John Hancock: Weekly Market Recap Week Ended January 24th

Earnings scorecard

It’s the peak of earnings season, with nearly 150 companies in the S&P 500 Index and 14 of the Dow’s 30 components scheduled to report quarterly results in the week that starts January 27. Through January 23, 73% of companies reported earnings that exceeded analysts’ estimates—a beat rate that ranks above the five-year average, according to FactSet.

Brexit’s arrival

The leaders of the European Union and the United Kingdom signed an agreement to move ahead with the long-delayed Brexit. The nation’s formal separation from the EU is scheduled for January 31, although Britain has agreed to abide by EU rules during a transition period until the end of this year.

Yields drop

Prices of government bonds extended their year-to-date climb, sending yields sharply lower, as the yield of the 10-year U.S. Treasury bond slipped below 1.70% on Friday for the first time in more than three months. At the end of 2019, the yield was 1.92%.

Fed ahead

The U.S. Federal Reserve is widely expected to keep interest rates unchanged when it concludes a two-day meeting on Wednesday. Fed statements will be closely watched for any indications as to whether the central bank will bolster market expectations that it could maintain its current neutral stance on rates throughout 2020, absent any big surprises in the economic outlook.

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