John Hancock: Weekly Market Recap Week Ended August 12th

Calming trend

The 8% drop in an index that measures investors’ expectations of short-term U.S. stock market volatility marked the index’s eighth weekly decline in a row. The Cboe Volatility Index on Friday closed about 43% below a recent peak set in mid-June.

Inflation moderation

Although U.S. inflation remains near its highest level since the early 1980s, the latest monthly Consumer Price Index report brought some relief, which triggered a stock market rally on Wednesday. Inflation rose at an annual 8.5% rate in July, marking a slowdown from the previous month’s 9.1% figure. Falling gasoline prices were largely responsible for the decline.

Price pressures ease

The day after the U.S. government reported a modest slowdown in consumer price inflation, a separate report showed a similar easing in suppliers’ wholesale prices. The Producer Price Index rose at a 9.8% annual rate in Julyꟷthe slowest pace since October 2021, and down from 11.3% in June of this year.

Improving sentiment

A monthly gauge of U.S. consumer sentiment rose, marking the second monthly gain since it fell in June to the lowest level in records dating to 1952. Friday’s preliminary report from the University of Michigan’s consumer sentiment index also indicated that consumers’ future inflation expectations improved but remained elevated.

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