John Hancock: Weekly Market Recap Week Ended August 28th

Upward trend

The major U.S. stock indexes climbed around 3% and the S&P 500 recorded its eighth positive week out of the past nine. The S&P 500 and the NASDAQ continued to set new record highs; the Dow turned positive year to date while remaining about 3% below its historic peak.  

GDP drop-off

The record plunge in U.S. economic output in the second quarter wasn’t quite as steep as initially estimated. A revised government estimate issued on Thursday put the GDP decline at 31.7%, compared with a 32.9% estimate released in late July. It’s expected that third-quarter data will show that GDP began to rebound, returning to an expansionary trend.

Lower for longer

U.S. Federal Reserve Chairman Jerome Powell announced a shift in how the Fed views inflation, saying it won’t increase interest rates to respond to low unemployment levels and also won’t worry as much about low rates triggering a rise in prices. A review concluded that inflation could temporarily run slightly over the Fed’s 2% target if that’s what’s needed to maintain labor market strength. 

Jobs ahead

Friday’s monthly jobs report is expected to be the week’s most closely watched economic release and a key indicator of the labor market’s progress in recovering from the spring’s record-breaking job losses. The last monthly report showed that the economy generated nearly 1.8 million jobs in July as the unemployment rate fell to 10.2%.

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