John Hancock: Weekly Market Recap Week Ended March 18th

Fed plots a path

The U.S. Federal Reserve raised interest rates for the first time since 2018, following through on market expectations to lift its benchmark lending rate by a quarter of a percentage point to a range of 0.25% to 0.50%. Looking ahead, policymakers indicated they’re inclined to raise rates at each of their six remaining policy meetings scheduled through the end of 2022.

Pressure drop

A measure of U.S. investors’ expectations of short-term stock market volatility retreated sharply for the second week in a row. The Cboe Volatility Index on Friday fell to around 24, down from 37 as recently as March 8. For the latest week, the so-called VIX fell about 22%.

Yield surge

Amid a rising-rate environment and high inflation, prices of government bonds fell, sending yields sharply higher for the second week in a row. The yield of the 10-year U.S. Treasury bond climbed to about 2.15% on Friday—the highest level in nearly three years, and up from 1.73% just two weeks earlier.

Buyback boom

Companies in the S&P 500 spent $270 billion on share repurchases in last year’s fourth quarter, topping the previous record set in the preceding quarter, according to data released Tuesday by S&P Dow Jones Indices. The latest quarterly stock buyback total is more than double the figure from the fourth quarter of 2020.  

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