John Hancock: Weekly Market Recap Week Ended January 10

Spiking yields

In the wake of Friday’s stronger-than-expected jobs report, the yield of the 10-year U.S. Treasury note surged to the highest level in more than 14 months, climbing as high as 4.79% on Friday morning before closing around 4.77%. The recent spike reflects growing market expectations that the U.S. Federal Reserve may only approve a single rate cut this year.

Earnings outlook

As major banks prepare to open quarterly earnings season, analysts on Friday expected that fourth-quarter earnings per share for all companies in the S&P 500 rose by an average of 11.7%, according to FactSet. The firm reported that 71 companies recently scaled back their earnings expectations versus 35 that issued positive guidance.

Dividend increases

Dividend payments by companies in the S&P 500 rose in 2024. The net indicated dividend rate—dividend increases announced by companies minus decreases—rose to $53.3 billion from $36.5 billion in 2023, according to S&P Dow Jones Indices. The firm’s annual forecast projects an 8% increase in overall dividend payments this year relative to 2024.

CPI ahead

A Consumer Price Index report scheduled for release on Wednesday will show whether a recent trend of slightly hotter-than-expected inflation extended into December.  Last month’s CPI report showed an annual rate of 2.7% in November, up from 2.6% the previous month—a further indication of recently uneven progress in bringing inflation closer to the Fed’s 2.0% long-term target.

SOURCE: https://www.jhinvestments.com/weekly-market-recap#market-moving-news