Daily market review

United States

Equities were mixed in volatile trading Tuesday as a rally attempt mostly fizzled after three days of big losses. The Dow Jones industrial average fell 0.3 percent, the S&P 500 firmed 0.3 percent, and the NASDAQ gained 1.0 percent.

Activity was cautious ahead of US consumer price figures due for release Wednesday. Investors remain obsessed with the question of how rapidly the Federal Reserve will raise rates and whether data will suggest any peaking in inflation. Several Fed officials Tuesday repeated the view that aggressive policy action is needed to rein in demand and that the economy is robust enough to avoid a significant downturn.

Megacaps and growth stocks got a lift and remained higher after an early CNBC report that investor David Tepper had covered his NASDAQ short position on the view that its losses are ending.

Among sectors, technology, pharma, and biotech shares outperformed. Other outperformers included restaurants, airlines, hotels, and casinos. On the downside, banks slipped as bond yields retreated. Homebuilders and building materials lagged, along with health & personal care, consumer staples, retailers, and apparel stocks.

Among companies in focus, Altria fell 6.6 percent to weigh on tobacco after a downgrade at Bernstein. On the positive side, Norwegian Cruise Line gained 1.8 percent after providing positive commentary on demand for its services. Among megacaps, Apple gained 1.6 percent and Microsoft gained 1.9 percent.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell US$2.67 to US$102.44 while spot gold dropped US$15.05 to US$1,838.18. The US dollar gained vs. most major currencies. The US Treasury 30-year bond yield fell 5 basis points at 3.12 percent, and the 10-year note yield fell 5 basis points to 2.99 percent.


Equities recovered some lost ground Tuesday as markets appeared oversold on a short-term basis. The Europe-wide STOXX firmed 0.8 percent, the French CAC gained 0.5 percent, the German DAX gained 1.2 percent, and the FTSE 100 was up 0.4 percent.

Sectors were mixed. On the positive side, construction & materials outperformed as Holcim gained 2.2 percent on news of interest from JSW Steel to acquire its Indian business unit. Banks outperformed after positive earnings, including BPER Banca, up 7.9 percent on earnings and revenues beats. Chemicals advanced with Bayer up 5.3 percent on an earnings beat. On the downside, oil & gas lagged as crude prices retreated. Health care lagged.

Underlying sentiment appeared unchanged and focused on the Federal Reserve leading global tightening in financial conditions, and lack of change in China's Covid battle or the Ukraine situation.

Asia Pacific

Asian equities were mixed Tuesday with Chinese markets outperforming on hopes for government stimulus. China's CSI 300 index and the Shanghai index both rose 1.1 percent. Taiwan's Taiex firmed 0.1 percent, South Korea's KOSPI lost 0.6 percent, and Hong Kong's Hang Seng dropped 1.8 percent on its return from a holiday.

Japanese equities sagged on underlying bearish sentiment linked to Federal Reserve tightening and China's slowdown with the Nikkei 225 down 0.6 percent and the Topix down 0.9 percent.

Indian equities retreated with the BSE Sensex down 0.2 percent after Wall Street's selloff.

Spillover from the US selloff Monday hit Australian equities with the All Ordinaries index down 1.0 percent. Materials, energy, and utilities lagged.

Looking ahead*

In Asia/Pacific, Australian Westpac consumer sentiment, Chinese new yuan loans, Chinese CPI, and Chinese PPI reports are due. In Europe, the German CPI report is on the schedule. In North America, US CPI report is on tap.

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