Daily market review

United States

Equities fell back Thursday, led by a retreat in growth stocks after Wednesday's rally and mixed earnings news. The Dow Jones industrial average eased 0.3 percent, the S&P 500 lost 1.2 percent, and the NASDAQ fell 2.1 percent.

Growth stocks, including megacaps, gave back Wednesday's gains as US Treasury yields climbed Thursday. Yields rose after upbeat US economic data, including strong retail sales, a better US consumer sentiment reading, and a robust reading on the employment market in the weekly jobless claims report.

Among megacaps, Amazon slipped 2.5 percent to give back some of Wednesday's advance and weigh on consumer discretionary. Google fell 2.3 percent and Netflix fell 2.7 percent as communications services lagged. Twitter ended down 1.7 percent as the market appeared skeptical of Elon Musk's bid to take the company private. Technology suffered with weakness centered in chipmakers, along with media and entertainment. Industrials outperformed with airlines strong. Consumer staples and utilities beat the market too.

Banks reflected a mixed batch of earnings to kick off earnings season. Wells Fargo dropped 4.5 percent on a revenues miss and as profits were flattered by a release of loan-loss reserves, while Citigroup gained 1.6 percent and Morgan Stanley rose 0.8 percent on well-received results.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$2.47 to US$111.17 while spot gold fell US$4.91 to US$1,972.24. The US dollar rose broadly vs. major currencies. The US Treasury 30-year bond yield was down 1 basis points at 2.79 percent while, however, the 10-year note yield surged 13 basis points to 2.83 percent.


Equities edged up Friday with support from company news. The Europe-wide STOXX and the French CAC gained 0.7 percent, the German DAX rose 0.6 percent, and UK FTSE 100 was up 0.5 percent.

The European Central Bank's policy announcement matched expectations with no change and comments from ECB President Christine Lagarde suggested that any rate increase remains at least months away.

Among equity sectors, travel & leisure shares got a lift from upbeat commentary on business conditions from Delta Airlines overnight. Other outperformers included media, personal & household goods, banks, chemicals, and food & beverage. On the downside, technology, telecom, health care, and autos lagged.

Among companies in the news, Hermes, the luxury goods maker, rose 2.7 percent on a revenues beat. Publicis, the ad agency, gained 1.8 percent on a revenues beat and positive guidance to boost media shares. Valneva, the biotech, rallied 10 percent after UK regulators approved use of its Covid vaccine. Among decliners, VAT, the manufacturer, fell 2.9 percent on an earnings miss, and Ericsson, the telecom equipment maker, fell 5.9 percent on a profits miss and weak guidance.

Asia Pacific

Asia-Pacific equities rose Thursday with support from lower US bond yields and hopes for Chinese stimulus.

Chinese equities improved on speculation that fiscal stimulus is coming and that the People's Bank of China may cut bank required reserves within days to offset the impact of widespread anti-Covid restrictions. China's CSI 300 rose 1.3 percent, the Shanghai index gained 1.2 percent. Hong Kong's Hang Seng firmed 0.7 percent.

Strength in US growth and technology shares and the uptick in Chinese shares lifted Japanese equities. Japan's Nikkei 225 gained 1.2 percent and the TOPIX rose 1.0 percent. Most sectors rose, led by marine and air shipping, mining, metals, plus automakers and banks.

A 25-basis-point rate increase by the Bank of Korea, though expected, held back South Korean equities with the KOSPI up 0.1 percent. The Taiwan Taiex eased 0.3 percent.

Hopes for Chinese policy easing boosted Australian equities with the All Ordinaries index up 0.7 percent. Equities also drew support from lower Australian market rates after a softish Australian employment report.

In economic news, Australian employment rose by 17,900 in March, below market expectations for a gain of 35,000, and down from a gain of 77,400 in February. The unemployment rate was unchanged at 4.0 percent vs. expectations for a decline to 3.9 percent.

Looking ahead*

In Asia/Pacific, the Chinese house price index report is due. In Europe, French CPI and Italian CPI are on the schedule. In North America, US Empire manufacturing and US industrial production, and US Treasury international capital reports are on tap.

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Global Bond Market Recap

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