John Hancock: Weekly Market Recap Week Ended January 16

Earnings kickoff

The big U.S. banks that opened earnings season reported mixed results. As of Friday, analysts projected that financials sector earnings rose 6.6% in the fourth quarter—slightly below the 8.2% average gain that’s forecast across all 11 sectors in the S&P 500, according to FactSet. Information technology is expected to post the strongest earnings growth, with consumer discretionary generating the weakest result.

Sales gain

U.S. retailers posted a slightly larger-than-expected increase in sales during November relative to the previous month, with a 0.6% gain versus economists’ consensus expectations of 0.4%. The retail report from the U.S. Census Bureau was released on a lagged basis, as the December data that would typically be available continued to be delayed due to the recent government shutdown.

Sizzling small caps

A U.S. small-cap benchmark outpaced its large-cap peers by a wide margin for the second week in a row, marking a sharp rotation from small caps’ lagging 2025 performance. With its more than 2% weekly gain, the Russell 2000 Index was up nearly 8% on a year-to-date basis versus less than 2% for a comparable large-cap index.

PCE inflation ahead

Thursday’s scheduled release of the U.S. Federal Reserve’s preferred inflation gauge will provide the Fed with a key data set heading into its next policy meeting, scheduled to conclude on January 28. Thursday’s release of the Personal Consumption Expenditures Price Index follows a recent trend of moderating inflation that has nevertheless remained above the Fed’s 2% long-term target.

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