John Hancock: Weekly Market Recap Week Ended September 13

Inflation moderation

Stocks rose after a Consumer Price Index reading provided one of the last data points for the U.S. Federal Reserve prior to its consideration of an interest-rate cut at a meeting scheduled to conclude on Wednesday. The inflation report showed that consumer prices rose at a 2.5% annual rate in August, down from July’s 2.9% figure and the lowest since February 2021.

Yields decline

Yields of U.S. government bonds extended their recent slide amid expectations of an interest-rate cut, and the yield of the 10-year U.S. Treasury bond sank to the lowest level since June 2023. Friday’s closing yield was 3.66%, down from a recent high of 4.70% in April.

Gold record

The price of gold futures on Friday rose above $2,600 per ounce for the first time, extending a recent price surge for the precious metal. At the end of last year, gold was trading around $2,060; it eclipsed the $2,500 level for the first time on August 19.

Fed pivot ahead

At its two-day meeting concluding on Wednesday, the U.S. Federal Reserve is expected to deliver its first interest-rate reduction since early 2020. Fed Chair Jerome Powell reaffirmed market expectations for a cut when he declared in an August 23 speech that “the time has come for policy to adjust.” However, it remained uncertain as of Friday whether the Fed is more likely to implement a 0.25% cut or a bigger 0.50% reduction.

Source: https://www.jhinvestments.com