Daily market review

United States

Positive earnings lifted equities despite concerning geopolitical news and soft US data. The Dow Jones industrial average gained 0.6 percent, the S&P 500 rose 0.9 percent and the NASDAQ firmed 0.5 percent.

The market maintained its upward bias despite an unexpected negative US ADP employment figure (down 301,000 for January), which undercut expectations for Friday's monthly US employment figures. Risk appetite suffered from news that President Biden had approved deploying 3,000 US troops to Eastern Europe in a show of support for NATO allies. On the positive side, investors have been soothed by comments this week from a handful of Federal Reserve officials suggesting they want to avoid disrupting financial markets with abrupt rate increases.

Blowout earnings from Advanced Micro Devices, up 5.1 percent, lifted chipmakers, including Nvidia, up 2.5 percent. Alphabet's strong results and stock split lifted the stock by 7.4 percent to help communications services lead the market. Managed care stocks gained with Humana up 2.7 percent on an earnings beat. Restaurants advanced with Brinker International up 8.4 percent after upbeat results.

On the downside, GM fell 0.8 percent after its quarterly results to sink autos. Payments stocks suffered after PayPal, down 25 percent, downgraded its guidance. Waste hauler Waste Management fell 1.1 percent on weak results.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 38 cents to US$89.59 while spot gold rose US$4.94 to US$1,805.60. The US dollar fell vs. most major currencies. Yields on the US Treasury 30-year bond declined 2 basis points to 2.11 percent and the 10-year note was down 2 basis points at 1.78 percent.


European equities were mostly better with support from positive earnings and the sense that recent losses were overdone. The Europe-wide STOXX 600 gained 0.5 percent, the German DAX was flat, the French CAC firmed 0.2 percent, and the UK FTSE 100 rose 0.6 percent.

Technology shares were bolstered by positive results from AMD and Alphabet after the US close Tuesday. Banks and travel & leisure outperformed too while energy and autos lagged. Banks got a boost from Raiffeisen, up 2.8 percent, after an earnings beat. Energy stocks slipped with lower oil prices after OPEC+ announced its output plans. Health care trailed as defensive stocks were out of vogue.

In economic news, Eurozone inflation accelerated again last month. A flash 5.1 percent annual rate was up a tick versus December's final print, a new record high for the region and 0.8 percentage points above the market consensus.

Asia Pacific

US stock market strength carried over to Asia/Pacific markets with a boost from positive results from Alphabet after the Wall Street close. Activity was limited again by a holiday in all Chinese markets and in South Korea.

Tuesday's rally on Wall Street extended into Japanese markets with growth stocks leading again. The Nikkei 225 gained 1.7 percent and the Topix advanced by 2.1 percent. Among companies issuing quarterly results, Nomura Holdings rose 6.8 percent after an earnings beat, and Brother Industries gained 6.5 percent after raising its earnings guidance.

India's BSE SENSEX rose 1.2 percent to extend its rally by 4.4 percent over the last five days. Sentiment has been bolstered by an expansive government budget plan and positive earnings. Technology, pharma, and financials led the gains.

Most sectors advanced to lift Australian equities with energy and miners leading. The All Ordinaries index and the ASX 200 both gained 1.2 percent. Investors are focused on the Reserve Bank of Australia after a dovish policy announcement on Tuesday. RBA Governor Philip Lowe repeated Wednesday the bank is in no rush to raise rates given uncertainty over inflation and the pandemic.

Looking ahead*

In Asia/Pacific, South Korean PMI manufacturing, Japanese PMI composite final, Japanese PMI composite final, Indian PMI composite, and Australian goods & services trade reports are scheduled. In Europe, PMI composite final reports are due from France, Germany, Eurozone, and UK, plus Eurozone PPI, the BOE policy announcement & minutes, the BOE Monetary Policy Report, and the ECB policy announcement. In North America, US jobless claims, productivity & costs, PMI composite final, US factory orders, and US ISM services reports are on tap.

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