John Hancock: Weekly Market Recap Week Ended February 23

Fed’s rate agenda

U.S. Federal Reserve officials expressed concern that recent progress in reducing inflation could be reversed by any strong growth in spending by consumers and hiring by businesses. Minutes of the Fed’s late January meeting that were released on Wednesday showed that some officials “noted the risk that progress toward price stability could stall.”

Inversion deepens

The current inversion of the yield curve deepened on Friday to its most extreme level year to date, as measured by the gap between the yields of 2- and 10-year U.S. Treasury bonds. The 2-year’s closing yield on Friday was 4.68% while the 10-year’s  was 4.26%—maintaining an inversion, with short-term debt yielding more than long-term debt.

Lagging small caps

An index of U.S. small-cap stocks slipped, becoming an outlier in an otherwise positive week for stocks. The Russell 2000 Index fell about 0.8% for the week, extending its run of year-to-date underperformance versus its large-cap peers.

GDP update ahead

Wednesday’s scheduled release of an updated U.S. GDP estimate will be among the week’s most closely watched economic reports. An initial estimate released in late January indicated that GDP expanded at an annual rate of 3.3% in last year’s fourth quarter, exceeding most economists’ expectations.

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