John Hancock: Weekly Market Recap Week Ended January 29th
The S&P 500 and the Dow fell 1% to 2% for the first month of the year while the NASDAQ posted a more than 1% gain, lifted in part by strong earnings from technology companies. The market’s positive start to 2021 reversed course entering the closing days of the month.
Although fourth-quarter earnings results continued to improve in the latest week, U.S. companies are still expected to report an overall earnings decline. With results in from more than one-third of companies in the S&P 500 as of Friday, earnings were projected to end up 2.3% lower than they were a year earlier, according to FactSet. That’s an improvement on the 4.8% decline that had been expected the previous week.
Fed holds steady
The U.S. Federal Reserve didn’t change its monetary policy stance at its latest meeting but noted that U.S. business activity has recently softened amid a resurgence in COVID-19 cases. The central bank expressed hope that vaccine distribution can help the economy recover.
A monthly labor market update due out on Friday is likely to be the week’s most closely watched economic report. The new release will show whether January marked the seventh consecutive month of a slowdown in jobs growth. In December, jobs fell by 140,000―the first time since April 2020 that jobs declined rather than increased.