John Hancock: Weekly Market Recap Week Ended January 26

Upside GDP surprise

The U.S. economy again exceeded most economists’ expectations in the fourth quarter as GDP expanded at a 3.3% annual rate. While that marked a slowdown from the third quarter’s 4.9% pace, it closed out a strong 2023 that saw GDP expand at a full-year figure of 3.1%, easing anxiety about prospects for a  recession.

Inflation moderation

The U.S. Federal Reserve’s preferred gauge for tracking inflation posted a modest 0.2% month-to-month increase in December. While the figure was up from a 0.1% decline in November, it closed out a year that saw the Personal Consumption Expenditures Price Index rise at an annual rate of 2.9% in 2023 excluding volatile food and energy prices—far below 2022’s level.

Growth’s YTD lead

After leading the value equity style by a wide margin in 2023, growth stocks have maintained their edge in the opening weeks of this year. At Friday’s close, a U.S. large-cap growth benchmark was up about 4.0% year to date while a value benchmark was up just 0.4%.

Busy week ahead

In addition to more quarterly earnings reports, the new week will bring a U.S. Federal Reserve policy meeting that concludes on Wednesday and a monthly jobs report on Friday. The Fed is widely expected to keep interest rates unchanged; the jobs report will show how January’s jobs growth compared with December’s bigger-than-expected gain of 216,000 jobs.

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