John Hancock: Weekly Market Recap Week Ended January 17

Strong earnings kickoff

Results from major U.S. banks topped the market’s lofty expectations, with three institutions reporting that fourth-quarter earnings more than doubled relative to a year earlier. Entering earnings season, analysts were forecasting that S&P 500 financials sector earnings jumped nearly 40%―the strongest growth forecast among all 11 sectors, according to FactSet.

Yield reversal

U.S. government debt yields retreated, pulling back from the highest levels in more than 14 months and interrupting a surge that began last September. The yield of the 10-year Treasury note was around 4.61% at Friday’s close, down from 4.77% the previous week.

Retail setback

U.S. retailers posted a smaller-than-expected increase in sales during December, with a 0.4% gain versus economists’ consensus expectations of 0.6%. The silver lining in Thursday’s report was that November’s initially reported retail sales gain of 0.7% was adjusted upward to 0.8%.

Inflation moderation

Stocks climbed and bond yields fell on Wednesday after the latest Consumer Price Index report, which showed a pause in a recent trend of hotter-than-expected inflationary readings. In December, core CPI excluding volatile energy and food prices rose at an annual rate of 3.2%―slightly less than the previous month and below economists’ consensus expectations for 3.3%.

SOURCE: https://www.jhinvestments.com