Daily market review

United States

Dip-buying in growth stocks and selected positive earnings news bolstered equities Wednesday. The Dow Jones industrial average rose 1.0 percent, the S&P 500 gained 1.1 percent and the NASDAQ advanced by 2.0 percent.

Megacaps bounced back with help from declining bond yields as investors appeared to buy into the peak inflation story after another upside inflation surprise in the US producer prices report. Among megacaps, Amazon rallied 3.2 percent, Google was up 1.5 percent and Apple rose 1.6 percent. Best sectors included technology and consumer discretionary, plus energy and industrials.

Reopening stocks perked up, including airlines, after Delta, up 6.2 percent, said its outlook was improving as Omicron fades. American Airlines rose 11 percent. Other reopening trades advanced, including restaurants and cruise lines.

Financials lagged after JP Morgan, down 3.2 percent, reported lower-than-expected profits as it added to its loan-loss reserve. Defensive plays lagged too, including health care and utilities.

Among companies in focus, AbbVie, the pharma, fell 4.2 percent after its president resigned. Bed Bath & Beyond declined 1.2 percent on an earnings and revenues miss and widely noted warning on inflation and slowing consumer demand. On the positive side, Fastenal, the industrial supplies company, rose 2.2 percent on an earnings beat.

In economic news, the US producer price index rose more than expected in March, as it advanced 1.4 percent from February, compared with a consensus forecast of 1.1 percent in an Econoday survey. February was revised up to 0.9 percent. On a 12-month basis, the index topped expectations with an 11.2 percent increase, up from 10.3 percent in February.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$4.18 to US$108.70 while spot gold rose US$8.80 to US$1,977.15. The US dollar was mixed vs. major currencies. The US Treasury 30-year bond yield declined 2 basis points at 2.80 percent and the 10-year note yield fell 4 basis points to 2.69 percent.


Equities were mixed to lower Wednesday as commodities prices rose again amid negative news in the Ukraine conflict. The Europe-wide STOXX was flat, the German DAX lost 0.3 percent, and the French CAC and UK FTSE 100 both firmed 0.1percent.

Commodities rose as investors focused on Russian President Vladimir Putin's comment that Ukraine peace talks were at a "dead end," reports that Russian forces are preparing renewed attacks in eastern Ukraine, and news that the US and its allies are expanding lethal military support for Ukraine.

Markets appear cautious headed into earnings season as investors brace for more companies to warn on inflation and supply chain effects hitting profits, alongside the impact of rapidly rising interest rates.

Among equity sectors, technology lagged, along with real estate, insurance, and food & beverage shares. On the positive side, energy and basic resources outperformed with rising commodities prices.

Among companies in the news, Darktrace, the cyber defense company, dropped 12 percent despite better revenue guidance, Sportswear giant Adidas fell 1.5 percent after an analyst downgrade, and Tesco, the retailer, fell 4.0 percent after cautious guidance. Among gainers, Telecom Italia rose 3.0 percent on reports of new bidders for its consumer service business. Electricite de France gained 2.4 percent on a report it may sell its renewable energy business.

Asia Pacific

Asia-Pacific equities improved Wednesday, outside of China, as technology shares rebounded.

Chinese equities lagged as investors waited for the government to back up reports of new stimulus. News of an unexpected decline in Chinese merchandise imports added to the impression that anti-Covid lockdowns are hurting the economy. China's CSI 300 lost 1.0 percent, the Shanghai index declined 0.8 percent. Hong Kong's Hang Seng firmed 0.3 percent. Energy stocks outperformed while health care sagged.

Growth and other technology shares paced a rebound in Japanese equities, with nearly all sectors higher. Japan's Nikkei 225 jumped 1.9 percent and the TOPIX gained 1.4 percent. Lower bond yields after US consumer price figures lifted risk appetite.

The tech-heavy South Korean KOSPI advanced 1.9 percent and the Taiwan Taiex gained 1.8 percent. The Indian BSE Sensex was down 0.4 percent.

Rising commodities prices lifted Australian equities with the All Ordinaries index up 0.5 percent. Energy and mining stocks led the winners, along with consumer discretionary and utilities. Lagging were real estate investment trusts, information technology, and telecom.

Looking ahead*

In Asia/Pacific, policy announcements are due from the Bank of Korea and the Monetary Authority of Singapore. In economic data, Singapore's GDP and Australian Labour Force Survey are due. In Europe, Swiss producer and import prices and European Central Bank policy announcements are on the schedule. In North America, US jobless claims, US retail sales, Canadian manufacturing sales, US import & export prices, US business inventories, and US consumer sentiment reports are on tap.

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Global Bond Market Recap

Global Currency Recap

Commodities and currencies