John Hancock: Weekly Market Recap Week Ended January 6th

Diminished earnings

As major banks prepare to open quarterly earnings season this week, most analysts have been scaling back their expectations. Over the past three months, analysts reduced their fourth-quarter earnings-per-share estimates for companies in the S&P 500 by an average of 6.5%, according to FactSet. That figure exceeds the 3.8% average reduction seen prior to earnings seasons over the past 20 years.

Dividend record

Companies in the S&P 500 distributed a record $565 billion in dividend payments in 2022, up nearly 11% from the previous year, according to S&P Dow Jones Indices. For the fourth quarter, payments were up 10% relative to the same quarter a year earlier.

Fed warning

At their December meeting, U.S. Federal Reserve officials emphasized their commitment to keep interest rates high to limit inflation, according to Wednesday’s release of meeting minutes. Officials cautioned that restoring price stability could be complicated by “an unwarranted easing in financial conditions, especially if driven by a misperception by the public” as to the Fed’s response to economic news.

Price check ahead

A Consumer Price Index report scheduled to be released on Thursday will show whether the recent moderation in inflation extended into December. In November, inflation rose at an annual 7.1% rate, marking the smallest year-over-year increase since December 2021.

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