John Hancock: Weekly Market Recap Week Ended May 1st

April blooms

Although stocks remained down sharply year to date, April was one of the best months in decades, with the S&P 500’s total return of nearly 13% stacking up as the market’s best monthly result since January 1987. The Dow added 11% and the NASDAQ gained more than 15%—that index’s biggest monthly increase since June 2000.

Earnings halfway mark

Analysts’ overwhelmingly negative expectations for first-quarter earnings results improved marginally over the latest week. With earnings reports in from more than half of the companies in the S&P 500 Index as of May 1, analysts expected a 13.7% decline by the time all first-quarter results have been released, according to FactSet. That’s better than the 16.1% decline that had been projected a week earlier.

Shrinking economies

An initial estimate showed that U.S. GDP shrank 4.8% in this year’s first quarter compared with the previous quarter—the first contraction since early 2014 and the worst result since late 2008. Initial GDP figures in many other major economies also turned negative, with a 3.8% overall decline across the 19 European countries that use the euro as their currency.

Fed’s commitment

As expected, the U.S. Federal Reserve Board kept currently ultralow interest rates unchanged. At the close of Wednesday’s meeting, Chairman Jerome Powell pledged to keep rates low, and he warned that it’ll take time for the economy to heal even after businesses begin to reopen amid continuing efforts to contain the coronavirus.

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