John Hancock: Weekly Market Recap Week Ended May 12th

Sticky inflation

While U.S. inflation slowed for the tenth consecutive month, the latest Consumer Price Index reading didn’t register a big easing of prices, as inflation slowed to a 4.9% annual rate in April versus 5.0% in March. Excluding energy and food, prices climbed 5.5% versus 5.6% the previous month.

Earnings scorecard

With 92% of S&P 500 companies having reported first-quarter results as of Friday, the proportion of S&P 500 companies that have beaten analysts’ earnings expectations remained slightly higher than usual. So far, 78% of companies have exceeded net income expectations, topping the 10-year average of 73%, according to FactSet.

Sideways stocks

Since the start of April, the major U.S. indexes have continued to trade in a narrow range as quarterly earnings season has progressed. The S&P 500’s highest closing level during that period was 4,169 points on April 28—less than 3% above its low point of 4,056 two days earlier. On Friday, it closed at 4,124.

Bond stability

As with the modest moves seen in the U.S. stock market recently, volatility in the government bond market has also eased relative to the big moves seen in early March. Since then, the 10-year U.S. Treasury bond yield has moved in a narrow range of as high as 3.60% to as low as 3.29%, with Friday’s yield at around 3.46%. In early March, it peaked at 4.07%.

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