the broader Topix gained 1.8 percent. Airlines, miners, banks, and automakers led the winners.

A mixed sector showing left Australian shares slightly lower, with the All Ordinaries off 0.2 percent. Tech stocks lagged on weakness in buy-now-pay-later stocks while gambling and travel stocks depressed consumer discretionary. Energy and commodities stocks rose, while banks led financials higher.

Looking ahead*

In Asia/Pacific, Japanese PPI, Chinese merchandise trade, Indian CPI, Indian industrial production, and Bank of Korea policy announcement are scheduled. In Europe, UK labour market report, German ZEW survey due. In North America, the US JOLTs report is on tap.

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