United States
Equities bounced back Thursday on bargain-hunting and better -than-expected earnings from big growth stocks. The Dow Jones industrial average gained 1.9 percent, the S&P 500 gained 2.5 percent while the NASDAQ jumped 3.1 percent.
Huge gains in Meta/Facebook, up 18 percent on strong results released after Wednesday's close, spurred a long-awaited relief rally in beaten-down megacaps, which led much of the market higher. Qualcomm, up 9.7 percent, was another big winner after topping expectations and issuing strong guidance to lift chipmakers. The results raised hopes for megacaps Amazon, up 4.7 percent, and Apple, up 4.5 percent, due to report later Thursday. The market's response to soft results from PayPal, up 12 percent, suggested that many investors think growth stocks have fallen enough for now.
Among sectors, best were technology, communications services, and energy, while utilities, the defensive play, lagged.
Energy stocks rose with a recovery in crude oil prices. Reopening stocks perked up on positive readouts from gaming, restaurants, hotels, cruise lines, plus homebuilders and retailers. Pharma advanced with a boost from Merck, up 5.0 percent, and Eli Lilly, up 4.1 percent, on positive trading results.
Investors evidently looked past unexpected contraction in US gross domestic product that, however, was skewed lower by a rising US trade deficit reflecting domestic supply constraints, pandemic effects, and the strong dollar. US jobless claims remained low, suggesting ongoing strength in employment.
These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$1.88 to US$107.22 while spot gold rose US$10.08 to US$1,895.65. The US dollar rose vs. most major currencies but declined vs. the Canadian dollar. The US Treasury 30-year bond yield eased 2 basis points at 2.90 percent, and the 10-year note yield rose 1 basis point to 2.83 percent.
Europe
Upbeat earnings news and apparently oversold conditions bolstered equities Thursday with autos & parts best. The Europe-wide STOXX rose 0.6 percent, the German DAX gained 1.4 percent, the French CAC rose 1.0 percent, and UK FTSE 100 was up 1.1 percent.
Travel & leisure and technology also outperformed. Lagging sectors were telecom, miners, and real estate. Among automakers, Volvo rallied 8.0 percent on an earnings beat despite cautious guidance. Among tech stocks, Temenos, the software firm, rallied 17 percent after receiving takeover interest.
Among other companies in focus, Delivery Hero gained 5.9 percent on strong revenues and guidance. Cap Gemini, the IT consulting firm, gained 5.2 percent on a revenues beat. TotalEnergies gained 3.6 percent on profits and revenues beats and share buyback plans. Standard Chartered rallied 13.5 percent on positive earnings news.
On the downside, Stora Enso, the wood products maker, lost 3.5 percent on disappointing guidance. Sanofi, the pharma, slipped 0.9 percent despite earnings and revenues beats.
In macro news, German flash HICP figures topped expectations with a gain of 0.7 percent on the month to boost the yearly rate of increase from 7.6 percent to 7.8 percent, a record high. Separately, energy markets remained in focus after reports that Germany may be willing to join a European Union embargo on Russian energy.
Asia Pacific
Equities rose with a boost from Chinese government pledges of policy support and the Bank of Japan's renewed commitment to keep interest rates down.
Chinese markets improved as the government promised to support companies coping with Covid disruptions. China's CSI 300 firmed 0.7 percent, the Shanghai index rose 0.6 percent, and Hong Kong's Hang Seng index jumped 1.7 percent. Most mainland stock sectors advanced, led by real estate and energy. In Hong Kong, banks, technology, and energy shares fared best.
Japanese equities got a boost and the yen extended recent declines after the Bank of Japan said it would make daily purchases of Japanese government bonds at a fixed 0.25 percent. Japan's Nikkei 225 rose 1.8 percent and the wider Topix rallied 2.1 percent.
South Korean equities perked up with the Kospi up 1.1 percent on upbeat company earnings, including a beat from Samsung Biologics, up 3.1 percent. Tech stocks helped Taiwan's Taiex rise by 0.7 percent with United Microelectronics up 9.2 percent after an earnings beat. The BSE Sensex rose 1.2 percent with a boost from regional strength.
Australian equities rebounded after three days of declines with the All Ordinaries index up 1.3 percent, led by a rally in materials, energy, and industrials. Markets focused on prospects for Reserve Bank of Australia cash rate increases, with Westpac the latest bank to call for liftoff in May.
Looking ahead*
In Asia/Pacific, South Korean industrial production and retail sales, Australian PPI, and Chinese PMI manufacturing figures are due. In Europe, French consumer manufactured goods consumption, French GDP flash, UK Nationwide House Prices, Swiss retail sales, French CPI, French PPI, Swiss KOF leading index, German GDP flash, Eurozone M3, Italian GDP, Eurozone GDP flash, Eurozone HICP flash, Italian CPI, and Italian PPI reports are on the schedule. In North America, US personal income and outlays, US employment cost index, Canadian monthly GDP, US Chicago PMI, and US consumer sentiment reports are on tap.
