Daily market review

United States

Equities seesawed to end narrowly mixed in uncertain, volatile trading Wednesday with company news in focus. The Dow Jones industrial average and the S&P 500 both rose 0.2 percent while the NASDAQ was flat.

A series of rally tries faltered as traders were quick to sell into strength after Tuesday's selloff. Technology outperformed amid gains in software stocks on upbeat results from Microsoft, which rose 4.8 percent. On the downside, communications services, and internets in particular, suffered from a selloff in Google, down 3.8 percent on disappointing results from its YouTube unit. Homebuilders lagged after more soft home sales figures. Strong sectors included energy and materials, with commodities prices sustaining a rebound. Pharma and consumer staples outperformed.

Ford, Qualcomm, Meta, and PayPal are among the big names due to report after the close, and investors were on edge for unpleasant surprises.

Other companies in focus included Boeing, down 7.5 percent on weaker-than-expected earnings and revenues. On the positive side, Visa gained 6.5 percent on strong earnings to lift credit cards. Coca-Cola rose 0.8 percent as it remained better bid after its earnings report on Monday.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil declined 22 cents to US$105.34 while spot gold fell US$17.17 to US$1,885.57. The US dollar rose vs. most major currencies. The US Treasury 30-year bond yield rose 8 basis points to 2.92 percent and the 10-year note yield rose 9 basis points to 2.82 percent.


Equities edged up with a boost from company news and a recovery in commodities prices. The Europe-wide STOXX rose 0.7 percent, the German DAX gained 0.3 percent, and the French CAC and UK FTSE 100 both rose 0.5 percent.

European energy supplies were a big focus and market overhang after Russia's Gazprom said it would stop supplies to Poland and Bulgaria. European natural gas prices spiked on the news but retreated from the highs as supplies appeared uninterrupted to Germany, Europe's biggest consumer of Russian gas. Investors also noted bleak German consumer sentiment figures, with the GFK index dropping to -26.5 in May, far below expectations.

Miners and autos & parts were the best performers while retail and telecom stocks lagged. Fresnillo, the precious metals miner, gained 2.8 percent in London trading after strong production guidance. Mercedes Benz gained 2.4 percent on an earnings beat. Renault, the automaker, gained 1.0 percent after saying it will hand over its Russian unit, Avtovaz, to a government entity. Valeo, the auto parts supplier, gained 3.7 percent after a sales beat and strong guidance.

Among other companies in focus, Aveva, the IT consultant, fell 12 percent after warning of rising costs and a hit from Russia sanctions. Deutsche Bank fell 6.4 percent after warning on cost pressures and a worsening business environment. Puma, the sportswear giant, fell 2.3 percent as its guidance was restrained by China lockdowns expected to limit supplies.

Asia Pacific

Equities mostly followed US stocks down as markets fretted over inflation, Chinese Covid lockdowns and Ukraine news. China was the exception as mainland equities managed gains on hopes for new government stimulus.

Chinese markets recovered after China's President Xi Jinping called for huge infrastructure spending to boost the economy and China's securities regulator urged mutual funds to buy stocks. China's CSI 300 gained 2.9 percent, the Shanghai index rose 2.5 percent and Hong Kong's Hang Seng index edged up 0.1 percent.

Japanese equities tracked the selloff in US markets, with the Nikkei 225 down 1.2 percent and the TOPIX off 0.9 percent. Most sectors fell. Worst were securities firms, automakers, banks, pulp & paper, and warehousing. Holding up best were marine shipping, natural resources, and utilities.

US tech stock losses and the stronger US dollar hit South Korean and Taiwanese equities, with the KOSPI down 1.1 percent and the Taiwan Taiex down 2.1 percent. The BSE Sensex declined 0.9 percent with tech and financials leading decliners.

Tech stock losses weighed on Australian equities, with the All Ordinaries index off 0.8 percent. Consumer staples, financials, and health care lagged, too. Commodities stabilized after recent heavy declines to help energy and materials outperform. Australian bond yields popped up as investors stepped up rate hike expectations from the Reserve Bank of Australia on another upside surprise in Australian consumer price figures. CPI rose 2.1 percent in the first quarter from the previous quarter, well above the 1.7 percent market expectation.

Looking ahead*

In Asia/Pacific, New Zealand merchandise trade, Hong Kong merchandise trade, Taiwan GDP, Japanese retail sales, and Japanese industrial production figures are due, plus the Bank of Japan policy announcement. In Europe, Italian business and consumer confidence, Eurozone EC economic sentiment, and German CPI reports are on the schedule. In North America, US GDP, US jobless claims, and Kansas City Fed manufacturing reports are on tap.

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