John Hancock: Weekly Market Recap Week Ended May 7th

Earnings surge

First-quarter earnings continued to improve, and S&P 500 companies are now expected to report a cumulative 49% increase over last year’s first-quarter results, according to FactSet. That’s up from the roughly 25% gain that analysts had forecast at the start of earnings season. As of Friday, results were in from around 90% of S&P 500 companies.

Yield volatilty

Friday’s jobs report reinforced recent U.S. Federal Reserve comments suggesting that policymakers are in no rush to raise interest rates, and that sentiment helped to support bond prices, sending yields lower. The yield of the 10-year U.S. Treasury bond briefly fell below 1.50%—the lowest in nearly two months—before recovering in the afternoon to 1.56%.  

Divergent market

Large-cap U.S. value stocks added to their run of year-to-date outperformance versus their large-cap growth counterparts, beating them by a wide margin for the week. A value stock benchmark climbed more than 2% while a growth benchmark fell nearly 1%.

Jobs setback

Friday’s jobs report fell far short of expectations as the recent rollback of pandemic-related restrictions failed to provide much lift to the labor market. The economy generated 266,000 new jobs in April, far below economists’ expectations for a gain of nearly 1 million. The unemployment rate rose from 6.0% to 6.1%.

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