John Hancock: Weekly Market Recap Week Ended January 7th

Mixed jobs report

Although December’s U.S. job growth total of 199,000 was well below most economists’ expectations, that disappointment was mitigated somewhat by revisions that boosted growth figures for the preceding two months by a total of 141,000. In addition, the unemployment rate fell to 3.9% and wages grew at a 4.7

Yield spike

Government bond prices tumbled, sending the yield of the 10-year U.S. Treasury bond briefly above 1.80% in intraday trading on Friday—the first time that level has been breached since January 2020, just as the pandemic was starting. The latest yield surge marks a big jump from the previous week, when the 10-year Treasury’s closing yield was 1.51%

Rate policy unease

Wednesday’s release of minutes from the U.S. Federal Reserve’s most recent policy meeting triggered much of the anxiety that rippled across markets. Fed officials last month discussed the possibility of an accelerated timetable for raising interest rates this year—potentially as soon as March—and expressed concerns about persistently high inflation.

Earnings outlook

With quarterly earnings season opening up this week, more companies in the S&P 500 have recently been reducing their earnings forecasts than lifting them, according to FactSet. While it’s been historically common for more companies to issue negative guidance than positive guidance, that’s not been the case during the pandemic; this earnings season marks the first time that reductions have exceeded increases since the second quarter of 2020.

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