Daily market review

United States

US equities advanced broadly on positive earnings and as sentiment improved on hopes that inflation is receding and the pandemic is fading. The Dow Jones industrial average gained 0.9 percent, the S&P 500 rose 1.5 percent and the NASDAQ advanced by 2.1 percent.

Risk assets reacted favorably to Atlanta Fed President Raphael Bostic's comment to CNBC that inflation may be "on the cusp" of declining, even as he said he favors three or four rate increases this year. Growth stocks outpaced value as investors appear inclined to buy them back after recent declines, including the FANMAG complex. Meta/Facebook rebounded by 5.4 percent. Reopening stocks outperformed as investors bought into the post-pandemic narrative, with travel & leisure, restaurants, and retailers extending recent strength.

Among media companies, Fox jumped 7.4 percent and Omnicom rallied 14 percent after the market liked their earnings reports. Elsewhere, Chipotle, the restaurant chain, rose 10 percent, and Lyft, the ridesharing service, gained 6.8 percent, on earnings beats. On the downside, CVS, the drug store chain, fell 5.4 percent after disappointing guidance.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose by 71 cents to US$91.75 while spot gold rose US$6.20 to US$1,833.19. The US dollar weakened vs. most major currencies. Yields on the US Treasury 30-year bond declined 1 basis point to 2.25 percent, and the 10-year note declined 2 basis points to 1.94 percent.


Equities rebounded with a boost from earnings and better risk appetite. The Europe-wide STOXX 600 gained 1.7 percent, the German DAX rose 1.6 percent, the French CAC rose 1.5 percent and the UK FTSE 100 was up 1.0 percent.

Sentiment improved after Tuesday's better close on Wall Street and as more investors expect tensions between Ukraine and Russia to ease.

Among sectors, autos & parts, technology, financial services, retail, real estate, travel & leisure, industrials, and construction outperformed. Lagging but still higher were food & beverage, banks, chemicals, personal & household goods, utilities, and telecom.

Among companies reporting beats, Ayden, the payments company, rallied 12 percent, Dunelm, the furniture retailer, rose 2.5 percent, Pandora, the jeweler, was up 7.9 percent, and AP Moeller Maersk gained 7.2 percent. On the downside, Svenska Handelsbanken declined 1.4 percent, and GlaxoSmithKline was off 1.7 percent after disappointing results.

Asia Pacific

Asia/Pacific markets bounced back Wednesday with growth/tech stocks leading, and Japan and Australia buoyed by company news.

Hong Kong's Hang Seng index rallied 2.1 percent with big tech stocks rebounding amid reports of state intervention to support Chinese stocks after Tuesday's losses. Tencent rose 2.7 percent and Alibaba gained 6.8 percent. Property stocks bounced, too, on reports that regulators would ease financing rules for rental housing properties.

China's CSI 300 index rose 0.9 percent and the value-stock heavy Shanghai composite gained 0.8 percent. Consumer staples and telecom outperformed while energy lagged.

The Taiwan Taiex rose 1.0 percent and the South Korean KOSPI was up 0.8 percent as tech stocks advanced.

Japanese equities rose with growth stocks leading and most sectors higher. The Nikkei 225 rose 1.1 percent while the Topix gained 0.9 percent. Among companies, Softbank rose 5.9 percent after saying it will take Arm, its chipmaking unit, public.

Indian equities perked up with gains nearly across the board and the BSE SENSEX up 1.1 percent. Investors are watching for the Reserve Bank of India's policy announcement Thursday with expectations centering on no change in rates.

Technology and financial earnings lifted Australian equities, with the All Ordinaries index and the ASX 200 both up 1.1 percent. Commonwealth Bank of Australia advanced by 5.6 percent and Computershare rallied 11 percent after earnings beats. On the downside, iron ore producers fell after Chinese regulators said they may tighten market supervision.

Looking ahead*

In Asia/Pacific, the Japanese PPI report and Reserve Bank of India policy announcement are scheduled. In Europe, no major reports are due. In North America, US CPI, US jobless claims, and US Treasury statement reports are on tap.

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