Daily market review

United States

Equities bounced Tuesday with gains accelerating into the close as more traders jumped on board after initial dip buying. The Dow Jones industrial average rose 1.8 percent, the S&P 500 gained 2.1 percent, and the NASDAQ rose 2.9 percent.

Megacaps led the rebound -- as they appeared oversold after recent losses -- but gains were nearly across the board. Falling oil prices contributed, along with a softer US producer price reading than expected, with a monthly rise of 0.8 percent, though it still showed inflation running hot with a 10 percent year/year advance.

Some observers said the market was anticipating supportive news from the Federal Reserve's policy announcement due Wednesday, and remains hopeful for progress in Russia-Ukraine talks that also continue Wednesday.

Best sectors included consumer discretionary, paced by Amazon, up 3.9 percent, and Starbucks, up 4.8 percent. Technology was paced by Nvidia, up 7.7 percent, and Microsoft, up 3.9 percent. Utilities and financials also outperformed. Lagging in response to falling oil and commodities prices were energy and materials.

Among companies leading the way higher, McDonalds gained 2.8 percent, Procter & Gamble rose 3.6 percent, and Walt Disney gained 4.0 percent. Airlines outperformed after positive traffic news from United, up 9.2 percent and Delta, up 8.7 percent.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell US$7.30 to US$98.76 while spot gold fell US$37.74 to US$1915.26. The US dollar was mostly weaker vs. major currencies. Yields on the US Treasury 30-year bond rose 2 basis points to 2.50 percent, and the 10-year note rose 1 basis point at 2.15 percent.


Equities were narrowly mixed with a negative bias on lack of movement in Russia-Ukraine talks and fallout from China's Covid flareup. The Europe-wide STOXX 600 declined 0.3 percent, the German DAX eased 0.1 percent, the French CAC slipped 0.2 percent, and the UK FTSE 100 declined 0.3 percent.

Sector performance was split: commodity price weakness weighed on oil & gas and basic resources in response to Chinese industrial shutdowns in response to Covid. Technology suffered from fear of renewed chip shortages from Chinese plants. On the positive side, retail, media, telecom, and autos outperformed.

Among companies in focus, Veon, the telecom, rallied 15 percent after announcing that it has not been affected by sanctions on Russia imposed by Western allies. On the downside, Telecom Italia lost 2.0 percent amid conflicting reports on a possible takeover by Apollo Global Management.

In economic news, Eurozone data disappointed. The ZEW German economic sentiment index dropped to minus 39.3 in March, far below expectations for a positive 10 figure. Separately, Eurozone industrial production was unchanged in January from December, below expectations for 0.2 percent increase. January's output 1.3 percent fell on the year vs. expectations for a decline of 0.5 percent.

Asia Pacific

Asia-Pacific equities were mostly lower Tuesday with Chinese stocks lagging and Hong Kong off sharply for a second day, but Japan managing modest gains

Chinese stocks extended Monday's dramatic losses amid regulatory concerns and the threat of US sanctions over Chinese ties to Russia, plus widening anti-Covid lockdowns and restrictions. These negatives overshadowed unexpectedly positive Chinese economic data reports and an aggressive addition of reserves from the People's Bank of China. The CSI 300 index dropped 4.6 percent and the Shanghai composite lost 5.0 percent on top of roughly 3 percent losses on Monday.

Meanwhile, Hong Kong's Hang Seng index fell 5.7 percent after Monday's 5 percent drop. Big tech stocks including Alibaba, down 12 percent, and Tencent, down 10 percent, were among the biggest losers as investors worry Chinese stocks face delisting in the US.

Japanese markets were mixed with banks, insurance, air transportation and utilities leading to the upside, offset in part by steep losses in mining and metals stocks. The Nikkei 225 rose 0.2 percent and the broader TOPIX gained 0.8 percent. Activity was limited as investors awaited Wednesday's Federal Open Market Committee meeting.

The Taiwan Taiex was down 2.0 percent, the South Korean Kospi declined 0.9 percent, and the Indian BSE Sensex lost 1.3 percent.

Losses in commodities prices undercut Australian equities amid concerns that Chinese Covid lockdowns will hit demand. The All Ordinaries index fell 0.9 percent. Mining and energy stocks lagged, along with information technology, utilities, and consumer discretionary stocks. Holding up best were financials, telecom, health care, and industrials.

In Chinese economic data, industrial production rose 7.5 percent on the year for January and February, up from growth of 4.3 percent in December and above the consensus forecast of 4.0 percent. Separately, retail sales rose 6.7 percent on the year for January and February, up sharply from growth of 1.7 percent in December and well above the consensus forecast of 3.1 percent.

Looking ahead*

In Asia/Pacific, Japanese merchandise trade and Chinese house price reports are scheduled. In Europe, the Italian CPI report is due. In North America, the Federal Open Market Committee will announce its policy decision and Fed Chair Jerome Powell will speak to reporters. In data, Canadian CPI, US retail sales, US import & export prices, US business inventories, and US housing market index reports are on tap.

Global Stock Market Recap

Global Bond Market Recap

Global Currency Recap

Commodities and currencies