John Hancock: Weekly Market Recap Week Ended August 5th
Earnings momentum
Earnings performance continued to improve, as second-quarter profits at companies in the S&P 500 were expected to increase 6.7%, based on companies that have reported so far and forecasts for firms that haven’t yet released earnings, according to FactSet. That’s up from the 5.8% rise that had been projected at the end of the previous week. About 87% of companies had reported results as of Friday.
Jobs surprise
Despite the recent slowdown in U.S. economic growth, the labor market continues to exceed expectations. The government reported on Friday that the economy added 528,000 jobs in July—far exceeding most economists’ forecasts—and unemployment slipped to 3.5% from 3.6%.
Bond price sell-off
Friday’s stronger-than-expected jobs report added to the selling pressure on prices of government bonds, sending yields sharply higher. The yield of the 10-year U.S. Treasury bond climbed to around 2.84% on Friday, up from 2.64% at the end of the previous week.
Price check ahead
A Consumer Price Index report scheduled to be released on Wednesday will show whether the U.S. economy got any relief last month from surging inflation. In June, inflation accelerated at an 9.1% annual rate—the highest in more than four decades and above the previous month’s 8.6% figure.
Source: https://wmr.jhinvestments.com/