John Hancock: Weekly Market Recap Week Ended January 15th
With quarterly earnings season just starting, Wall Street analysts expect companies in the S&P 500 to report a 6.8% decline in net income compared with the prior year’s fourth quarter, according to FactSet. Of the 26 companies that had reported as of Friday, all but one exceeded expectations.
For the third week in a row, small caps outperformed as the Russell 2000 Index, a small-cap benchmark, posted a modest gain while large-cap indexes declined. Since the end of September 2020, the Russell 2000 has surged 41%.
Although the U.S. economy has recovered more than half of the 22 million jobs lost early last year as the pandemic emerged, new unemployment claims continue to grow. Total claims jumped to 965,000 in the latest weekly report—the most since last summer, and a sign that the rising numbers of coronavirus cases have triggered additional layoffs.
Although inflation has generally remained subdued amid the pandemic, U.S. consumer prices increased solidly in December. However, the 0.4% increase in the consumer price index was largely attributed to the rising cost of gasoline. In November, the index rose just 0.2%.