Daily market review

United States

Bargain hunting lifted equities amid hopes that Friday's selloff on Omicron fears was overdone. The Dow Jones industrial average rose 0.7 percent, the S&P 500 gained 1.3 percent and NASDAQ gained 1.9 percent.

Gains were broad based but megacap stocks, especially technology, led the winners, with Apple up 2.2 percent and Microsoft up 2.1 percent. Amazon, up 1.6 percent, and Tesla, up 5.1 percent, led consumer discretionary higher. Energy stocks were relatively strong even as oil prices gave back some of their overnight bounce from Friday's lows.

Lagging were consumer staples, materials, industrials, and financials. Communication services were mixed, with Twitter down 2.7 percent after giving up initial gains on news its co-founder, Jack Dorsey, was stepping down. Google, on the other hand, rose 2.3 percent.

Health care stocks lagged too, with a mixed showing among vaccine and medicine makers, including Pfizer off 3 percent and Moderna, up 12 percent. Merck fell 5.4 percent after a downgrade at Citi on lower expectations for its anti-Covid pill. Some stay-at-home stocks that rallied on Friday retreated on Monday, including Zoom Video, down 0.6 percent. Coinbase, the crypto platform, rose 5.3 percent as crypto prices bounced back in the risk-on move.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 35 cents to US$73.07 while spot gold fell US$4.32 to US$1,783.78. The US dollar was mixed vs. major currencies. Yields on the US Treasury 30-year bond rose 4 basis points to 1.86 percent, and the 10-year note rose 4 basis points to 1.52 percent.


Dip-buying after Friday's losses helped equities recover amid hopes that the Omicron variant may turn out not as bad as initially feared. The Europe-wide STOXX 600 rose 0.7 percent, the French CAC gained 0.5 percent, the German DAX firmed 0.2 percent, and the UK FTSE 100 was up 0.9 percent.

Among sectors, travel & leisure rebounded the most after leading declines on Friday. Basic resources and oil & gas stocks popped back up too, with a bounce in commodities prices after Friday's dramatic selloff. On the downside, autos & parts lagged, with pressure from Faurecia, the big auto parts supplier, down 8 percent after downgrading its guidance for a second time this year.

Among stocks in focus, Johnson Matthey rose 3.3 percent on a report that Tata Chemicals may buy JM's battery materials business. TotalEnergies rose 2.2 percent after launching a huge solar power plant. SAP, the software giant, rose 1.6 percent after announcing plans to build its cloud business.

Asia Pacific

Equities were mostly weaker as investors focused on the new Covid-19 variant, which appeared in more countries globally.

Japanese markets saw losses across the board, with value/cyclicals weakest on concern over the domestic and global economic outlook. Prime Minister Fumio Kishida's decision to bar foreign visitors weighed on risk sentiment. The Nikkei 225 lost 1.6 percent and the Topix dropped 1.8 percent. Among sectors, airlines and railways led the decliners, along with automakers and textiles.

In mainland Chinese markets, equities were mostly lower with growth names topping value stocks. China's CSI 300 index eased 0.2 percent and the Shanghai composite index was flat. Most sectors declined, led by consumer discretionary, financials, and real estate.

Hong Kong equities dropped on weakness in tech stocks with the Hang Seng index off 1.0 percent. Losses in internet giant Meituan, down 7 percent on an earnings miss, weighed on the market. Gaming stocks were hit by the arrest of several people with links to Macau gaming companies.

South Korea's KOSPI fell 0.9 percent and the Taiwan Taiex eased 0.2 percent but losses were limited by buying at the lows after big tech stocks tracked US shares much lower at the open.

Australia's All Ordinaries index slipped 0.5 percent as Australian markets tracked global markets lower. Most sectors weakened, led by losses in reopening stocks, including airlines, plus energy, real estate linked to retail, and banks. Consumer discretionary held up better on reports of strong early holiday sales, along with gains in tech and iron ore stocks.

Looking ahead*

In Asia/Pacific, South Korean industrial production, South Korean retail sales, Japanese unemployment rate, Japanese industrial production, Indian GDP, and Chinese CFLP manufacturing PMI reports are scheduled. In Europe, French consumer manufactured goods consumption, French CPI, French GDP, French PPI, KOF Swiss leading indicator, German unemployment rate, Italian GDP, Eurozone HICP Flash, and Italian CPI reports are due. In North America, Fed Chair Jerome Powell will speak, plus Canadian monthly GDP, Canadian quarterly GDP, US Case Shiller home price index, FHFA house price index, Chicago PMI, US consumer confidence reports are due.

Global Stock Market Recap

Global Bond Market Recap

Global Currency Recap

Commodities and currencies