Daily market review

United States

Equities were mixed to mostly better with growth stock leading and a late boost from improved hopes for Russia-Ukraine peace talks. The Dow Jones industrial average rose 0.3 percent, the S&P 500 gained 0.7 percent and the NASDAQ gained 1.3 percent.

Stocks gained in the afternoon after a report in the Financial Times that Russia and Ukraine are discussing a ceasefire and a deal that would allow Ukraine to join the European Union as long as it is not aligned with NATO. Investors are watching closely for headlines as Russia-Ukraine talks are to resume Tuesday in Istanbul.

Growth stocks topped value/cyclicals with better demand for bid cap growth stocks amid portfolio rebalancing headed into quarter end. Meanwhile, prices for oil and other commodities dropped amid concerns over a partial lockdown in Shanghai, and talk that recent high prices will undercut demand.

Among sectors, consumer discretionary outperformed, with a boost from Amazon, up 2.6 percent, and Tesla, up 8.0 percent. Bitcoin and crypto plays advanced as risk appetite revived. Other winners included travel & leisure, parcel shippers, and software. On the downside, energy and miners lagged with the retreat in commodities.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell US$9.91 to US$109.37 while spot gold fell US$35.12 to US$1,919.83. The US dollar rose vs. major currencies. The US Treasury 30-year bond yield fell 5 basis points to 2.55 percent, and the 10-year note yield lost 2 basis points to 2.46 percent.


Equities were mostly better in mixed trading with financials and autos rising while commodity-linked stocks retreated. The Europe-wide STOXX 600 gained 0.1 percent, the German DAX rose 0.8 percent, the French CAC gained 0.5 percent and the UK FTSE 100 declined 0.1 percent.

Markets were watching Ukraine news closely, including resumption of negotiations scheduled Tuesday in Istanbul. News of anti-Covid lockdowns in Shanghai raised worries about more supply chain trouble. UK markets reacted badly after Bank of England Governor Andrew Bailey warned of a big hit to growth from rising oil prices.

Energy and basic resources stocks slipped as oil and other commodities fell on concern about weaker Chinese demand flowing from partial lockdowns in Shanghai. Rising bond yields helped bank and insurance stocks outperform with BNP Paribas up 2.1 percent and Aegon, the insurer, up 2.0 percent.

Among companies in focus, Barclays lagged financials with a decline of 3.5 percent after disclosing losses on bond trades and delaying a planned share buyback. On the positive side, Swatch, the watchmaker, rose 2.8 percent as shoppers were enthusiastic about the new MoonSwatch.

Asia Pacific

Asia-Pacific equities were mixed with regional risk appetite dented by China's partial lockdown in Shanghai, ongoing US-China tensions, and expectations for more aggressive Federal Reserve tightening.

Chinese stocks recovered from early lows amid hopes for economic policy support after weakening on news Shanghai would be locked down in two phases for widespread Covid testing. The Chinese CSI 300 index eased 0.6 percent and the Shanghai index firmed 0.1 percent. Strength focused in technology and energy stocks helped Hong Kong outperform, with the Hang Seng index up 1.3 percent.

Japanese markets edged down with most sectors declining and growth stocks lagging as Japanese government bond yields hit recent highs. Japan's Nikkei 225 declined 0.7 percent and the wider TOPIX slipped 0.4 percent. JGB yields rose after the Bank of Japan offered to buy government bonds in unlimited amounts, which prompted an unusual second BOJ offer to buy JGBs. Yen weakness bolstered exporters, including automakers, to limit the market's downside.

The Taiwan Taiex lost 0.9 percent and the South Korean KOSPI was flat. The Indian BSE Sensex rose 0.4 percent.

Australian equities started stronger with miners and bank stocks leading, but stocks retreated late in cautious trading as bond yields rose and China announced lockdowns in Shanghai. The All Ordinaries index was unchanged.

Looking ahead*

In Asia/Pacific Japanese unemployment and Australian retail sales figures are scheduled. In Europe, reports on German Gfk consumer sentiment and UK money supply are due. In North America, US Case Shiller home prices, US FHFA house prices, US consumer confidence, and US JOLTS job openings reports are on tap.

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