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John Hancock: Weekly Market Recap Week Ended January 8th

January 12, 2021

 

Surging small caps 

After posting a record-breaking quarterly gain of 31% in the just-completed fourth quarter, a small-cap benchmark, the Russell 2000 Index, extended its rally into the new year. The index jumped around 6%, with most of the weekly rise coming from Wednesday’s single-day jump of 4%.

 

Jobs setback

Friday’s monthly U.S. labor market report marked the first time since April 2020 that jobs have declined rather than increased. The government reported a drop of 140,000 jobs; most economists had been predicting a gain of around 50,000. The labor market has nearly 10 million fewer jobs than it did in February 2020.

 

Earnings upgrade

Wall Street analysts’ profit forecasts for the quarterly earnings season that opens this week have recently been rising. According to FactSet, projections of earnings by companies in the S&P 500 increased by 2.3% over the course of last year’s fourth quarter.

 

Dividend restoration

A growing number of U.S. companies that cut dividends in response to the pandemic’s impact began to restore those payment levels in the just-completed fourth quarter. Net dividend changes—factoring in decreases as well as increases—totaled $9.5 billion, compared with a decline of $2.3 billion in the third quarter of 2020, according to S&P Dow Jones Indices.

 

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