John Hancock: Weekly Market Recap Week Ended October 25
Top-heavy earnings
Near the midpoint of earnings season, a handful of U.S. mega-cap technology stocks are expected to continue generating a disproportionate share of overall earnings growth. Analysts expected that the group of stocks known as the Magnificent Seven will generate average third-quarter growth of 18.1%, according to FactSet. In contrast, the other 493 companies in the S&P 500 were projected to produce growth of 0.1%.
Yield surge
The yield of the 10-year U.S. Treasury note climbed for the fifth week out of the past six as investors remained cautious about inflationary pressures and the pace of further interest-rate cuts. The yield of the 10-year note closed at 4.24% on Friday—up from 4.07% at the end of the previous week and well above a recent low of 3.62% on September 16.
Real estate slump
The housing market continues to be a soft spot for the U.S. economy. The National Association of Realtors reported that sales of previously owned homes fell 1.0% in September relative to the previous month; compared with September 2023, sales were down more than 3.5%.
Busy week ahead
In addition to more quarterly earnings reports, the new week will bring the U.S. government’s initial estimate of third-quarter GDP on Wednesday and a monthly jobs report on Friday. The jobs report will show how October’s employment growth compared with September’s bigger-than-expected gain of 254,000 jobs—the strongest result in six months.
Source: https://www.jhinvestments.com