John Hancock: Weekly Market Recap Week Ended July 30th

GDP update

The U.S. economy continues to have some growing pains amid a persistent pandemic. The government’s initial estimate showed that GDP expanded at a 6.5% annualized rate in the second quarter—only slightly better than the 6.3% rate in the first quarter and below most economists’ expectations for around 8.0%. 

Upbeat earnings 

Earnings season continued to exceed expectations. Second-quarter profits at companies in the S&P 500 were expected to surge 85% as of Friday, based on companies that have reported so far and forecasts for upcoming reports, according to FactSet. That’s up from the 63% gain that had been forecast at the end of June. The 85% figure—if realized once earnings season concludes—would mark the highest year-over-year earnings growth since the fourth quarter of 2009. 

Fed rate outlook

U.S. Federal Reserve Chairman Jerome Powell said that the central bank was nowhere near considering plans to raise interest rates. He said that an increase is not yet “on our radar screen” despite the economy’s continued progress toward the Fed’s goals of achieving low unemployment and stable inflation.

Jobs ahead

A monthly employment report scheduled to be released on Friday will show whether June’s acceleration in the pace of jobs growth extended into July. In June, the economy generated 850,000 new jobs, exceeding most economists’ expectations, and topping the April and May job growth figures of 269,000 and 583,000, respectively.

Source: https://wmr.jhinvestments.com/