John Hancock: Weekly Market Recap Week Ending February 4th

January’s bumpy ride

The S&P 500 fell 5.3% in the first month of 2022, while the NASDAQ had an even tougher time, dropping around 9.0%. Across the S&P 500, energy was the top-performing sector, with a 19.0% gain; consumer discretionary was the weakest, as it tumbled 9.7%.

Earnings momentum

Earnings performance continued to improve, as fourth-quarter profits at companies in the S&P 500 were expected to increase more than 29%, based on companies that have reported so far and forecasts for firms that haven’t yet released earnings, according to FactSet. That’s up from the 24% rise that had been projected at the end of the previous week. About 56% of companies had reported results as of Friday.

Yield surge

Friday’s strong jobs report weighed on prices of government bonds, sending the yield of the 10-year U.S. Treasury to 1.92%—the highest level since December 2019, prior to the start of the pandemic. Yields also climbed in other countries amid growing expectations of monetary policy tightening.

Price check

A government report scheduled to be released on Thursday will show whether January marked the fourth month in a row in which the annual inflation rate topped 6.0%. The Consumer Price Index released last month showed that prices surged 7.0% for the 12-month period that ended in December—the highest level since 1982. Excluding the often-volatile categories of food and energy, the rate was 5.5%.

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