John Hancock: Weekly Market Recap Week Ended April 19

Delaying expectations

U.S. Federal Reserve Chair Jerome Powell conceded that it’s “likely to take longer than expected” to gain confidence that inflation is on a sustainable downward track. Powell on Tuesday reinforced recent messaging about a delayed timeline for interest-rate cuts, saying “it’s appropriate to allow restrictive policy further time to work.”

Yields rise again

Yields of U.S. government bonds rose for the third week in a row as investors continued to rein in their expectations for near-term interest-rate cuts. The yield of the 10-year U.S. Treasury bond briefly rose as high as 4.69% on Tuesday—the highest since last November—before retreating somewhat to close at 4.61% on Friday.

China’s comeback

China’s government reported that the nation’s GDP grew at an annual rate of 5.3% in this year’s first quarter, exceeding most economists’ expectations. The result follows implementation of stimulus measures that are designed to bring the world’s second-largest economy closer to prepandemic growth rates.

U.S. GDP ahead

Thursday’s scheduled release of the U.S. government’s initial estimate of first-quarter GDP is expected to show that the economy remained on a solid growth track but slowed relative to last year’s fourth quarter, when GDP grew at a 3.4% annual rate. An estimate released on Tuesday by U.S. Federal Reserve economists projected a first-quarter growth rate of 2.9%.

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