John Hancock: Weekly Market Recap Week Ended October 7th

Rising yields

The yield of the 10-year U.S. Treasury bond rose yet again in another volatile week in the bond market. On the heels of Friday’s monthly jobs report, the yield climbed to around 3.88%—down from a recent high of 3.96% on September 27, but still near the highest level in 14 years.

Jobs and the Fed

Stocks fell on Friday after a solid monthly jobs report raised expectations that the U.S. Federal Reserve next month will approve a 0.75 percentage point interest-rate increase for the fourth meeting in a row. Although September’s jobs gain total of 263,000 was down from the prior month’s 315,000 figure, it was modestly above economists’ expectations, and the unemployment rate slipped to 3.5% from 3.7%.

Earnings outlook

As major banks prepare to open third-quarter earnings season this week, the number of companies that recently raised their earnings forecasts exceeded the totals that lifted their outlooks prior to the previous two quarters, according to FactSet. Nevertheless, companies in the S&P 500 are expected to report the lowest year-over-year earnings growth since the third quarter of 2020.

Price check ahead

A Consumer Price Index report scheduled to be released on Thursday will show whether the recent moderation in inflation extended into September. In August, inflation rose at an annual 8.3% rate, marking a slight slowdown from the previous month’s 8.5% figure, largely due to falling gasoline prices.

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