Daily market review

United States

Passage of the $1.2 trillion US infrastructure deal boosted some cyclicals but the major averages were nearly stable Monday in quiet trading. The Dow Jones industrial average rose 0.3 percent, and the S&P 500 and NASDAQ both firmed 0.1 percent.

Among sectors, materials led the winners as the infrastructure deal, which focuses on roads and bridges, lifted steel and other industrial metals. Energy advanced with oil prices rallying. Chipmakers led technology shares higher. Airlines lifted industrials after the US eased restrictions to allow vaccinated tourists from overseas. Financials ticked up on the reopening trade.

On the downside, communications services lagged with telecom and media off. Consumer staples saw declines, and a selloff in Tesla, down 4.9 percent, hit consumer discretionary. Retail and apparel dragged down consumer discretionary too, with Nike, the sportswear giant, down 3.2 percent.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$1.46 to US$83.66 while spot gold rose US$8.20 to US$1,824.98. The US dollar declined vs. most major currencies. Yields on the US Treasury 30-year bond fell 8 basis points to 1.89 percent, and the 10-year note rose 4 basis points to 1.49 percent.


Equities ended narrowly mixed with strength in commodities-linked stocks offsetting disappointing company news elsewhere. The Europe-wide STOXX 600 was flat, the German DAX eased 0.1 percent, the French CAC gained 0.1 percent, and the UK FTSE 100 declined 0.1 percent.

Rising Covid cases across Europe dampened sentiment on the one hand, undercutting travel & leisure. On the positive side, passage of the US infrastructure plan supported cyclicals.

Among sectors, best were basic resources, oil & gas, chemicals, construction & materials, and industrials. On the downside, travel & leisure, retail, autos & parts, and food & beverage lagged. Among companies in focus, Henkel, the German consumer goods maker, fell 5.9 percent on disappointing guidance, and H & M, the retailer, fell 4.9 percent after a downgrade at Goldman Sachs. Volkswagen declined 2.7 percent on a downgrade at Jefferies.

Asia Pacific

Equities were narrowly mixed with mainland Chinese markets outperforming after better-than-expected Chinese trade figures. Activity was tentative as investors await US inflation figures due this week.

News that Chinese exports slowed by less than expected in October, with the trade surplus widening to a record high, spurred gains in industrials and materials shares, along with news that China's power grid is returning to more normal supply and demand conditions. China's CSI 300 index firmed 0.1 percent and the Shanghai composite rose 0.2 percent. Hong Kong's Hang Seng index declined 0.4 percent, with oil & gas stocks outperforming while health care and biotech stocks lagged.

Japanese major stock indexes ended down on profit-taking after starting the day better following gains on Wall Street. Soft earnings spurred selling, Japan's Nikkei 225 slipped 0.4 percent and the Topix declined 0.3 percent. Among companies in focus, Obayashi, the construction firm, dropped 9.2 percent after cutting its guidance. Honda Motor fell 3.3 percent after guiding its earnings lower.

Separately, South Korea's KOSPI lost 0.3 percent while Taiwan's Taiex benchmark gained 0.7 percent.

Australian equities were mixed with the All Ordinaries index off 0.1 percent. On the downside, buy-now-pay-later stocks depressed tech while weakness in biotechs weakened health care. On the positive side, the reopening play lifted airlines and travel while rising iron ore and oil prices boosted materials and energy.

Looking ahead*

In Asia/Pacific, no major releases are scheduled. In Europe, the following reports are due: French and German merchandise trade, and the German ZEW survey In North America, US NFIB business sentiment and US PPI reports are on tap.

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