John Hancock: Weekly Market Recap Week Ended August 11

Moody’s downgrades

Moody’s cut the credit rating of 10 small and midsize U.S. banks on Monday, noting it has several larger lenders under review. The move from the ratings agency reflects the challenges the banking industry still faces, including increased lending costs and dampening profitability.

Inflation expectation

Inflation in the United States, as measured by the Consumer Price Index, came in at 3.2% in July on Thursday, slightly below market expectation. Core inflation, which excludes energy and food, rose 0.2% for the month, the same rate as in June. This suggests that price pressures are moderating, a development that could lead the Fed to consider pausing rate hikes.

Consumer sentiment slides

After reaching a high in July, U.S. consumer sentiment fell slightly in mid-August but remained elevated compared with the same time last year. A preliminary reading of the Consumer Sentiment Index fell from 71.6 in July to 71.2 in August, according to survey data released on Friday by the University of Michigan, noting that consumers saw “few material differences in the economic environment from last month.”

Sales check ahead

A report on U.S. retail sales scheduled to be released on Tuesday will indicate whether the mixed picture that emerged from June’s report extended into July. In June, sales rose by 0.2% from the previous month, short of most economists’ expectations; however, the previous month’s sales growth figure was revised upward to 0.5%.

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