John Hancock: Weekly Market Recap Week Ended November 3rd

Yield reversal

A shift in the U.S. interest-rate outlook triggered big weekly moves in the bond market, as yields of U.S. Treasuries fell, interrupting the trend of sharply rising yields seen over the past seven months. The yield of the 10-year U.S. Treasury bond fell to 4.52% on Friday, down from 4.83% the previous week; the 2- and 10-year yields fell well below their roughly 5.00% levels of the previous week.

Fed stays put

The U.S. Federal Reserve again kept interest rates unchanged—but at the highest level since 2001—while not foreclosing the possibility of approving another rate hike at its mid-December meeting. The central bank has now held rates steady for two meetings in a row, marking the longest period without an increase since the Fed began to lift rates from a near-zero level in March 2022.

Select seven

Absent this year’s strong gains for a group of just seven large, technology-oriented U.S. companies, the S&P 500’s year-to-date total return through the end of October would still be positive—but only barely. The S&P 500’s total return as of October 31 was 10.69%, including that group of seven; without them, the index’s return was a mere 0.03%, according to S&P Dow Jones Indices.

Jobs growth moderation

Stocks climbed following Friday’s jobs report, which showed a labor market cooldown that could leave the U.S. Federal Reserve less inclined to raise interest rates again in the short term. In October, the economy generated 150,000 new jobs—about half as many as in September and down from an average of 258,000 over the last 12 months. October’s unemployment rate edged upward to 3.9%.

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