John Hancock: Weekly Market Recap Week Ended June 25th

Market shift

The latest week’s stock market gains marked a reversal from the prior week, as the major U.S. indexes recovered the previous week’s losses and then some. In addition, a measure of investors’ expectations of short-term stock market volatility reversed course, dropping 25% for the week after surging slightly more than that in the preceding week.

Positive earnings outlook

Ahead of the mid-July start of quarterly earnings season, nearly twice as many companies that have issued guidance prior to their earnings releases raised their expectations compared with the number that lowered their forecasts. Sixty-six companies in the S&P 500 had issued positive guidance as of Friday, while 37 had issued negative guidance, according to FactSet.

Fed’s inflation outlook

A week after U.S. Federal Reserve members lifted their inflation forecast at their latest policy meeting, Fed Chairman Jerome Powell largely downplayed inflation concerns in testimony before Congress. Powell said he continues to believe that the recent spike in consumer prices will eventually ease, although he did acknowledge economic uncertainty will persist as pandemic restrictions are lifted. 

Jobs ahead

A monthly employment report scheduled to be released on Friday will show whether recent moderation in jobs growth carried over into June. The last monthly report, released in early June, showed that the economy generated 559,000 new jobs in May compared with 278,000 in April and 785,000 in March.