US markets
US equities finished mixed on Friday. A new batch of corporate results, economic data, and the ongoing Middle East conflict added to market volatility. The bellwether S&P 500 dipped 0.5 percent, and the blue-chip Dow Jones Industrial Average (Dow) shed 1.1 percent, while the tech-heavy NASDAQ added 0.4 percent. All three major indices extended their weekly losses as rising Treasury yields and mixed corporate results dominated market sentiment.
On the economic data front, the Personal Consumption Expenditures (PCE) report showed that the annual inflation rate held steady at 3.4 percent in September. The annual core PCE inflation, which excludes food and energy, eased to 3.7 percent, the lowest reading since May 2021. Meanwhile, personal income in the US increased less than expected in September, while the growth in consumer spending beat market estimates, signaling resilience in the US economy. Separately, the University of Michigan’s consumer sentiment index for the US was revised higher in October but remained at a five-month low. Consumer expectations deteriorated mainly due to pessimism over business conditions and personal finances.
Most of the S&P sectors ended in negative territory, led by losses in energy, financials, and utilities, while consumer discretionary, information technology (IT), and communication services were the rare gainers. The third-quarter earnings season has shifted into high gear. Oil and gas company Chevron slid 6.7 percent after reporting lower third-quarter profit, dragging down the energy sector and the Dow. Peer Exxon Mobile fell 1.9 percent after reporting a year-on-year slump in profit. JPMorgan, down 3.6 percent, was another drag on the Dow after the bank announced that its chief executive officer Jamie Dimon planned to sell 1 million shares next year. Among other stocks, Ford Motor tumbled 12.2 percent after missing results estimates and withdrawing its full-year forecast. The automaker also flagged continued pressure on electric vehicles. Conversely, e-commerce giant Amazon.com rallied 6.8 percent after reporting stabilized cloud business growth and predicting a revenue increase over the holiday season, providing much support to the consumer discretionary sector and the NASDAQ index. Among the biggest boosts in the IT sector, chipmaker Intel surged 9.3 percent following better-than-expected quarterly results.
These price data reflect observations at market close: WTI spot crude oil rose by US$2.33 to US$86.14, while spot gold gained US$1.65 to US$1,981.90. The US dollar fell against most major currencies. The US Treasury 30-year bond yield rose by 3 basis points to 5.02 percent, while the 10-year note yield remained little changed at 4.85 percent.
European markets
European equities extended losses on Friday. Market sentiment was weighed down by a slew of disappointing corporate results and forecasts. The Europe-wide STOXX dropped 0.8 percent, the German DAX inched down 0.3 percent, the French CAC 40 slid 1.4 percent, and the UK FTSE 100 slipped 0.9 percent. Major European indices logged a second week of losses amid worries about conflicts in the Middle East and downbeat corporate earnings.
Among the Europe-wide STOXX sectors, healthcare, consumer staples, and consumer discretionary suffered the biggest losses, while real estate and materials held up the best. Media stocks were among the worst performers, with Universal Music Group tumbling 7.2 percent after missing third-quarter profit margin estimates. Banks also posted big declines as Barclays and Standard Chartered each sank 2.3 percent after their corporate results missed expectations. UK lender NatWest tanked 11.6 percent on a full-year profit outlook downgrade as Britain’s Financial Conduct Authority (FCA) flagged potential regulatory breaches regarding its handling of a decision to close former Brexit Party leader Nigel Farage’s accounts. Conversely, mining stocks bucked the downward trend, with Rio Tinto up 1.1 percent as they traced higher copper prices. Among individual stocks, drugmaker Sanofi plunged 18.9 percent after posting disappointing third-quarter results and scrapping its 2025 margin target.
On the economic data front, Spain’s economy expanded by 0.3 percent quarter-on-quarter and 1.8 percent year-on-year in the third quarter of 2023, down from the previous quarter but slightly surpassing forecasts.
Asia Pacific markets
Asian equities broadly gained on Friday. Investors welcomed solid US GDP growth data and earnings beats by technology giants on Wall Street while expecting to see easing US inflation later in the day. Optimism around a stabilization in China’s economy on the back of recent policy stimulus also encouraged sentiment.
Mainland China’s equities rose for a fourth session on Friday, with the CSI 300 index jumping 1.4 percent and the Shanghai index closing up 1.0 percent. Sentiment continued to improve as US President Joe Biden met with China’s top diplomat Wang Yi. Another round of corporate announcements of share buy-back plans also added to investor confidence. Data showed China’s industrial profits fell at a softer pace during the first nine months of the year, as monthly figures extended gains in September, adding to signs of a stabilizing economy and easing margin pressures. Medicine and automobile stocks were among notable gainers. Hong Kong’s equities rebounded strongly on Friday, with the Hang Seng index closing up 2.1 percent, outperforming regional peers. All three indices logged strong weekly gains amid hopes that fresh stimulus measures could boost China’s economic recovery and revitalize capital markets.
Japanese stocks bounced back amid bargain hunting on Friday. The Nikkei index rose 1.3 percent, and the broader TOPIX climbed 1.4 percent. Investors bought back shares as sentiment was lifted by better-than-expected earnings reports from US technology giants. However, growing caution ahead of central bank meetings in Japan and the US kept a lid on further gains. Semiconductor-related stocks outperformed, with chip-testing equipment maker Advantest and chip-making equipment maker Tokyo Electron rising 0.9 percent and 1.4 percent, respectively. Export-oriented automobile stocks improved on a weaker yen, with Toyota Motor gaining 1.7 percent and Nissan Motor advancing 1.5 percent. Both indices posted negative returns over the week.
Taiwan’s TAIEX added 0.4 percent on Friday, while ended marginally lower over the week. South Korea’s KOSPI edged up 0.2 percent on Friday, while extending weekly losses to a second week. Indian equities snapped a six-session losing streak, with the BSE Sensex up 1.0 percent on Friday, supported by solid corporate results. Still, the index continued its downward trend over the week, pressured by elevated US Treasury yields, high oil prices, and fears of a widening Middle East conflict.
Australian shares recovered slightly on Friday, with the All Ordinaries index closing 0.2 percent higher. Gains were led by gold stocks as investors were drawn towards safe-haven assets due to uncertainty around the Middle East clashes. Gold producer Northern Star Resources inched up 0.3 percent. Energy and mining stocks also rose on the back of higher commodity prices, with BHP Group and Rio Tinto gaining 0.3 percent and 0.1 percent, respectively. Conversely, technology shares tracked their US peers lower. The index slid 1.1 percent over the week.