John Hancock: Weekly Market Recap Week Ended August 21st

Retail earnings jump

A difficult quarterly earnings season is wrapping up on a strong note, as several major retailers reported surging sales that exceeded analysts’ expectations. Among them was Target, which reported the largest quarterly sales growth in its 58-year history, with online sales driving much of the surge.

Mixed global outlook

Economic activity at U.S. companies has been picking up speed at a faster rate than it has in most other parts of the world. Data released on Friday from purchasing manager indexes showed that U.S. firms are seeing demand return as they reopen from coronavirus-related lockdowns imposed in the spring and early summer.

Cautious Fed

The U.S. Federal Reserve is prepared to extend further support for the U.S. economy, but it’s remaining vague as to when it might take further action. Minutes released from the Fed’s policy meeting in late July showed that board members believed more government spending would be needed to prevent a longer or deeper downturn as many states struggle to contain the coronavirus.

GDP ahead

Investors will be closely watching a report scheduled to be released on Thursday that will provide an updated government estimate of second-quarter GDP. An initial estimate released on July 30 showed that U.S. economic output fell at an annualized rate of 32.9%, the worst contraction on record. 

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