John Hancock: Weekly Market Recap Week Ended March 11

Nearly 8% inflation

Prices of stocks and bonds fell on Thursday after the government reported that U.S. inflation accelerated at a 7.9% annual rate in February, eclipsing the previous month’s 7.5% figure. Excluding food and energy—both of which moved sharply higher during the month—core inflation still rose 6.4%.

Losing traction

The S&P 500 fell nearly 3%, declining for the fourth week out of the past five and extending the stock market’s rough start for the year. The war in Ukraine continued to drive markets, and a rally on Wednesday wasn’t enough to offset negative daily results the rest of the week, including a steep decline on Monday.

Unstable yields

Fears about inflation and war made it a volatile week for government bonds. After finishing the previous week at 1.73%, the yield of the 10-year U.S. Treasury bond jumped on Tuesday, Wednesday, and Thursday, when it breached 2.00%—a threshold previously reached in mid-February, but not sustained for more than a few days.

Fed liftoff

With inflation surging at a 7.9% annual rate, U.S. Federal Reserve policymakers are widely expected to begin lifting interest rates when they conclude a two-day meeting on Wednesday. Federal Chair Jerome Powell told Congress earlier this month that he was strongly inclined to support a quarter-percentage-point rate increase, rather than the half-point jump that some have supported for the upcoming meeting.

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