John Hancock: Weekly Market Recap Week Ended December 22

Consumer turnaround

After four consecutive months of declines, a survey of U.S. consumers recorded a strong rebound in sentiment about the economy. The University of Michigan said its December sentiment reading rose to 69.7 from 61.3 in the previous month as consumers reported greater optimism that inflation will ease.

Slight GDP downgrade

The U.S. government’s final estimate of third-quarter economic growth was scaled back slightly, but still indicated robust expansion. GDP for third quarter came in at an annual rate of 4.9%, versus the 5.2% figure reported in an estimate made a month earlier. The final growth rate was the fastest in nearly two years.

Buyback uptick

U.S. companies bought back shares at a slightly faster pace in 2023’s third quarter than they did in the second quarter. Share repurchases by companies in the S&P 500 totaled nearly $186 billion, up 6% from the prior quarter’s $175 billion, according to S&P Dow Jones Indices. Relative to the third quarter of 2022, buybacks were down 12%.

Q4 earnings outlook

Analysts are expecting that fourth-quarter earnings growth will decrease modestly from the third-quarter numbers reported in the earnings season that concluded in November. As of December 18, analysts expected S&P 500 companies to report average earnings growth of 2.4% for the fourth quarter, down from the third quarter’s 4.9% figure, according to FactSet. Overall, full-year earnings growth in 2023 is expected to rise 0.6% from 2022.

Source: https://www.jhinvestments.com/weekly-market-recap