Daily market review

United States

Growth stocks boosted equities with Tesla leading consumer discretionary shares, with the market well-bid ahead of earnings news. The Dow Jones industrial average rose 0.2 percent, the S&P 500 gained 0.5 percent, both to new record highs, and the NASDAQ advanced by 0.9 percent.

Tesla rallied 13 percent after rental car leader Hertz, up 9.4 percent, said it would buy 100,000 Tesla vehicles, and Morgan Stanley raised the automaker's price target. Other consumer discretionary winners included retailers Lowe's, up 1.3 percent, and Target, up 1.7 percent.

Commodity-linked stocks outperformed, with energy and materials tracking gains in most commodities. Other winners included chipmakers, machinery, and biotech. Lagging were airlines, restaurants, and credit card stocks. On the downside, Kimberly-Clarke, the consumer products maker, down 2.2 percent, warned about rising input costs.

Activity was somewhat restrained but positive as the market awaits earnings from megacaps including Facebook, due after Monday's US market close, and Amazon, Apple, Microsoft, and Google to report later this week.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil declined 4 cents to US$85.74 while spot gold rose US$12.52 to US$1,806.77. The US dollar rose vs. most major currencies. Yields on the US Treasury 30-year bond rose 2 basis points to 2.09 percent, and the 10-year note was flat at 1.64 percent.


A better showing for commodities and finance stocks helped equities mostly edge higher. The Europe-wide STOXX 600 firmed 0.1 percent, the German DAX rose 0.4 percent, the French CAC declined 0.3 percent, and the UK FTSE 100 was up 0.3 percent.

Rising oil prices boosted energy stocks and higher metals prices underpinned miners. Metals drew support from a Chinese state media report saying China is confident about achieving growth targets this year. Financials gained after HSBC, up 1.9 percent, reported surprisingly good earnings and announced a big share buyback.

Among companies in focus, Ericsson, the Swedish telecom supplier, fell 3.5 percent, and Nokia, the Finnish telecom supplier, fell 2.5 percent after an analyst downgrade. On the positive side, SSAB, the Swedish steelmaker, rose 6.2 percent on a big earnings beat. Banco de Sabadell, the Spanish bank, rose 2.8 percent on speculation it may be acquired.

In economic news, German Ifo data came in weak, as business confidence was hurt by supply disruptions. The IFO Business Climate Index fell to 97.7 in October, slightly below the Econoday median of 98.1 in a survey of economists' forecasts.

Asia Pacific

Asian equities were mostly higher with China bolstered by better China Evergrande news and a big reserve injection from the People's Bank of China, while Japan lagged.

Mainland markets got a lift from reports that China Evergrande had resumed work on multiple development projects and from an aggressive provision of liquidity from the PBOC. China's CSI 300 index rose 0.4 percent and the Shanghai composite rose 0.8 percent. Among sectors, industrials and energy shares beat the market while real estate lagged.

Hong Kong's Hang Seng index was flat, with oil & gas and materials stocks rising while real estate slipped. Movement in China to implement a proposed property tax depressed the real estate sector. Taiwan's Taiex benchmark was unchanged.

South Korea's KOSPI gained 0.5 percent as investors anticipated better earnings, and foreign investors were net buyers.

Japanese markets weakened after disappointing earnings from US chipmakers weighed on their Japanese counterparts. The Nikkei 225 index declined 0.7 percent and the broader Topix eased by 0.3 percent. Risk appetite also suffered after Prime Minister Fumio Kishida's ruling coalition suffered an unexpected loss in a parliamentary by-election. The loss raised concern about Kishida's prospects in Sunday's national election and the coalition's fiscal stimulus plans.

Rising commodities prices helped Australia's All Ordinaries index rise by 0.4 percent, though equities ended down from the day's highs. Sentiment drew support from news that Victoria, the Australian state, would speed removing anti-Covid restrictions as it reaches vaccination targets. Energy and materials stocks led the winners, along with telecom. Tech stocks lagged, along with industrials.

Looking ahead*

In Asia/Pacific, South Korean GDP, Hong Kong merchandise trade, and Singapore industrial production figures are scheduled. In Europe, the ECB lending survey and UK CBI distributive trades figures are due. In North America, reports are scheduled on US Case Shiller home prices, US FHFA home prices, US new home sales, US consumer confidence, and Richmond Fed manufacturing survey.

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