John Hancock: Weekly Market Recap Week Ended August 13th

Revenue outperformance

The quarterly earnings season that’s now wrapping up is expected to produce a record number of companies beating Wall Street analysts’ revenue expectations. As of Friday, 87% of S&P 500 companies had exceeded second-quarter revenue estimates—the highest so-called beat rate since FactSet began tracking that data in 2008. Over the past five years, the average has been 65%.

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U.S. job openings rose by 590,000 to 10.1 million in the latest monthly count, setting a record high and exceeding most economists’ expectations. The increase means there are now more job openings than unemployed Americans seeking work—a sign of an unusually tight labor market.

Mixed inflation report

Although U.S. consumer prices continue to rise at a much faster pace than they have in recent years, the rate of acceleration moderated in July and was in line with economists’ expectations. The Consumer Price Index rose 5.4% compared with the same month a year earlier, but July’s increase was lower than June’s rise on a seasonally adjusted basis. 

Yield volatility

Friday’s report on falling U.S. consumer confidence sent prices of U.S. government bonds higher, pushing yields lower. The yield of the 10-year U.S. Treasury bond fell on Friday to around 1.30%, down from 1.36% on Thursday. Yields remain far below a recent peak of 1.74% in March.

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