Daily market review

United States

Dip-buying in megacap technology and communications helped equities recover Friday but inflation concerns were leaving major indexes lower on the week, with the Dow industrials off 0.9 percent over the last five days. The Dow Jones industrial average rose 0.5 percent, the S&P 500 gained 0.7 percent, and NASDAQ rose 1.0 percent.

Bargain-hunting lifted Facebook by 4.0 percent Friday while Apple rose 1.4 percent, Microsoft gained 1.3 percent, Google rose 2.0 percent and Amazon was up 1.5 percent. On the downside, Tesla fell 2.8 percent to weigh on consumer discretionary on news its founder, Elon Musk, sold more shares.

News that Johnson & Johnson would split into two companies got a warm welcome, as JNJ rose 1.2 percent, but weakness in biotech depressed health care stocks, with AstraZeneca off 6.6 percent in New York trading on an earnings miss. Energy trailed as oil prices slipped amid speculation the US may tap its strategic petroleum reserve.

In economic news, US consumer sentiment fell nearly 5 points to 66.8 for the worst showing in a decade. Year-ahead inflation expectations rose another tenth to 4.9 percent, which compares with the low-to-mid 2 percent range before the pandemic hit last year. More hopeful were 5-year expectations which, at 2.9 percent, are elevated but at least no more elevated than they were in prior months.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell 53 cents to US$82.07 while spot gold rose US$2.07 to US$1,865.84. The US dollar was mixed vs. major currencies. Yields on the US Treasury 30-year bond rose 3 basis points to 1.95 percent, and the 10-year note rose 2 basis points to 1.58 percent.


Company news left major equity indexes mostly higher, with personal and luxury goods leading the winners. The Europe-wide STOXX 600 rose 0.3 percent, the German DAX rose 0.1 percent, the French CAC rose 0.5 percent and the UK FTSE 100 lost 0.5 percent.

In the luxury space, Richemont, the Swiss conglomerate, rallied 11.1 percent after a big earnings beat. LVMH, its French competitor, gained 2.5 percent after reports it will open a duty free store in China. Autos & parts were in focus, with Pirelli, the tire leader, up 3.5 percent after raising its guidance, and Volkswagen up 1.2 percent after announcing better than expected deliveries.

Energy stocks trailed the market as oil prices retreated, along with negative earnings news from Roseneft Oil, down 5.1 percent in London trading. TotalEnergies lost 1.6 percent, and Royal Dutch Shell slipped by 0.5 percent. Declining commodities prices depressed miners, with Glencore down 0.6 percent and BHP down 0.5 percent.

Among other companies in focus, Deutsche Telekom gained 1.8 percent, Hapag-Lloyd, the mega-shipper, gained 1.0 percent, Deutsche Wohnen, the property company, rose 0.9 percent, and Galliford Try, the construction company, rose 5.1 percent, after topping earnings expectations.

On the downside, AstraZeneca, the pharma, dropped 6.9 percent after an earnings miss, and John Wood, the consultant, lost 4.5 percent after an earnings miss and restructuring announcement. Knorr Bremse, the manufacturer, fell 4.7 percent on weaker guidance. Travel & leisure stocks remained under pressure as European coronavirus case counts remained elevated. Intercontinental Hotel Group fell 1.4 percent Friday and was down 5.3 percent for the week, while Whitbread, the restaurant chain, lost 2.3 percent Friday and 6.4 percent for the week.

Asia Pacific

Equities advanced Friday with Japan outperforming as the market focused on Japan's fiscal stimulus plans, and China and South Korea getting a boost from a strong showing in China's Single's Day shopping event.

Japanese major stock indexes popped up as details emerged on the incoming government's fiscal stimulus plans, including reports that it will top $350 billion. Markets also drew support from bargain-hunting after analyst commentary suggesting Japanese markets have lagged global peers. Japan's Nikkei 225 rose 1.1 percent and the Topix gained 1.3 percent. Gains were across the board, paced by technology, real estate, mining, iron & steel, automobiles, and banks. Toyota rose 2.4 percent after saying it is moving to restore normal production as the pandemic ebbs.

Chinese markets were mixed with property developers backing off after Thursday's rally. On the positive side, risk appetite got a lift from reports that Single's Day sales by Alibaba and JD.com came in around $139 billion, a new record. China's CSI 300 index eased 0.2 percent and the Shanghai composite firmed 0.2 percent. Among sectors, industrials and telecom outperformed while property stocks lagged.

Hong Kong's Hang Seng index rose 0.3 percent as investors focused on strong Single's Day sales. Consumer goods and internet stocks outperformed while property and banks lagged. Online retailer Meituan rose 2.6 percent and JD.com was up 5.2 percent.

Separately, Taiwan's Taiex benchmark gained 0.4 percent and South Korea's KOSPI rallied 1.5 percent with support from tech stocks linked to Single's Day sales strength.

Strength in commodities prices lifted miners and energy stocks with the All Ordinaries index up 0.8 percent. Gains were nearly across the board with materials leading as iron ore miners extended Thursday's rally. Energy outperformed with liquefied natural gas producers strong. Tech stocks, consumer staples, consumer discretionary, and banks advanced. Health care lagged with Resmed, the medical device maker, off 1.6 percent.

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