US markets
US equities ended mixed after a range-bound trading session on Thursday. The bellwether S&P 500 and the tech-heavy NASDAQ both edged up 0.1 percent, while the blue-chip Dow Jones Industrial Average slid 0.1 percent, dragged down by Cisco and Walmart after disappointing forecasts. Weak economic data also weighed on market sentiment.
The S&P sectors ended mixed, with communication services and information technology witnessing notable gains. Rate-sensitive mega-cap growth stocks such as Microsoft, Apple, and NVIDIA rose between 0.9 percent and 1.6 percent. Treasury yields eased after tepid economic figures cemented the view that the Federal Reserve is done raising interest rates. Conversely, energy stocks led the decline as oil prices fell further after demand concerns deepened following soft US data. The consumer discretionary and consumer staples sectors were among the other worst performers. Among the biggest drags, retail giant Walmart tanked 8.1 percent after warning of the impact of still-elevated inflation on consumer spending. Retailers Dollar General and Dollar Tree both sank 4.2 percent, while department store operator Macy’s climbed 5.7 percent as its quarterly sales topped market expectations. Among other stocks, communications and networking technology company Cisco Systems tumbled 9.8 percent after lowering its annual sales and earnings guidance on slowing demand for its networking equipment. Palo Alto Networks slid 5.4 percent after its forecasts for second-quarter billings fell short of estimates.
Economic data on Thursday showed signs of a slowing economy. The initial claims for unemployment benefits rose more than expected to a three-month high last week, while continuing applications hit the highest in almost two years. Both prints pointed to a softening in the labor market. Separately, manufacturing production fell beyond estimates in October, partly due to the impact of strikes at several major automakers.
These price data reflect observations at market close: WTI spot crude oil dropped by US$3.76 to US$73.50, while spot gold gained US$24.25 to US$1,982.65. The US dollar was mixed vs. major currencies. The US Treasury 30-year bond yield dropped by 7 basis points to 4.62 percent, while the 10-year note yield dropped by 9 basis points to 4.45 percent.
European markets
European equities broadly retreated on Thursday, with the Europe-wide STOXX closing down 0.7 percent after rising for three consecutive sessions, driven by hopes of a peak in the monetary tightening cycle. The French CAC 40 dropped 0.6 percent, the UK FTSE 100 slipped 1.0 percent, while the German DAX added 0.2 percent, helped by Siemens following upbeat results.
Nearly all the Europe-wide STOXX sectors ended in negative territory, with energy, consumer discretionary, materials, and consumer staples suffering the largest percentage losses, while utilities held up relatively well. Energy shares led the losses, with sector majors Shell and BP sliding 3.1 percent and 2.8 percent, respectively. Oil prices declined for two consecutive days amid concerns over a supply-demand imbalance. Luxury stocks were pressured by an 11.1 percent drop in Burberry after the luxury giant warned that it would struggle to meet its annual revenue forecast due to slowing global spending on luxury goods. Peers Kering, LVMH, and Richemont shed between 1.8 percent and 2.7 percent. Conversely, German industrial giant Siemens gained 5.7 percent after posting better-than-expected quarterly industrial profit.
Asia Pacific markets
Most Asian markets closed lower on Wednesday.
Mainland China’s equities pulled back, with the CSI 300 index ending 1.0 percent lower and the Shanghai index off 0.7 percent. Data showed new home prices fell for the fourth straight month in October as demand remained sluggish. Meanwhile, investors weighed the implications of high-level talks between Chinese President Xi Jinping and US President Joe Biden, as the two leaders resumed critical military communication amid efforts to ease geopolitical tensions in Asia. Hong Kong’s equities gave back some of the gains from the previous session, with the Hang Seng index sliding 1.4 percent, lagging behind regional peers.
Japanese stocks lost ground, with the Nikkei index down 0.3 percent and the broader TOPIX off 0.2 percent. Investors booked some profits after a sharp rally in the previous session. A rebound in US Treasury yields, after a revision of retail sales data showed strong gains in September, also weighed on sentiment. Semiconductor-related stocks fell, with Advantest sliding 1.8 percent and dragging the Nikkei index lower, while shares in peer Tokyo Electron dipped 0.1 percent.
Taiwan’s TAIEX inched up 0.2 percent. South Korea’s KOSPI firmed 0.1 percent. Indian equities extended gains, with the BSE Sensex index closing up 0.5 percent, with technology stocks heading for an upward trend amid expectations of an end to the global rate hike cycle.
Australian shares retreated after rising for two straight sessions, with the All Ordinaries off 0.6 percent. Data showed employment rebounded strongly in October, a day after wage data marked the largest increase on record last quarter, adding to worries about interest rates. Mining stocks led the decline, with major miners BHP Group and Rio Tinto dropping 0.6 percent and 0.4 percent, respectively. Financials also fell, pressured by National Australia Bank, off 1.2 percent, and ANZ Group Holdings, down 3.3 percent.