John Hancock: Weekly Market Recap Week Ended December 2nd

Fed pivot

Stocks rallied on Wednesday after U.S. Federal Reserve Chair Jerome Powell confirmed in a speech that smaller interest-rate increases could start as soon as the Fed’s December 13-14 meeting. Officials approved rate hikes of three-quarters of a percentage point at each of their last four meetings.

Jobs consistency

The labor market remains a source of strength in the weakened U.S. economy, as 263,000 new jobs were added in November. It marked the fourth consecutive month with jobs gains in the 200,000 to 300,000 range and the 23rd month in a row with at least 200,000.

Earnings scorecard

Companies in the S&P 500 posted an average earnings gain of 2.4% over the same quarter a year earlier, according to FactSet data from the recently concluded earnings season. That result marked the slowest growth rate since the third quarter of 2020. For the third quarter in a row, energy was the strongest among all 11 sectors, with earnings growth of 137.0% in the latest quarter.

Yield decline

The yield of the 10-year U.S. Treasury bond tumbled to its lowest level in two and a half months, settling around 3.51% on Friday after ending the previous week at 3.69%. The fall in yields came amid continuing signs that high inflation has recently been moderating.

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