John Hancock: Weekly Market Recap Week Ended January 22nd
As of Friday, 86% of the S&P 500 companies that had reported fourth-quarter results exceeded analysts’ earnings estimates, according to FactSet. That so-called beat rate ranks above the 74% five-year average, and FactSet says it could lead to the first overall quarterly earnings increase since the fourth quarter of 2019.
The U.S. housing market continues to be a positive catalyst for the financial markets and the broader economy. The National Association of Realtors reported that sales of previously owned homes rose in 2020 to the highest level since 2006, lifted in part by ultralow interest rates.
In a reversal from the previous week, U.S. growth stocks outperformed their value counterparts by a wide margin, as a growth stock benchmark climbed nearly 4% while a value benchmark fell slightly. That’s in line with results in 2020, a year when growth outperformed by a wide margin.
The U.S. Federal Reserve is widely expected to keep its benchmark interest rate unchanged—and at a near-zero level—when it concludes a two-day meeting on Wednesday. Fed statements will be closely watched for any indications about the central bank’s intentions to maintain its current monetary policy stance throughout 2021.