2023 | October 30

The Markets

Stocks Down

U.S. stock indexes failed to get much lift from earnings season and a strong quarterly GDP report, as the S&P 500, the NASDAQ, and the Dow each fell more than 2% for the week. It was the sixth negative week out of the past eight for the S&P 500.

The NASDAQ’s 2% decline on Wednesday left the index more than 10% below a recent high reached on July 19, putting it into a correction. It was joined in correction territory on Friday by the S&P 500, which fell more 10% below its July 31 peak. Both indexes fell to their lowest levels since May.

The U.S. economy remains resilient despite fears of a recession, as GDP expanded at a 4.9% annual rate in the third quarter, above consensus expectations for around 4.7%. Consumer spending stayed strong, and the latest result marked an acceleration from the second quarter’s 2.1% pace. 

Approaching the midpoint of earnings season, companies in the S&P 500 were on track to record an overall decline in their profit margins for the seventh quarter in a row. The average net profit margin was 11.6%, versus 11.9% in the same quarter a year earlier, according to FactSet data released on Tuesday. Margins peaked at 13.0% in the second quarter of 2021.

A U.S. small-cap stock benchmark, the Russell 2000 Index, retreated on Friday to its lowest level in nearly three years, dating to November 2020. Since July 31, the index has fallen more than 18%; year-to-date, it’s down nearly 6%.

In the wake of recent bond market volatility, government bonds were relatively stable, with yields of 2-year, 10-year, and 30-year bonds all declining slightly for the week. Yields for each maturity remained roughly around 5.00%, indicating a flattening of the yield curve, which has been inverted since July 2022, when the 2-year yield began to exceed that of the 10-year Treasury.

The price of Bitcoin, the most widely traded cryptocurrency, surged for the second week in a row, gaining around 25% over that stretch. On Friday, Bitcoin was trading around $33,800 after having reached a year-to-date high above $35,000 on Wednesday.

In addition to more quarterly earnings reports, the new week will bring a U.S. Federal Reserve policy meeting that concludes on Wednesday and a monthly jobs report on Friday. The Fed is widely expected to keep interest rates unchanged; the jobs report will show how October’s jobs growth compared with September’s bigger-than-expected surge of 336,000 jobs.

Source: John Hancock Investment Management

The Economic Benefits of Education

Things People Don't Like and Things They Do

Many people have strong opinions, especially when it comes to what they like and don’t like. Research has found that preferences are affected by our experiences, genetics, environment, family, friends and other factors, reported Ana Clemente in The Conversation. Some people, for example, have neophobia, an aversion to anything new or unfamiliar. Here are a few things that people have said they dislike, gathered from surveys and social media.

• Driving at night or in bad weather.
• Redoing a home repair because it was done poorly the first time.
• Making multiple trips to the hardware store for the same project.
• Working from 9 to 5 (commenters preferred a flexible schedule).
• Waiting in line.
• Rising prices, aka inflation.
• Oversharing on social media.
• Taking surveys.
•  Worrying about income after retirement.

Sometimes, an unexpected event can spark delight and change your outlook. A snack company in the United Kingdom asked people the kinds of spontaneous surprises that improve their mood during the day or week. Here are some of the moments survey respondents enjoyed.

• Finding forgotten cash in the pocket of a jacket.
• Receiving a compliment from a stranger.
• Having someone let them go first at a store checkout.
• Hearing a favorite song on the radio.
• Being recognized with a bonus at work.
• Hitting all green lights as they drive along the road.
• Getting a whiff of a favorite scent from childhood.
• Having a loved one say they’re proud of you.
• Doing something nice for someone else.

Many respondents said spur-of-the-moment events brought joy, or restored their faith in humanity, about twice a week on average, reported The Good News Network.

What brings delight to your life?

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