John Hancock: Weekly Market Recap Week Ended May 17th

Trade progress

While tensions with China escalated, the Trump administration reported progress in trade talks with other nations. On Friday, negotiators reached an agreement with Canada and Mexico to end U.S.-imposed tariffs on steel and aluminum, and the United States delayed a tariff decision involving imported auto parts.

Retail therapy

A flurry of reports from retailers is closing out quarterly earnings season, and several major chains reported strong first-quarter results in the latest week. While more retailers will be reporting data through the end of May, about 80% of those that have announced results so far have beaten analysts’ earnings estimates.

Buyback bonanza

U.S. companies are continuing to buy back shares of their stocks at a rapid clip. As of May 16, reported stock buybacks in the first quarter of this year were up nearly 8% from the same period a year earlier, according to S&P Dow Jones Indices.  

Yield compression

Amid the recent rise in stock market volatility, investors have been bidding up prices of government bonds, sending their yields lower. The yield of the 10-year U.S. Treasury bond slipped to 2.37% on Wednesday—its lowest level of the year—while the yield of Germany’s 10-year bond sank to its lowest level in three years.