John Hancock: Weekly Market Recap Week Ended February 18th

Earnings streak

With 86% of S&P 500 companies having reported fourth-quarter results as of Friday, earnings season was on track to record year-over-year profit growth exceeding 30.0% for the fourth quarter in a row. Earnings at companies in the S&P 500 were expected to increase 30.9%, based on companies that have reported so far and forecasts for the relatively small number of firms that haven’t yet released earnings, according to FactSet.

Retail comeback

U.S. retail sales rebounded from a decline in December, as a surge in online purchases and increased sales of furniture helped to fuel better-than-expected growth in January. High inflation also helped to boost the latest monthly retail sales total, which was up 3.8%, compared with December’s 2.5% decline.

Yield volatility

It was another bumpy week in the government bond market, as the yield of the 10-year U.S. Treasury climbed as high as 2.06% on Wednesday—the highest since July 2019—before slipping down to around 1.93% on Friday. As recently as mid-December 2021, the yield was as low as 1.40%.

Soft spots

Two economic releases indicated potential weakness in the U.S. economy. The latest weekly tally of new claims for unemployment benefits rose to 248,000, marking the first increase in four weeks. Meanwhile, a monthly report on a basket of leading economic indicators showed a deceleration in the overall growth rate after having stabilized for several months.

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