John Hancock: Weekly Market Recap Week Ended January 3

Sector stories

The past year saw wide disparities in U.S. equity performance at the sector level. Communication services and information technology were far and away the top performers for the second year in a row; in 2024, they generated total returns of 40.2% and 36.6%, respectively, according to S&P Dow Jones Indices. The materials sector posted the weakest result with a slightly negative return.

Earnings outlook

As major U.S. banks prepare to open quarterly earnings season in mid-January, analysts expect that fourth-quarter earnings per share for all companies in the S&P 500 rose by an average of 11.9%, according to FactSet. Such an outcome would mark the highest year-over-year earnings growth rate since the fourth quarter of 2021.

As January goes …

Historically, January’s stock market performance has been a strong indicator of what may be in store for the rest of the year. In fact, about 71% of the time since 1929, the S&P 500 has posted a positive return for the year after gaining ground in January or has gone on to post an annual loss when the market has declined in the first month, according to S&P Dow Jones Indices.

Jobs ahead

A monthly labor market report due out on Friday will show whether a recently uneven trend in U.S. jobs growth extended into December. In November, the economy generated 227,000 new jobs—far above October’s weak result of 36,000 jobs but slightly below September’s 255,000 figure.

Source: https://www.jhinvestments.com/weekly-market-recap#market-moving-news