United States
A better showing for growth stocks helped equity indexes edge higher with the market awaiting more earnings news, and value stocks dampened by growth concerns linked to supply chain disruptions. The Dow Jones industrial average was flat, the S&P 500 rose 0.3 percent, and the NASDAQ gained 0.7 percent.
FANMAG stocks mostly advanced to help technology, consumer discretionary and communications service rise. Materials outperformed, too, as precious metals stocks rebounded. Utilities led the winners as trading took on a defensive cast and long-end interest rates declined.
On the downside, financials lagged as the yield curve flattened. JP Morgan fell 2.6 percent after the market downplayed its earnings beat to kick off earnings season. Energy stocks lagged, too, as oil prices fell back after a run of gains.
Among companies in focus, Apple fell 0.4 percent after Bloomberg reported iPhone production would likely be cut back due to chip shortages, an overall negative for the economic outlook. Airlines lagged, with Delta down 5.7 percent after warning about rising fuel costs. On the positive side, DR Horton, up 1.3 percent, led homebuilders higher, and Amazon gained 1.1 percent to boost consumer discretionary. Qualcomm, up 1.7 percent after announcing a share buyback, led chipmakers.
BankAmerica, Citigroup, Walgreens, and UnitedHealth are among the big names scheduled to report quarterly results on Thursday.
In economic news, US consumer price figures and Federal Open Market Committee meeting minutes mostly matched expectations, with FOMC participants projecting tapering of asset purchases likely to start in mid-November or mid-December.
These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil up 5 cents to US$83.25 while spot gold rose US$30.49 to US$1,792.24. The US dollar fell vs. most major currencies. Yields on the US Treasury 30-year bond fell 6 basis points to 2.04 percent and the 10-year note fell 3 basis points to 1.54 percent.
Europe
Positive earnings news lifted equities Wednesday though fallout from supply chain disruptions and rising costs figured heavily in earnings announcements. The Europe-wide STOXX 600 and the German DAX both rose 0.7 percent, the French CAC gained 0.8 percent, and the UK FTSE 100 was up 0.2 percent.
Technology outperformed with a boost from SAP, the big German software company, which rose 4.2 percent after raising its guidance. Luxury goods stocks advanced with LVMH up 3.2 percent on strong sales results and positive outlook for Chinese demand. Autos outperformed with Volkswagen up 2.9 percent as the market focuses on its electric vehicle plans.
STMicroelectronics, a key parts supplier for Apple, managed to rise 1.4 percent despite concern over a report that Apple may cut its iPhone production due to parts shortages. On the downside, oil & gas stocks trailed the market after OPEC reduced its forecast for oil demand in 2021. Banks also lagged, with yields lower. Standard Chartered declined 2.4 percent on news it will take a stake in Atome Financial, a Singapore-based buy-now-pay-later company. Insurers declined, with Hannover Re off 1.2 percent after pledging to reach net zero carbon targets.
Asia Pacific
Asian markets were mixed with China outperforming after positive economic data while Japan and Australia lagged. Hong Kong markets were closed due to a typhoon warning.
China's CSI 300 index rose 1.2 percent and the Shanghai composite gained 0.4 percent, with a boost from better-than-expected trade data, including faster export growth, despite fallout from power and supply chain problems in September. Value stocks lagged growth. Among sectors, consumer staples and consumer discretionary stocks outperformed while energy and utilities lagged.
South Korea's KOSPI gained 1.0 percent on a good showing for tech stocks. Taiwan's Taiex benchmark slipped 0.7 percent after Bloomberg reported that Apple would cut iPhone production due to chip shortages.
Worries about supply chain disruptions and rising fuel prices undercut Japanese equities. The Nikkei 225 index declined by 0.3 percent and the broader Topix was off 0.5 percent. Materials stocks sold off with declining iron ore prices while chipmakers and other tech components makers were hit by the report of Apple's planned cutbacks.
Another leg down in iron ore prices weakened Australian equities with the All Ordinaries down 0.1 percent even as most sectors showed modest gains. Miners Rio Tinto, down 3.2 percent, and Fortescue, down 5.3 percent, led miners lower, and banks lagged on a selloff in Bank of Queensland, down 4.3 percent. Reopening hopes lifted consumer discretionary stocks, including retailers and gambling.
In economic data, China's trade surplus in US dollar terms widened from $58.33 billion in August to $66.76 billion in September. Exports rose 28.1 percent on the year in September, up from growth of 25.6 percent in August, while year-over-year growth in imports slowed from 33.1 percent to 17.6 percent. In Japan, core machinery orders, the key leading indicator of business investment in equipment, unexpectedly slumped 2.4 percent in August, in contrast with expectations for a rise of 1.7 percent. The recent strong demand for computers faded, clouding prospects for high growth in the July-September quarter projected by the government two months ago.
Looking ahead*
In Asia/Pacific, the Australia Labour Force Survey and Indian wholesale price reports are scheduled. In Europe, the Swiss producer and import prices release is due. In North America, US jobless claims, US PPI, and Canadian manufacturing sales figures are on tap.
