John Hancock: Weekly Market Recap Week Ended April 8th

Earnings slowdown

Relative to recent quarters, expectations are low heading into earnings season, which opens this week as major banks begin reporting first-quarter results. As of Friday, analysts surveyed by FactSet were expecting companies in the S&P 500 to post earnings increases averaging 4.5% compared with the same period a year earlier. If the growth rate ends up close to that figure, it would mark the first time in two years that quarterly earnings growth fell short of 10%.   

Inflation checkup

A Consumer Price Index report scheduled to be released on Tuesday will show whether the U.S. economy got any relief in March from surging inflation. A month earlier, the government reported that inflation accelerated in February at a 7.9% annual rate—the highest in four decades—eclipsing the previous month’s 7.5% figure. 

Fed outlook

Wednesday’s release of minutes from the U.S. Federal Reserve’s mid-March meeting showed that policymakers discussed the possibility of raising the Fed’s benchmark interest rate by a half-percentage point at a meeting scheduled early next month. At the recent meeting, officials considered raising the rate by a half-point, but instead approved a smaller quarter-point increas

Tight labor market

With the U.S. unemployment rate at just 3.6%, initial applications for unemployment benefits are also dropping to unusually low levels. Thursday’s latest weekly count of unemployment claims fell to 166,000—the lowest weekly figure since 1968, and down 5,000 from the previous work.

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