Daily market review

United States

Equities extended Tuesday's rebound with leadership from megacaps and reopening stocks after hopeful news about the Omicron variant and better economic data. The Dow Jones industrial average rose 0.7 percent, the S&P 500 gained 1.0 percent, and the NASDAQ rose 1.2 percent.

Reports that Omicron appears relatively mild and favorable news on vaccines and treatments teamed with better than expected US consumer confidence figures to bolster consumer stocks. Among sectors, consumer discretionary fared best as cruise lines, airlines, hotels, and automobiles outperformed. Financials were in line, with banks advancing.

Megacaps mostly extended Tuesday's gains, with Tesla up 7.5 percent, Microsoft up 1.8 percent, Google up 1.9 percent, and Netflix up 1.5 percent. Lagging were consumer staples, household & personal care, chipmakers, and miners. Among consumer staples, Walmart was up 0.1 percent, and Kroger fell 0.8 percent.

Among companies in focus, Tesla advanced after its founder Elon Musk said he had sold enough shares to reach his goal of unloading 10 percent of his holdings. Pfizer rose 1.0 percent after the Food & Drug Administration authorized emergency use of its antiviral treatment. Coinbase gained 2.8 percent after an upgrade at Oppenheimer. Caterpillar rose 1.9 percent to boost the Dow industrials after an analyst upgrade. On the downside, Carmax fell 6.6 percent despite an earnings beat. Alibaba declined 4.2 percent after an analyst downgrade after negative Chinese regulatory news.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$1.23 to US$75.41 while spot gold gained US$15.82 to US$1,803.96. The US dollar fell vs. most major currencies but rose vs. the yen. Yields on the US Treasury 30-year bond declined 2 basis points at 1.85 percent, and the 10-year note fell 2 basis points to 1.46 percent.


More positive headlines around the Omicron variant and a strong Wall Street open lifted equities. The Europe-wide STOXX 600 gained 0.9 percent, the German DAX rose 1.0 percent, the French CAC gained 1.2 percent, and the UK FTSE 100 firmed 0.6 percent.

Investors seized on news of a South African study saying hospitalization and death risks are lower for Omicron vs. the Delta variant, along with favorable headlines on the efficacy of vaccines and treatments in limiting Omicron's effects.

Among sectors, best were travel & leisure, along with industrials and technology. Travel stocks were lifted by reports of relatively strong holiday travel, and evident reluctance among governments to impose full lockdowns ahead of year end, with booster shots evidently the priority.

Among companies in focus, Delivery Hero rose 7.4 percent after announcing plans to scale back its Singapore and Japanese businesses. Maersk rose 0.9 percent on news it will buy Hong Kong-based LF Logistics.

Asia Pacific

Equities ended slightly higher with early support from a strong showing on Wall Street but a retreat in the afternoon amid coronavirus worries.

Japanese equities seesawed to end up marginally with the Nikkei 225 rising 0.2 percent and the Topix up 0.1 percent. Tech stocks provided support as they followed Wall Street tech stocks higher. Reports of anti-Covid restrictions in several Asian countries dampened the gains.

China's CSI 300 index was flat and the Shanghai composite index eased 0.1 percent. Stocks came off on news that Dongxing, a Chinese city on the Vietnam border, had been locked down in response to a single Covid case. Among sectors, real estate and banks lagged while technology and telecom services outperformed.

In Hong Kong, the Hang Seng index rose 0.6 percent after paring early gains. Consumer stocks advanced while properties sagged. Alibaba was under pressure after the close on news the company failed to report a security flaw in its cloud business to Chinese regulators.

South Korea's KOSPI rose 0.3 percent and Taiwan's Taiex rose 0.2 percent with tech stocks mostly better.

Australia's All Ordinaries index firmed 0.2 percent with tech and energy stocks outperforming, along with travel and consumer discretionary. Materials, real estate, and consumer staples lagged.

Looking ahead*

In Asia/Pacific, Singapore CPI and Taiwan industrial production figures are scheduled for release. In Europe, Italian business and consumer confidence is scheduled. In North America, US durable goods, US jobless claims, US personal income & outlays, US new home sales, US consumer sentiment, and Canadian monthly GDP reports are on tap.

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