John Hancock: Weekly Market Recap Week Ended April 17th
While stocks’ latest weekly gains were far short of the previous week’s double-digit surges, the major indexes recorded their first back-to-back positive weeks since the market sell-off began in mid-February. The Dow rose more than 2%, the S&P 500 added 3%, and the NASDAQ climbed 6% amid incremental progress in attempts to combat the coronavirus pandemic.
With the opening week of earnings season now behind us, analysts expect companies in the S&P 500 will report an overall 14.5% decline by the time all first-quarter results have been reported, according to FactSet. That’s worse than the 12.0% earnings drop that had been predicted before major U.S. banks kicked off earnings season in the latest week. Many of those banks reported profits that were below expectations.
Prices of government bonds extended their recent rally, as the yield of the 10-year U.S. Treasury bond slipped to as low as 0.59% at one point on Friday before closing at 0.66%. Yields of 2- and 30-year debt also fell, and the yield curve continued to flatten.
The coronavirus’ impact on the U.S. labor market deepened, with another 5.2 million Americans submitting unemployment claims in the latest weekly period. Over the last four weeks, jobless claims totaled nearly 22 million—a trend that is certain to trigger a huge jump in the unemployment rate in coming months.