2022 | January 30

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Stocks Rise

The NASDAQ surged more than 4% for its fourth positive weekly result in a row while the S&P 500 and the Dow posted smaller gains, rebounding from declines the previous week. With a couple trading days left in January, the NASDAQ was on track to record its strongest monthly result since last July.

For the third week in a row, a U.S. large-cap growth stock benchmark outperformed its value counterpart by a wide margin, reversing the trend from 2022, when the value equity style dominated. Over the past three weeks, the growth benchmark gained 7.9% while its value counterpart added 2.1%.  

U.S. economic growth remained in solidly positive territory in the fourth quarter of 2022, marking its second positive result after slightly negative numbers in the first two quarters of last year. GDP grew at an annualized rate of 2.9% in the latest period, beating most economists’ expectations. For full-year 2022, GDP rose 2.1%, easing concerns about the prospects of a protracted recession.

The U.S. Federal Reserve’s preferred gauge for tracking inflation showed a further cooling of price increases. The government reported on Friday that its Personal Consumption Expenditures Price Index rose at an annual 5.0% rate in December, down from 5.5% in November. Excluding food and energy, prices rose at a 4.4% annual rate—the lowest in 14 months.

Nearly one-third of the way through earnings season, the proportion of S&P 500 companies that have beaten analysts’ earnings expectations is slightly smaller than usual. About 69% had exceeded net income expectations as of Friday, trailing the five-year average of 77%, according to FactSet. Overall, earnings are expected to decline 5% relative to a year ago.

With the peak of quarterly earnings season at hand, profit margins continue to shrink amid high inflation. Margins for S&P 500 companies are forecast to average around 11.4% for the fourth quarter of 2022, according to FactSet. If that figure is maintained by the time all quarterly reports are released, it would mark the sixth quarter in a row of declining profit margins.

At its next meeting ending on Wednesday, the U.S. Federal Reserve is expected to lift its benchmark interest rate again, but it's widely expected to hike by just a quarter of a percentage point rather than a half point. In 2022, the Fed approved seven rate increases, including a half-point hike in December, down from its previous three-quarter-point increases. 

A labor market update due out on Friday is likely to be the most closely watched economic report of the week. The release covering January follows a report that showed the economy generated 223,000 new jobs in December—the fifth consecutive month with jobs gains in the 200,000 to 300,000 range and the 24th month in a row with at least 200,000.  

Source: John Hancock Investment Management

Which Financial Documents Should I Keep vs. Discard?

Oh, To Be 18 Forever

You’re likely to live a lot longer than your great grandparents did. In 1900, average life expectancy at birth in the U.S. was about 47 years. It rose to 68 by 1950 and, in 2021, average life expectancy was about 76 years, reported Harvard Health.

Science is working to extend life expectancy further by looking for ways to reduce biological aging. Dr. Morgan Levine develops tools to measure biological aging, reported Zoë Corbyn of The Guardian.

“Most people’s biological age will be within plus or minus five years of their chronological age, but you can have outliers of up to 10 or more years. The wonderful thing, compared with chronological age, is that biological age is modifiable. We don’t yet know exactly how to modify it to the greatest extent, but the clock can be made to tick slower, or even possibly go backwards, in response to our behaviors (though it can also speed up),” reported Levine.

Bryan Johnson, a 45-year-old software entrepreneur, has his sights set on achieving a biological age of 18, reported Ashlee Vance of Bloomberg Businessweek. To that end, Johnson has enlisted a team of 30 doctors who are “committed to help reverse the aging process in every one of Johnson’s organs…” The endeavor is expected to cost Johnson about $2 million this year.

Regaining lost youth is a full-time job, according to the doctor who leads the team. In addition to following a specific diet, exercise, and sleep plan, Johnson, “endures dozens of medical procedures, some quite extreme and painful, then measures their results with additional blood tests, MRIs, ultrasounds and colonoscopies.” His medical team reports that, so far, he has reduced his biological age by at least five years.

We all have goals for the future. No matter what you want to accomplish, it’s important to have a financial plan that will support your progress. If you would like to talk about your plans for the future, get in touch. 

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