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John Hancock: Weekly Market Recap Week Ended September 2nd

September 7, 2022

 

Jobs consistency

The U.S. labor market didn’t generate new jobs in August at the same rapid clip that it did in July, but the latest month’s gain of 315,000 was slightly above most economists’ expectations. The unemployment rate rose to 3.7% from 3.5%, but that increase stemmed in part from a rise in Americans entering the labor force by seeking employment.

 

Earnings scorecard

Companies in the S&P 500 posted an average second-quarter earnings gain of 6% over the same quarter a year earlier, according to FactSet data from the recently concluded earnings season. That result marked the slowest growth rate since the fourth quarter of 2020. For the second quarter in a row, energy was the strongest among all 11 sectors, with earnings growth of 293% in the latest quarter.

 

Surging 10-year yield

Growing expectations for further sharp interest-rate increases weighed on prices of U.S. government bonds, sending the yield of the 10-year U.S. Treasury bond up for the fifth week in a row. The yield climbed to around 3.20% on Friday, up from 2.64% at the end of July.

 

2-year yield spike

Before closing the week at 3.40%, the yield of the 2-year U.S. Treasury bond on Thursday climbed to 3.52%, the highest level since 2007. The 2-year yield is especially sensitive to the near-term outlook for U.S. Federal Reserve policy and expectations for another big interest-rate increase to be announced on September 21.

 

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

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RISK: There are risks involved with investing, including loss of principal. Current and future portfolio holdings are subject to risks as well. Diversification may not protect against market risk. There is no assurance the goals of the strategies discussed will be met. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from difference in generally accepted accounting in principles or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Bonds and bond funds will decrease in value as interest rates rise. These and other risks are described more fully in the fund’s prospectus. CREDIT RISK: The issuer of a fixed income security may not be able to make interest and principal payments when due. The lower the credit rating of a security, the greater the risk of default on its obligation.

Investors should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. This and other information is contained in the Fund’s prospectus and summary prospectus, which may be obtained online or by calling 1-888-507-2798.

Please read the prospectus carefully before investing.