John Hancock: Weekly Market Recap Week Ended December 23rd

U.S. inflation moderation

The U.S. Federal Reserve’s preferred gauge for tracking inflation showed a further cooling of price hikes. The government reported on Friday that its Personal Consumption Expenditures Price Index rose at an annual 5.5% rate in November, down from a 6.1% in October. Excluding food and energy prices, prices rose at a 4.7% annual rate versus 5.0% in October.

2022 sector outlook

Looking ahead to 2023, many Wall Street analysts have a positive view of three equity sectors: energy, communication services, and information technology. Those were the sectors that had the highest percentages of “buy” ratings from analysts, as of December 19, according to FactSet. Those with the lowest percentages of buy ratings: consumer staples, financials, and materials.

Buyback decline

U.S. companies continued to buy back shares at a slower pace for the third quarter in a row. In this year’s third quarter, share repurchases by companies in the S&P 500 totaled $210.8 billion, down 4% from the second quarter, according to S&P Dow Jones Indices. Relative to the third quarter of 2021, buybacks were down 10%.

Yield surge

Prices of government bonds fell sharply, sending their yields higher, after Japan’s central bank on Monday widened its target range for yields of Japanese 10-year bonds. In the United States, the yield of the 10-year U.S. Treasury bond climbed to 3.75% on Friday, up from 3.48% a week earlier.

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