John Hancock: Weekly Market Recap Week Ended August 10th

Tech strength

Information technology stocks were among the biggest gainers of the week, owing in part to the sector’s strong second-quarter earnings. Tech company profits increased an average of 32% compared with the same quarter a year earlier, based on the more than 80% of the tech companies that had reported quarterly data as of August 9.

Small wins

Stocks of smaller companies generally held up better than large caps, as a small-cap benchmark, the Russell 2000 Index, climbed nearly 1% for the week. Most smaller firms are more domestically focused than bigger companies, and they were less exposed to the week’s troubling overseas developments than many larger companies.

Inflation spike

A monthly gauge of inflation posted the biggest monthly increase in a decade, according to a report issued Friday. The core measure of the Consumer Price Index, which excludes volatile food and fuel prices, rose 2.4 % in July relative to the same month a year earlier—the biggest advance since September 2008.

Currency volatility

While Turkey is a relatively small player in the global economy, the 20% weekly decline in its currency weighed heavily on other emerging-market currencies, potentially increasing borrowing costs for many of those countries. Currencies in South Africa and Hungary dropped around 2% versus the U.S. dollar on Friday, and the Russian ruble fell to its lowest level in two years

Source: jhinvestments.com, John Hancock Investments