John Hancock: Weekly Market Recap Week Ended July 15th

No inflation relief

After climbing to an annual rate of 8.6% in May, the Consumer Price Index rose to 9.1% in June, the highest level since November 1981. Excluding volatile energy and food prices, core inflation rose 0.7% on a month-to-month basis, up from 0.6% in the previous two months.

Retail resilience

U.S. retail sales rose 1.0% in June, slightly above expectations despite surging inflation and recently weak consumer sentiment readings. However, the sales gain that the government reported on Friday wasn’t adjusted for inflation, which rose 1.3% in June, indicating that real sales were slightly negative.

Earnings kickoff

A handful of major U.S. banks kicked off earnings season with mixed results. Entering earnings season, analysts were forecasting that second-quarter earnings for banks in the S&P 500 fell 26% from a year ago, in part due to higher costs from provisions for loan losses, according to FactSet.

Fed ahead

With the U.S. annual inflation rate now at 9.1%, policymakers face pressure to approve another big interest-rate increase at Wednesday’s U.S. Federal Reserve policy meeting. At its mid-June meeting, the Fed lifted its short-term target range by three-quarters of a percentage point— the biggest hike since 1994—and a similar steep increase is expected heading into this week’s gathering, with some economists expecting rates will go up a full percentage point.

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