Daily market review

United States

Equities were flat to better with many growth stocks consolidating recent gains while cyclicals/value outperformed. Both the Dow Jones industrial average and the NASDAQ rose 0.8 percent while the S&P 500 gained 0.7 percent.

Sectors were mixed with value/cyclicals leading, with a boost from ExxonMobil, up 6.5 percent, and UPS, up 14 percent, after earnings beats. Other industrial winners included General Electric, up 3.7 percent, and Boeing, up 4.1 percent. Materials beat the market, with US Steel up 4.2 percent amid rising metals prices. Big banks were winners, with Citigroup up 2.2 percent.

FANMAG stocks faced profit-taking pressure through much of the day but better buying late. Investors awaited earnings after the close from Alphabet, up 1.6 percent. Apple retreated 0.1 percent but ended at the day's highs and was up 6.7 percent over the last five days. Tesla eased 0.6 percent. Netflix rose 7.0 percent as it basked in analyst upgrades.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell US$2.00 to US$89.21 while spot gold rose US$1.64 to US$1,800.66. The US dollar fell vs. most major currencies. Yields on the US Treasury 30-year bond rose 2 basis points to 2.13 percent, and the 10-year note was up 1 basis point at 1.80 percent.


European equities improved nearly across the board as the market recovered some ground lost during January. The Europe-wide STOXX 600 gained 1.1 percent, the German DAX gained 1.0 percent, the French CAC advanced 1.4 percent, and the UK FTSE 100 rose 1.0 percent.

Investors expect the Bank of England to deliver a 25-basis-point rate increase Thursday while, for the European Central Bank, no policy change is the expectation. But by year-end, markets are pricing in two ECB rate increases by in a challenge to ECB officials who have insisted no rate increases are likely this year.

Basic resources got a boost from strength in industrial metals as markets hope for better Chinese growth with policy stimulus. Glencore rose 1.9 percent and Antofagasta gained 3.9 percent among miners. Financials benefited from rising bond yields and an earnings beat from UBS Group, up 8.0 percent. Oil & gas stocks outperformed after ExxonMobil's positive results. Industrials and travel & leisure outperformed too,

On the downside, telecom lagged with Tele2, the Swedish telecom operator, off 0.6 percent despite an earnings beat. Proximus, the Belgian telecom, fell 3.7 percent on an analyst downgrade.

Asia Pacific

Asia/Pacific markets improved but activity was limited with Mainland China, Hong Kong, South Korea, and Taiwan on holiday for the Lunar New Year. The Reserve Bank of Australia's decision to end its asset purchases matched expectations but its guidance on interest rates leaned dovish.

Japanese markets were mixed with growth stocks better while value/cyclicals lagged. The Nikkei 225 firmed 0.3 percent and the Topix unchanged. Best were marine shipping, technology, and bank stocks, while automakers, textiles, and miners were weak.

India's Sensex advanced 1.5 percent as the government maintained its supportive fiscal stance, with a big jump in proposed capital spending. Best sectors were banks, consumer goods, technology, pharma, and real estate, while autos and oil & gas lagged.

Australian equities improved after the RBA said it "will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. While inflation has picked up, it is too early to conclude that it is sustainably within the target band." Markets gave up much of their morning gains, however. The All Ordinaries index ended up 0.6 percent, and the ASX 200 up 0.5 percent. Investors remain concerned about a hawkish Federal Reserve and input cost pressures hurtig corporate profits.

Looking ahead*

In Asia/Pacific, New Zealand Labour Market Conditions and South Korean CPI reports are scheduled. In Europe, Eurozone HICP and Italian CPI reports are due. In North America, the US ADP employment report is on tap.

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Global Bond Market Recap

Global Currency Recap

Commodities and currencies