John Hancock: Weekly Market Recap Week Ended February 3rd

Monetary moves

As expected, the U.S. Federal Reserve lifted its benchmark rate by a quarter-percentage point—smaller than the half-point hike approved in November—while acknowledging that inflation has recently eased. The next day, the European Central Bank and the Bank of England both lifted their key rates by a half-percentage point.

Jobs bonanza

Friday’s monthly labor report sharply exceeded economists’ expectations, as the economy added 517,000 jobs in January—the most since last July—and initial job gain estimates for November and December were revised upward by a total of 71,000. The unemployment rate slipped to 3.4%, the lowest since 1969.

Mixed results

Halfway through earnings season, the proportion of S&P 500 companies that have beaten analysts’ earnings expectations remained slightly smaller than usual. About 70% had exceeded net income expectations as of Friday, trailing the five-year average of 77%, according to FactSet. Overall, earnings are expected to decline about 5% relative to a year ago.

Strong January

For the first time in four years, the S&P 500 posted a positive result in January, as the index rallied to a 6.2% gain for the month. Across the S&P 500, consumer discretionary and communication services were the top-performing sectors, as they added 15% and 14%, respectively; utilities and healthcare were the weakest, with both falling around 2.0%.

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