Daily market review

United States

A mixed showing among sectors left major stock indexes nearly unchanged on Monday, with energy stocks strong and technology shares lagging. The Dow Jones industrial average, the S&P 500 and NASDAQ all ended flat.

Tesla, down 1.9 percent after its founder threatened to sell more shares, weighed on the NASDAQ, along with Nvidia, the chipmaker, down 1.2 percent, and Crowdstrike, the software company, off 11 percent on an underweight rating from Morgan Stanley. Materials lagged on weakness in metals. Health care slipped, with managed care company UnitedHealth off 1.8 percent.

On the positive side, energy stocks outperformed, with Chevron up 2.3 percent. Bank stocks followed rising US bond yields higher. Consumer staples outperformed with Tyson Foods up 3.6 percent on an earnings beat. Boeing, up 5.5 percent, boosted industrials after the company said it was close to resuming deliveries of its 787 aircraft. Utilities rose with Con Edison up 2.1 percent.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 1 cent to US$82.08 while spot gold declined US$1.09 to US$1,863.45. The US dollar was mixed vs. major currencies. Yields on the US Treasury 30-year bond rose 8 basis points to 2.01 percent, and the 10-year note rose 5 basis points to 1.62 percent.


Equities edged up on company news but weakness in commodities stocks limited the rise. The Europe-wide STOXX 600 was up 0.4 percent, the German DAX rose 0.3 percent, the French CAC gained 0.5 percent, and the UK FTSE 100 rose 0.1 percent.

In macro news, European Central Bank President Christine Lagarde repeated the bank's view that inflation pressures are likely to ease and that raising rates would be premature. Meanwhile, European Covid cases remained elevated and investors were on edge over the prospect of new restrictions to contain the spread.

Among sectors, retail, utilities, technology, and banks fared best while lagging were basic resources, telecom, chemicals, and media. Commodities prices slipped to depress miners, with Antofagasta off 2.3 percent and BHP off 1.8 percent.

Among companies reporting, Cineworld, the movie chain, gained 7.0 percent, SAF Holland, the auto parts maker, up 5.1 percent, and Serco, the public services contractor, gained 2.5 percent after better-than-expected results. Airbus, up 1.8 percent, got a boost from a big order. Ahold Delhaize, the supermarket chain, rose 3.5 percent after announcing a share buyback.

On the downside, Nordex, the wind turbine maker, declined 0.4 percent, Sonova, the hearing aid company, dropped 5.3 percent, and Vantage Towers, the mobile phone tower giant, lost 2.3 percent on disappointing results.

Asia Pacific

Asian equities were mixed as Japanese equities followed US markets higher while Chinese markets were flat to weaker.

Friday's rally in US growth stocks supported Japanese market sentiment Monday along with positive earnings news. Japan's Nikkei 225 rose 0.6 percent and the Topix gained 0.4 percent. Best sectors were autos, services, and materials. In macro news, Japanese gross domestic product figures came in much weaker than expected, and Bank of Japan Governor Haruhiko Kuroda repeated in a speech to business leaders that the BOJ plans to continue its super-easy monetary policy.

Chinese markets ended slightly lower with reaction muted to mostly better than expected Chinese economic data. Risk appetite was muted by concern over another Covid outbreak and comments from public health officials underlining that strict containment measures would remain in place. China's CSI 300 index fell 0.1 percent and the Shanghai composite declined 0.2 percent. Among sectors, health care outperformed while industrials and materials lagged.

Hong Kong's Hang Seng index rose 0.3 percent with health care leading while property stocks and oil & gas lagged.

Separately, Taiwan's Taiex benchmark rose 0.7 percent and South Korea's KOSPI rose 1.0 percent with support from strength in microchip makers and other tech stocks.

Australian equities firmed on better-than-expected Chinese economic data, with the All Ordinaries index up 0.4 percent. Most sectors improved but gains were limited by weakness in commodities with oil prices down again and iron ore off too. Health care was the top performer, with Mesoblast, the pharma, up 12 percent on an earnings beat.

In economic data, Chinese retail sales rose 4.9 percent on the year in October, well above the consensus forecast for an increase of 3.5 percent. Chinese industrial production gained 3.5 percent on the year in October, above the consensus call of a 3.1 percent rise. Meanwhile, Japanese GDP slumped by 0.8 percent on quarter, or at an annualized pace 3.0 percent, in the third quarter, vs. the Econoday median forecast of a 0.2 percent drop on quarter, or an annualized 0.8 percent decrease, as a Covid resurgence dampened consumption while supply chain disruptions hampered business investment.

Looking ahead*

In Asia/Pacific, Reserve Bank of Australia meeting minutes are scheduled. In Europe, the following reports are due: UK Labour Market Report, French CPI, Italian CPI, and Eurozone GDP Flash. In North America, Canadian housing starts, US retail sales, US import & export prices, US industrial production, US business inventories, and US housing market index reports are on tap.

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