Daily market review

US soft with megacaps down; Europe better on earnings; Asia flat

United States

Losses in megacaps and communications services held back the major averages, but financials helped value stocks outperform. The Dow Jones industrial average firmed 0.2 percent to 35,677.02, its first record high close since Aug. 16, while the S&P 500 eased 0.1 percent and the NASDAQ lost 0.8 percent.

Snap, owner of Snapchat, the social media phenomenon, plunged 27 percent after missing on third quarter revenues and lowering its guidance. Snap depressed other communications stocks, with Google off 2.9 percent and Facebook down 5.1 percent. Amazon, down 2.9 percent, was another weight on the market. Tech lagged too, with Apple down 0.5 percent, and Intel dropping 12 percent after a big earnings miss and lower guidance, which prompted several analysts to downgrade the big chipmaker.

A better showing for financials helped the Dow industrials outperform, with American Express up 5.4 percent after an earnings beat. Other Dow financials rallying included Travelers, up 1.4 percent, and Goldman Sachs, up 1.7 percent. Crude oil prices lifted energy stocks while grocery stores boosted consumer staples.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$1.03 to US$85.78 while spot gold rose US$9.62 to US$1,794.25. The US dollar was mixed vs. major currencies. Yields on the US Treasury 30-year bond dropped 7 basis points to 2.07 percent, and the 10-year note fell 5 basis points to 1.64 percent.

Europe

Earnings news helped equities edge up with help from reports that China Evergrande made a last-minute debt payment. The Europe-wide STOXX 600 and the German DAX both gained 0.5, the French CAC gained 0.7 percent, and the UK FTSE 100 was up 0.2 percent.

Among companies in focus, Klepierre, the French real estate investment trust, gained 7.8 percent after raising its guidance and saying business returned to pre-pandemic levels. Remy Cointreau, the iconic French drinks maker, rose 1.8 percent after a revenues beat. French luxury goods maker L'Oreal, rose 5.3 percent, and Thule, the Swedish outdoor equipment maker, gained 9.2 percent on strong quarterly results.

On the downside, Boliden, the Swedish miner, fell 6.8 percent, and Saab, the Swedish automaker, fell 3.6 percent after earnings misses.

Markets tended to look past economic news, including weaker European purchasing managers reports. For the Eurozone, October's flash PMI composite at 54.3 was almost a point short of expectations and nearly 2 points below September's 56.2.

Asia Pacific

Asian equities were mostly steady with a bit of support from reports that China Evergrande made a payment on its dollar debt just ahead of its final deadline.

Mainland Chinese markets were mixed with growth stocks beating value. China's CSI 300 index rose 0.6 percent and the Shanghai composite was off 0.3 percent. Among sectors, energy lagged while consumer discretionary stocks fared best.

Hong Kong's Hang Seng index rose 0.4 percent with a boost from tech and internets. News of China Evergrande's payment lifted sentiment, along with a continued decline in Chinese coal prices. Evergrande rose 6.5 percent. Big tech gained after Bloomberg reported a top Chinese bank regulator said the government fintech crackdown was entering its final stages.

South Korea's KOSPI and the Taiwan's Taiex benchmark were both flat. Activity was limited by caution ahead of South Korean economic data releases and major corporate earnings reports next week.

Japanese markets recovered slightly after dropping the previous day, with growth stocks topping value. Sentiment drew support from the China Evergrande's news. The Nikkei 225 index rose 0.3 percent and the broader Topix edged up 0.1 percent. Metals and mining lagged the most, along with banks and transportation equipment. Machinery, appliances, and precision instruments fared best.

Australia's All Ordinaries index ended unchanged after a mixed showing among sectors. Miners and energy stocks fell back with declining commodities prices. Financials were nearly steady. Consumer discretionary outperformed, with gaming and grocery stores outperforming. Health care advanced on strength in biotechs and hospital shares.

In economic news, Japan's national average core consumer price index (excluding fresh food) edged up 0.1 percent from a year earlier in September, as expected, after being unchanged in August. It was the first year-over-year gain since March 2020, when the core reading gained 0.4 percent.

Global Stock Market Recap

Global Bond Market Recap

Global Currency Recap

Commodities and currencies

Looking forward

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