John Hancock: Weekly Market Recap Week Ended January 21st

Mixed results

Although Wall Street analysts continued to expect that companies in the S&P 500 will report a nearly 22% increase in earnings compared with the prior year’s fourth quarter, some subpar results on Friday from a handful of key companies didn’t provide much of a positive catalyst for stocks. Earnings season enters its busiest period during the trading week that begins on Monday.

Steeper descent

Stocks fell for the third week in a row, with major U.S. indexes posting their sharpest weekly declines since March 2020, early in the pandemic. The NASDAQ dropped nearly 8%, the S&P 500 fell almost 6%, and the Dow gave up nearly 5% as investors worried about everything from rising interest rates to geopolitical conflict in Ukraine.

High anxiety

A measure of investors’ expectations of short-term U.S. stock market volatility surged more than 50% for the week, and on Friday it reached the highest level since spiking in early December following the emergence of the Omicron variant of COVID-19. The Cboe Volatility Index—also known as the VIX—jumped to nearly 29 from around 19 at the close of the previous week.

Busy agenda

At a policy meeting on Wednesday, U.S. Federal Reserve Board members could give further indications as to how many interest-rate increases they expect to make this year to help control high inflation. The next morning, the government is scheduled to release an initial estimate of the nation’s GDP growth rate in the recently completed fourth quarter.

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