John Hancock: Weekly Market Recap Week Ended October 11

Rising yields 

The yield of the 10-year U.S. Treasury note climbed for the fourth week in a row as a monthly report on inflation prompted investors to dial back expectations for the pace of further interest-rate cuts. The yield of the 10-year note closed at 4.08% on Friday—up from 3.98% at the end of the previous week and well above a recent low of 3.62% on September 16.

Earnings lift-off

Earnings season got into full swing on Friday as two major U.S. banks released third-quarter results; shares of both institutions climbed following their reports. As of Friday, analysts were forecasting that earnings for all companies in the S&P 500 would rise by an average of 4.1% overall, according to FactSet.

Inflation’s grip

A monthly Consumer Price Index reading came in slightly higher than expected, adding to uncertainty over the pace of further interest-rate cuts over the short term. Consumer prices rose at a 2.4% annual rate in September—down from August’s 2.5% reading but just above the 2.3% consensus forecast of economists. Moreover, September’s core inflation figure excluding energy and food prices was 3.3%, above the previous month’s 3.2% rate.

Sentiment slips

An indicator that tracks U.S. consumer sentiment unexpectedly fell for the first time in three months. Friday’s preliminary reading from the University of Michigan’s Consumer Sentiment Index was 68.9, down from a reading of 70.1 the previous month. Most economists had expected a small increase.

Source:  https://www.jhinvestments.com