John Hancock: Weekly Market Recap Week Ended August 29
GDP upgrade
The U.S. economy expanded in the spring at a slightly faster rate than initially estimated. Thursday’s update pegged the second quarter’s annual GDP growth at 3.3%, up from a 3.0% estimate released a month earlier. That growth marks a turnaround after the first quarter’s slight GDP contraction. Recent results have been skewed by elevated tariffs, which fueled shifts in the flow of imports relative to domestic goods.
Gold record
The price of gold futures rose for the second week in a row and reached a record high of as much as $3,518 per ounce in Friday afternoon trading—up more than 31% year to date. Much of the week’s gain came after a Friday morning release of inflation data.
Earnings scorecard
Companies in the S&P 500 posted an average earnings gain of 11.7% over the same quarter a year earlier, according to FactSet data from the recently concluded second-quarter earnings season. That result marked the third consecutive quarter of double-digit growth but was a modest slowdown from the previous quarter’s 12.9% year-over-year growth rate. Communication services posted a 46.0% earnings gain, the highest among all 11 sectors.
Fed rate outlook
Bond market trading continued to support recently growing expectations that the U.S. Federal Reserve is likely to cut its benchmark rate at its two-day meeting ending September 17. As of Friday afternoon, prices in rate futures markets implied an 88.9% probability that the Fed would cut by a quarter point, according to CME Group’s FedWatch tool. For more details on the outlook, explore the latest thinking from our co-chief investment strategists here.
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