John Hancock: Weekly Market Recap Week Ended September 3rd

August’s achievements

Despite sustaining a midmonth decline, the S&P 500 recovered to record its seventh positive month in a row, posting a return of about 3% in August. The index reached 12 record closing highs in the month versus 7 in July.

Growing optimism

Wall Street analysts’ expectations for the earnings report season that opens in mid-October have been rising. Over July and August, forecasts for third-quarter earnings of companies in the S&P 500 rose 3.8%, according to FactSet. That’s the fourth-largest such increase during the first two months of a quarter since 2009.

Pullback drought

One sign of the U.S. stock market’s recent period of relative calm is the long stretch since there’s been a sharp, sustained decline. The S&P 500 hasn’t suffered a 5% pullback since October 2020. The last time the index experienced such a long period without a big drop was from June 2016 to early February 2018.  

Shrinking jobs growth

U.S. payroll growth slowed sharply in August, according to a monthly report released on Friday. The economy generated 235,000 new jobs last month, far short of economists’ expectations and trailing gains of nearly 1.1 million in July and 962,000 in June. The unemployment rate fell to 5.2% from 5.4% in July. 

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