John Hancock: Weekly Market Recap Week Ended August 7th

Jobs recovery

The nation’s wounded labor market continues to heal, although at a slower pace than in the late spring and early summer. The government reported the economy added 1.8 million jobs in July, trailing the 4.8 million jump in June and the 2.7 million increase in May. Those big gains came on the heels of a record, pandemic-driven loss of 20.8 million jobs in April. 

Earnings silver lining

While investors are expected to see the largest quarterly decline in earnings since 2009, the earnings season that’s now in its final phase is looking better than had been expected when it started in mid-July. Based on results through Friday, FactSet projected an earnings decline of about 34% for companies in the S&P 500, compared with the 44% drop that analysts had projected at the start of earnings season. 

Pushing higher

The S&P 500 recorded its fifth positive week out of the past six, moving within 1% of its record high set less than six months ago, and the NASDAQ surpassed its record set in the previous week. Strong earnings reports from healthcare and communication services companies provided a positive catalyst.

Calmer seas

An index that measures investors’ expectations of short-term stock market volatility fell to its lowest level in nearly six months, before the coronavirus pandemic upended the market. The Cboe Volatility Index ended the week at around 22―still above its historic average, but far below the record closing high of nearly 83 that it set in mid-March.

Source: https://www.jhinvestments.com/weekly-market-recap