John Hancock: Weekly Market Recap Week Ended April 16th
Quarterly earnings season got off to a strong start, with profits of companies in the S&P 500 expected to rise around 30% as of Friday, based on the relatively small number of companies that have reported so far and forecasts for upcoming reports. That 30% growth rate exceeds the 25% gain that had been expected prior to the start of earnings season, according to FactSet.
For the third week out of the past four, yields of U.S. government debt slipped as bond prices recovered, eroding some of 2021’s surge in yields. The yield of the 10-year U.S. Treasury bond fell to 1.57%, down from a recent high of 1.74% on March 31. Nevertheless, the yield is still up sharply from 0.92% at the end of last year.
Two reports released on Thursday suggested an acceleration in the U.S. economic recovery. Retail sales jumped 9.8% in March, and first-time unemployment claims fell to 576,000 in the latest weekly count—the lowest level since the pandemic began to severely weaken the labor market.
A monthly measure of U.S. consumer prices rose for the fourth month in a row and the pace of inflation hit the highest level in two and a half years. The Consumer Price Index jumped 0.6% in March, slightly higher than economists had expected. On an annual basis, inflation is at 2.6%.