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John Hancock: Weekly Market Recap Week Ended February 14th

February 18, 2020

 

Earnings engine

With earnings season winding down, the information technology sector has emerged as the biggest driver of earnings growth. As of February 13, the sector had accounted for 63% of fourth-quarter earnings growth across the S&P 500, according to FactSet. The broad market’s overall earnings growth rate is expected to be modest, at about 0.7%.

 

Growth crushes value

Strong results from information technology stocks have helped growth stocks outperform their value counterparts by a big margin year to date, extending growth’s run of dominance in recent years. Through Friday, a growth stock index was up nearly 9% year to date, while its value counterpart was up 1%.

 

Watchful Fed

In testimony before Congress, U.S. Federal Reserve Chairman Jerome Powell said it’s too soon to say whether the coronavirus outbreak could change the central bank’s views on its current interest-rate policies. Powell said the Fed will carefully watch the scope of the outbreak and its impact on the U.S. and global economies.

 

Stable inflation

A gauge of inflation was unchanged at an annual rate of 2.3% for the fourth month in a row, excluding volatile food and energy prices. The latest monthly Consumer Price Index figure is slightly above the U.S. Federal Reserve’s 2.0% target for inflation.

 

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