Daily market review

United States

Positive economic data, including strong US retail sales, plus upbeat earnings news, helped equities edge up. The Dow Jones industrial average rose 0.2 percent, the S&P 500 rose 0.4 percent and NASDAQ gained 0.8 percent.

Consumer discretionary stocks led the winners on a day when retail sales topped expectations. Retailer Home Depot, up 5.7 percent, reported better-than-expected results. Tesla rose 4.1 percent to add to the sector's strength.

Technology outperformed with Apple up 0.7 percent, Microsoft up 1.0 percent, and Qualcomm up 7.9 percent. Health care was strong, paced by managed care, including Humana, up 1.4 percent. Lagging were communications, financials, and energy. Among communications stocks, internet megacaps declined, with Facebook ending down 1.3 percent.

Airlines were soft, with Delta down 3.2 percent. Industrials were hurt by weakness in Boeing, down 3.1 percent. Consumer staples were depressed by Walmart, down 2.6 percent, despite earnings and sales beats.

In US economic news, retail sales jumped 1.7 percent in October after increasing 0.8 percent in September. Excluding vehicles and parts, sales jumped the same 1.7 percent amid widespread gains. Separately, industrial production rose 1.6 percent in October, with about half of the gain the Fed attributing to a rebound after Hurricane Ida stalled energy output in the Gulf of Mexico. Auto output also bounced back in October.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 41 cents to US$82.49 while spot gold declined US$13.51 to US$1,849.94. The US dollar was up vs. most major currencies. Yields on the US Treasury 30-year bond rose 2 basis points to 2.03 percent, and the 10-year note rose 2 basis points to 1.64 percent.


Equities were mostly better with sentiment bolstered by positive reaction to a low-key US-China summit and positive company news. The Europe-wide STOXX 600 rose 0.2 percent, the German DAX gained 0.6 percent, the French CAC rose 0.3 percent, and the UK FTSE 100 was down 0.3 percent.

Risk appetite got a lift from impressions that the Biden-Xi talks suggested US-China relations are improving, or at least not getting worse. Investors continued to react to comments from European Central Bank officials pushing the view that elevated inflation readings will prove transitory, and that rate hikes are unlikely next year.

Among sectors, best were energy, real estate, and retail while worst were travel & leisure, construction & materials, and media. Among companies reporting, Vodafone, up 4.8 percent, Restaurant Group, up 17 percent, and Land Securities, up 3.7 percent, topped expectations, along with Kering, up 4.4 percent, and Diageo, up 2.2 percent, on better guidance.

Asia Pacific

Asian equities retreated to end mixed after getting an initial boost from an evidently non-eventful summit between President Joe Biden and China's President Xi Jinping.

Chinese trading was muted as investors focused on the Biden-Xi talks. Market takeaways were positive as the talks appeared to center on efforts to stabilize bilateral relations. China's CSI 300 index was unchanged, and the Shanghai composite declined 0.3 percent. Among sectors, defense stocks lagged as investors saw US-China tensions ease after the US-China talks. Industrials and utilities also lagged. Health care outperformed.

Hong Kong's Hang Seng index rallied 1.3 percent with online gaming stocks getting a boost after a report that Chinese regulators may resume approving new online games after a three-month halt. Tencent, the online giant, rose 2.2 percent. Health care also beat the market while property and banks lagged.

A mixed showing left Japan's Nikkei 225 and the Topix both up 0.1 percent, with sentiment bolstered by mostly positive earnings reports. Among sectors, autos advanced with Subaru up 5.2 percent after an upgrade at JP Morgan, which carried over to other auto stocks. Miners also outperformed. On the downside, land and marine shipping services lagged.

Separately, Taiwan's Taiex benchmark firmed 0.3 percent as it held onto its early gains. South Korea's KOSPI declined 0.1 percent.

Australian equities saw weakness nearly across the board with the All Ordinaries index down 0.7 percent. Markets continued to focus on inflation concerns despite Reserve Bank of Australia Governor Philip Lowe's comment to business economists that inflation pressures are more muted in Australia than elsewhere, and that rates are not going up in 2022. Materials, energy, industrials, telecom, and financials saw notable declines. On the positive side, tech stocks advanced.

Looking ahead*

In Asia/Pacific, New Zealand PPI, Japanese merchandise trade, Japanese machinery orders, Singapore merchandise trade, and Australian wage price index figures are scheduled. In Europe, the following reports are due: UK CPI, UK PPI, Italian merchandise trade, and Eurozone HICP. In North America, US housing starts and Canadian CPI reports are on tap.

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