Daily market review

United States

Strong earnings and better-than-expected economic data lifted equities with value/cyclicals leading but growth stocks strong too. The Dow Jones industrial average rose 1.1 percent, the S&P 500 gained 0.8 percent and the NASDAQ was up 0.5 percent.

Stellar results from Goldman Sachs, up 3.8 percent, from Alcoa, up 14.7 percent, and JB Hunt, the transportation giant, up 8.7 percent, set the mood. Meanwhile, investors keyed on another positive surprise in US economic data, with retail sales topping expectations, after Thursday's better-than-expected US jobless claims report. Weaker New York Empire State manufacturing and US consumer sentiment reports attracted less attention.

In a sign of risk-on sentiment, crypto stocks rallied and bitcoin moved back toward record highs above $60,000 after unconfirmed reports that the Securities and Exchange Commission will allow the launch of exchange-traded funds based on bitcoin futures contracts traded on the Chicago Mercantile Exchange. The ETFs would allow a wider range of investors to gain exposure to bitcoin without actually owning bitcoins.

Among stock sectors, Amazon, up 3.3 percent, led consumer discretionary. Credit cards helped financials outperform, with American Express up 2.5 percent. Rising oil prices boosted energy stocks, with oil servicer Haliburton up 4.9 percent. Industrials rose on JB Hunt's big beat, with Caterpillar up 2.4 percent. Materials lagged, along with tech, consumer staples, and communications services as Facebook declined by 1.2 percent.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 60 cents to US$84.75 while spot gold fell US$28.42 to US$1,768.63. The US dollar was mixed vs. major currencies. Yields on the US Treasury 30-year bond rose 3 basis points to 2.05 percent, and the 10-year note rose 5 basis points to 1.57 percent.


Positive earnings news lifted equities with financials and other cyclicals including leading. The Europe-wide STOXX 600 rose 0.7 percent, the German DAX rose 0.8 percent, the French CAC gained 0.6 percent and the UK FTSE 100 was up 0.4 percent.

Sentiment drew support from strong US bank earnings and better-than-expected US retail sales and jobless claims. Other leading sectors included retail, oil & gas, and travel & leisure. Among retail stocks, Hugo Boss, the German clothing retailer, firmed 0.8 percent after an earnings beat and raised guidance.

On the downside, utilities lagged in response to the day's rebound in bond yields, and on rising fuel prices, which are squeezing profit margins.

Among companies in focus, Lufthansa rose 4.1 percent after an analyst upgrade, while Aeroport de Paris rose 2.3 percent on its latest improved traffic figures. Land Securities, the UK real estate investment trust, rose 2.0 percent after its latest trading update. On the downside, Pearson, the UK publisher, fell 16 percent on the pandemic hit to its education business. Temenos, the Swiss software business, fell 14 percent on a revenues miss. Rio Tinto, the big global miner, fell 1.4 percent after cutting its iron shipments forecast and blaming labor shortages.

Asia Pacific

Rising tech stocks propelled most Asian markets higher though China lagged on worries over its fuel crunch and property sector.

Energy and tech stocks advanced to help mainland China edge higher, offset in part by declines in health care and consumer staples. China's CSI 300 index and the Shanghai composite both firmed 0.4 percent. Hong Kong's Hang Seng index rallied 1.5 percent on its return from two days away, with a support from consumer staples and tech stocks.

South Korea's KOSPI gained 0.9 percent and Taiwan's Taiex benchmark was up 2.4 percent, with a rally in chipmakers helping Taiwan top the region. Taiwan Semiconductor, the semiconductor bellwether, rose 4.7 percent in Taiwan trading as the market continued to react favorably to its profits beat and plans to expand production.

Carryover from US tech stock gains and a weaker yen boosted Japanese equities. The Nikkei 225 index advanced 1.8 percent and the broader Topix rose 1.9 percent. Among companies in the news, Toyota managed to rise 0.4 percent despite announcing it would cut its global output due to chip shortages and the Chinese power shortage.

Australian equities improved with the All Ordinaries up 0.7 percent. Reopening plays, including travel and gaming stocks, led the winners after New South Wales, Australia's most populous state, announced additional easing of anti-Covid restrictions. Tech outperformed along with big banks. On the downside, weakness in coal and liquefied natural gas producers weighed on energy, and utilities trailed.

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