Daily market review

United States

Lower market interest rates helped growth stocks advance while financials and other value/cyclicals underperformed. The Dow Jones industrial average slipped 0.1 percent. The S&P 500 rose 0.4 percent and the NASDAQ gained 0.8 percent to set record highs.

A big earnings beat from Qualcomm, the memory chipmaker, up 12.6 percent, helped tech outperform, and Nvidia, the chipmaker, rallied 12.1 percent in sympathy. Communications outperformed as Google rose 1.3 percent and Facebook gained 1.1 percent. Amazon, up 3.0 percent, lifted consumer discretionary. Etsy, the e-commerce retailer, rallied 13.5 percent on positive earnings. Tesla, the momentum champion, gained 1.6 percent.

Cyclicals lagged growth, with materials off on weakness in chemicals and industrial metals. Financials trailed with banks hit by a rally in US Treasuries. Health care lagged too, with Cigna, the managed care provider, down 2.2 percent after mixed quarterly results.

In US economic news, jobless claims in the week ended October 30 fell 14,000 to 269,000 from 283,000 in the prior week. This is the lowest level of claims since 256,000 in the week ended March 14, 2020 and is on the cusp of returning to pre-pandemic level. The reading was below the Econoday survey median expectation of 277,000.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell 63 cents to US$80.60 while spot gold rose US$21.14 to US$1,793.77. The US dollar rose vs. most major currencies but fell vs. the yen. Yields on the US Treasury 30-year bond fell 6 basis points to 1.96 percent, and the 10-year note fell 8 basis points to 1.52 percent.


Markets firmed after a benign Fed policy announcement and a surprise no-rate increase from Bank of England. The Europe-wide STOXX 600, the German DAX, and the UK FTSE 100 all gained 0.4 percent and the French CAC rose 0.5 percent.

The BoE wrong-footed markets by leaving rates on hold pending more data on the jobs market. Recent comments from BoE officials had suggested a rate rise was coming. After Thursday's decision, BoE Governor Andrew Bailey warned "it will be necessary to increase bank rate in coming months," adding that, "in the coming months means from now onwards."

Among sectors, best were real estate, technology, retail, industrials, and telecom, while lagging were banks, basic resources, insurance, travel & leisure, and chemicals. On an active earnings day, banks were in focus, with Credit Suisse off 4.8 percent on disappointing results, while Commerzbank rose 1.5 percent and SocGen gained 1.0 percent on positive surprises.

Merck, the pharma, gained 0.8 percent to help health care outperform. HeidelbergCement fell 3.2 percent to dampen construction & materials. Oil & gas stocks rose with a recovery in oil prices after oil exporters maintained current production plans, despite US pressure to pump more oil. Royal Dutch Shell gained 1.8 percent.

Asia Pacific

Asian equities improved Thursday amid relief that Wednesday's Federal Reserve policy announcement matched expectations and as markets anticipated Chinese government support to offset the impact of an uptick in Covid cases.

Chinese equities advanced post-Fed and after Chinese Premier Li Keqiang reportedly endorsed preemptive fiscal measures to boost the economy as the government imposes restrictions to limit the spread of the coronavirus. China's CSI 300 index rose 1.0 percent and the Shanghai composite gained 0.8 percent. In Shanghai trading, most sectors rose led by consumer staples and telecom while lagging were real estate, financials, energy, and utilities.

Hong Kong's Hang Seng index gained 0.8 percent, with support from tech and consumer goods, while financials and most other sectors declined.

Japanese stocks tracked US markets higher after the Fed's policy announcement lacked hawkish surprises, with support from mostly upbeat earnings. Japan's Nikkei 225 rose 0.9 percent and the Topix gained 1.2 percent. Growth stocks topped value. Most sectors rose with transportation equipment and banks leading. Marine shipping lagged with Kawasaki Kisen Kaisha down 8.6 percent and Nippon Yusen down 8.3 percent despite reporting record profits.

Separately, South Korea's KOSPI rose 0.3 percent and Taiwan's Taiex benchmark slipped 0.3 percent. Singapore was on holiday.

Australian equities improved post-Fed with the All Ordinaries index up 0.4 percent. Tech stocks led most sectors higher. Banks led financials while retail stocks lifted real estate investment trusts. Lagging were industrial metals and energy as oil prices declined.

Looking ahead*

In Asia/Pacific, Japanese household spending, the Reserve Bank of Australia statement on policy and the Taiwan CPI are scheduled. In Europe, the following reports are due: German industrial production, UK Halifax House Price Index, French industrial production, Italian retail sales, and Eurozone retail sales. In North America, US employment, Canadian employment, US consumer credit and Canadian Ivey PMI are on tap.

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