John Hancock Weekly Market Recap: Week Ended July 6th

Small wins

After declining 2.5% the previous week, a small-cap benchmark rallied to a full recovery and then some as the Russell 2000 Index surged 3.0%. Stocks of smaller companies have generally outperformed large caps in recent weeks, in part because most smaller firms are more domestically focused than bigger companies and less exposed to global trade tensions.

Fed minutes

Minutes from the U.S. Federal Reserve’s latest policy meeting showed board members were concerned that rising trade tensions could weigh on business investment and weaken economic growth. Members also reaffirmed plans to continue gradually raising interest rates, with most participants expecting two additional increases this year.

Solid labor market

The U.S. unemployment rate rose in June to 4.0% from 3. 8% in May, but it remained near its lowest point in 18 years and hiring was solid. The economy generated about 213,000 jobs — in line with the monthly average gain through the first half of this year and above last year’s average.

Earnings ahead

Another quarter of solid earnings growth is expected as companies begin reporting second-quarter results this week. Profits for companies in the S&P 500 are expected to grow by almost 22% compared with the same quarter a year earlier, according to the average estimate of analysts surveyed by FactSet.

Source: jhinvestments.com, John Hancock Investments