John Hancock Weekly Market Recap: Week Ended July 20th

Earnings update

The first two weeks of quarterly earnings season have generally been strong. According to FactSet, companies in the S&P 500 are on track to report their second-fastest pace of earnings growth since 2010. Banks opened the earnings season a couple weeks ago, and major technology companies began to report results last week.

Baby steps

Although gains were tiny, the Dow and the S&P 500 climbed for the third week in a row, extending a run of strong performance this month. While those two indexes remained well below their record levels set in late January, the NASDAQ set a record high on Tuesday before finishing slightly down for the week.

Fed outlook

In testimony before Congress, U.S. Federal Reserve Chairman Jerome Powell reaffirmed the Fed’s intent to continue gradually raising interest rates if economic growth remains solid. He said it was too soon to say whether rising trade tensions might disrupt the Fed’s outlook for further rate hikes.

Yield stability

Although an uptick in inflation helped to send the yield of the 10-year U.S. Treasury bond above 3.00% in the spring, the yield has recently stabilized at a lower level amid solid demand for government debt. The yield has stayed in a narrow range from 2.83% to 2.89% since June 25.

Source: jhinvestments.com, John Hancock Investments