Daily market review

US flat to better with megacaps strong; Europe weaker; Asia mixed

United States

A late uptick in Apple and strength in other megacaps helped growth stocks and the NASDAQ outperform while value/cyclicals were mixed to lower. The Dow Jones industrial average eased 0.1 percent, the S&P 500 rose 0.3 percent and the NASDAQ gained 0.8 percent.

Apple, up 1.2 percent, rebounded through the afternoon after a positive product unveiling to lift technology. Communications services outperformed with Facebook up 3.3 percent, Alphabet. up 0.9 percent, and Netflix up 1.5 percent. Nordstrom, up 5.5 percent, helped department stores rise to lead consumer discretionary, and Amazon rose 1.1 percent.

Energy stocks receded as the day went on after starting off stronger. Consumer staples lagged on weakness in health & personal care stocks. Health care trailed, with Biogen down 4.1 percent and Medtronic down 5.4 percent after disappointing clinical trials. Financials were mixed but Goldman Sachs gained 1.9 percent in the afterglow from last week's blowout results.

Among other stocks in focus, Zillow, the online real estate broker, fell 9.4 percent after saying labor shortages forced it to stop buying properties to flip. Walt Disney fell 3.0 percent after an analyst downgrade amid concern over its streaming video service. On the positive side, Albertson's, the grocery chain, rose 3.3 percent after an earnings beat and dividend increase. Tesla rose 3.2 percent as the market expects strong results this week.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell 47 cents to US$84.28 while spot gold fell US$3.84 to US$1,764.69. The US dollar was mixed vs. major currencies. Yields on the US Treasury 30-year bond fell 2 basis points to 2.02 percent, and the 10-year note rose 1 basis point to 1.58 percent.

Europe

Fallout from weak Chinese growth figures undercut European equities, along with an uptick in UK Covid-19 case counts. The Europe-wide STOXX 600 declined 0.5 percent, the German DAX fell 0.7 percent, the French CAC lost 0.8 percent, and the UK FTSE 100 was off 0.4 percent.

Markets reacted poorly to news of a new surge in Covid-19 cases in the UK and concern over a new so-called Delta-plus variant. Investors focused on an unfortunate mix of rising energy costs, increased inflation and supply chain disruptions. Hawkish comments from Bank of England Governor Andrew Bailey added to upward pressure on yields.

On the positive side, US earnings season got off to an upbeat start last week, and investors generally see the recovery continuing in the US and other major economies, with support from easy monetary policy.

Another advance in oil prices bolstered energy stocks to help UK stocks outperform the region and limit overall declines. Soft Chinese economic data hurt European luxury retailers and others with heavy exposure to the Chinese market. Kering, the French owner of Gucci and other brands, declined 2.4 percent, and LVMH, another French luxury conglomerate, fell 2.2 percent.

Among companies in focus, Koninklijke Philips, the Dutch conglomerate, fell 3.1 percent after a disappointing quarterly report, and Umicore, the Belgian materials technology business, fell 2.0 percent after cutting its guidance due to chip shortages.

Asia Pacific

Asian markets were mixed with China lagging after weak economic data and with tech stock declines weighing on stocks across the region.

News that Chinese gross domestic product fell short of expectations depressed Chinese equities, along with President Xi Jinping's call for a property tax. China's CSI 300 index fell 1.2 percent and the Shanghai composite declined 0.1 percent. Hong Kong's Hang Seng index recovered from early losses to end up 0.3 percent. In Hong Kong, oil & gas stocks outperformed while banks and financials fell.

South Korea's KOSPI declined 0.3 percent and Taiwan's Taiex benchmark dipped 0.5 percent, with tech stocks lagging, with markets hurt by the weak Chinese economic data.

Profit-taking after recent gains weakened Japanese equities. The Nikkei 225 index and the broader Topix both declined 0.2 percent. Sectors were mixed with rising commodities prices lifting materials stocks while pharma, food, and services stocks lagged.

Australian equities ended slightly higher with the All Ordinaries up 0.2 percent. Value/cyclicals outperformed on the reopening trade as Australian states eased more anti-Covid restrictions. Rising bond yields pressured growth stocks. Among sectors, materials, banks, and oil & gas outperformed while tech, telecom, and health care lagged.

In economic news, GDP data showed China's economy expanded 4.9 percent on the year in the three months to September, slowing from 7.9 percent in the three months to June and falling short of the consensus forecast for an increase of 5.2 percent. GDP rose 0.2 percent on the quarter after increasing 1.3 percent previously, well below the consensus forecast for growth of 0.5 percent. Monthly data also published Monday showed weaker year-over-year growth for industrial production and fixed asset investment in September but stronger growth in retail sales.

Looking ahead*

In Asia/Pacific, Reserve Bank of Australia meeting minutes and the China loan prime rate report are scheduled. In Europe, Swiss merchandise trade figures are due. In North America, US housing starts figures are on tap.

Global Stock Market Recap

Global Bond Market Recap

Global Currency Recap

Commodities and currencies

This document is issued by FIL Responsible Entity (Australia) Limited ABN 33 148 059 009, AFSL No. 409340 (“Fidelity Australia”). Fidelity Australia is a member of the FIL Limited group of companies commonly known as Fidelity International.

This document is intended for use by advisers and wholesale investors. Retail investors should not rely on any information in this document without first seeking advice from their financial adviser. This document has been prepared without taking into account your objectives, financial situation or needs. You should consider these matters before acting on the information.  You should also consider the relevant Product Disclosure Statements (“PDS”) for any Fidelity Australia product mentioned in this document before making any decision about whether to acquire the product. The PDS can be obtained by contacting Fidelity Australia on 1800 119 270 or by downloading it from our website at This document may include general commentary on market activity, sector trends or other broad-based economic or political conditions that should not be taken as investment advice. Information stated herein about specific securities is subject to change. Any reference to specific securities should not be taken as a recommendation to buy, sell or hold these securities. While the information contained in this document has been prepared with reasonable care, no responsibility or liability is accepted for any errors or omissions or misstatements however caused. This document is intended as general information only. The document may not be reproduced or transmitted without prior written permission of Fidelity Australia. The issuer of Fidelity’s managed investment schemes is FIL Responsible Entity (Australia) Limited ABN 33 148 059 009. Reference to ($) are in Australian dollars unless stated otherwise.

© 2021 FIL Responsible Entity (Australia) Limited. Fidelity, Fidelity International and the Fidelity International logo and F symbol are trademarks of FIL Limited.

Share: