News: US stocks close near session lows


Tech and retail companies in the S&P 500 fall, while commodity and industrial shares gain
Newsfeed04 May 2021
Photo credit: AFP Photo


US

Stocks closed near Monday’s (3 May) lows as giants Tesla Inc and Amazon.com Inc weighed on the Nasdaq Composite Index which lost 0.48% to 13,895.12. Traders also parsed economic data, with inflation remaining at the forefront of the investment debate. The dollar dropped, while Treasuries rose.

Tech and retail companies in the S&P 500 Index fell, while commodity and industrial shares gained. The benchmark finished 0.27% higher at 4,192.66. The Dow Jones Industrial Average advanced 0.70% to 34,113.23.

Pfizer Inc climbed as the Biden administration will support its move to begin exporting US-made doses of the coronavirus vaccine, while Moderna Inc rallied after agreeing to provide as many as 500m doses of its shot to the global programme Covax. The Estee Lauder Companies Inc sank as the cosmetics giant’s sales missed estimates.

A report Monday showed that growth at US manufacturers cooled in April, while a gauge of prices paid for materials jumped to the highest since 2008. Federal Reserve Chairman Jerome Powell said the economic recovery is “making real progress”, but the gains have been uneven following a downturn that cut hard along lines of race and income. New York Fed President John Williams noted that current conditions are “not nearly enough” for a shift in the monetary policy stance.

Markets have been obsessed over whether higher inflation is coming. Faced with rising prices for everything from lumber to oil and computer chips, chief executive officers have cut costs and boosted prices for their products. The strategy appears to be working, with first quarter income from S&P 500 companies jumping five times as fast as sales, according to data compiled by Bloomberg Intelligence.

Ignoring the adage “sell in May and go away” may reward stock investors in 2021, according to a financial firm. The firm cited the S&P 500’s track record during the past decade in a blog post. In eight of those years, the gauge posted gains for the six months ended in October. Last year’s rally was 12%, the biggest since 2009, when a bull market was just getting started. The benchmark produced an average advance of 3.8% for all 10 years, beating a 1.7% average since 1950. – Bloomberg News.

 

EUROPE

Europe equities rose on Monday (3 May), as investors weighed robust earnings reports and a brightening economic outlook against the risks of rising inflation, supply disruptions, and higher taxes. The UK market was closed for a public holiday.

The Stoxx Europe 600 Index climbed 0.58% to 439.92, moving closer to historic highs reached last month. Carmakers led advances, despite continuing warnings about production disruptions due to a shortage of chips. Ferrari NV gained 2.6% amid upbeat estimates for its earnings report due Tuesday.

Renewables underperformed after a financial firm said that Siemens Gamesa Renewable Energy SA’s 2021 guidance was disappointing. Vestas Wind Systems A/S was among the biggest drags on the Stoxx 600 Index, dropping 4.3%.

The Stoxx 600 Index has climbed more than 10% this year, buoyed by expectations of rapid economic recovery, as vaccinations against the coronavirus progress while fiscal and monetary policy across the region remains loose. While much of the positive news is already priced into lofty valuations, European companies are delivering one of the best earnings seasons on record, supporting the gauge.

Hermes International rose, trading near all-time highs, as investors continue betting on luxury winners in a sector that is powering ahead in spite of COVID-19. Insurance also rose, with Allianz SE gaining 1.6%.

A gauge of manufacturing activity in the Euro Area rose to 62.9 in April, the highest reading in the survey’s 24-year history. The violent rebound has caused supply shortages and a surge in prices, with companies surveyed reporting unprecedented delays in securing raw materials and higher costs for chemicals, metals, and plastics. – Bloomberg News.

 

JAPAN

Japan markets are closed 3-5 May for public holidays.


GENERAL DISCLOSURE/DISCLAIMER 

This information herein is published by DBS Bank Ltd. (“DBS Bank”) and is for information only.  This publication is intended for DBS Bank and its subsidiaries or affiliates (collectively “DBS”) and clients to whom it has been delivered and may not be reproduced, transmitted or communicated to any other person without the prior written permission of DBS Bank. 

This publication is not and does not constitute or form part of any offer, recommendation, invitation or solicitation to you to subscribe to or to enter into any transaction as described, nor is it calculated to invite or permit the making of offers to the public to subscribe to or enter into any transaction for cash or other consideration and should not be viewed as such.

The information herein may be incomplete or condensed and it may not include a number of terms and provisions nor does it identify or define all or any of the risks associated to any actual transaction. Any terms, conditions and opinions contained herein may have been obtained from various sources and neither DBS nor any of their respective directors or employees (collectively the “DBS Group”) make any warranty, expressed or implied, as to its accuracy or completeness and thus assume no responsibility of it. The information herein may be subject to further revision, verification and updating and DBS Group undertakes no responsibility thereof.

All figures and amounts stated are for illustration purposes only and shall not bind DBS Group. This publication does not have regard to the specific investment objectives, financial situation or particular needs of any specific person. Before entering into any transaction to purchase any product mentioned in this publication, you should take steps to ensure that you understand the transaction and has made an independent assessment of the appropriateness of the transaction in light of your own objectives and circumstances. In particular, you should read all the relevant documentation pertaining to the product and may wish to seek advice from a financial or other professional adviser or make such independent investigations as you consider necessary or appropriate for such purposes. If you choose not to do so, you should consider carefully whether any product mentioned in this publication is suitable for you.  DBS Group does not act as an adviser and assumes no fiduciary responsibility or liability for any consequences, financial or otherwise, arising from any arrangement or entrance into any transaction in reliance on the information contained herein.  In order to build your own independent analysis of any transaction and its consequences, you should consult your own independent financial, accounting, tax, legal or other competent professional advisors as you deem appropriate to ensure that any assessment you make is suitable for you in light of your own financial, accounting, tax, and legal constraints and objectives without relying in any way on DBS Group or any position which DBS Group might have expressed in this document or orally to you in the discussion.

If this publication has been distributed by electronic transmission, such as e-mail, then such transmission cannot be guaranteed to be secure or error-free as information could be intercepted, corrupted, lost, destroyed, arrive late or incomplete, or contain viruses. The sender therefore does not accept liability for any errors or omissions in the contents of the Information, which may arise as a result of electronic transmission. If verification is required, please request for a hard-copy version.

This publication is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

Singapore: This publication is distributed by DBS Bank Ltd (Company Regn. No. 196800306E) (“DBS”) which is an Exempt Financial Adviser as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore (the “MAS”).