2023 | March 6

The Markets

Stocks Gain

The three major U.S. stock indexes posted weekly gains of around 2% to nearly 3%, rebounding from declines of roughly 3% the previous week. For the S&P 500, the latest result snapped a string of three weekly losses in a row. 

Concerns about inflation and further interest-rate hikes continued to weigh on prices of government bonds, sending yields higher. The 10-year U.S. Treasury bond’s yield closed above 4.00% on Thursday for the first time in four months, although it slipped below that threshold on Friday. The 2-year note’s yield climbed as high as 4.94% on Thursday—the highest since 2007. 

The S&P 500 fell 2.6% last month, failing to maintain the market’s positive momentum from January, when the index rallied to a 6.2% gain. Information technology was the only one among 11 equity sectors to post a positive result in February, and the S&P 500 finished the month down 17.2% from its historic peak reached on January 3, 2022.

A gauge that tracks economic activity across the U.S. services sector showed the highest monthly reading since last June, which helped lift the major U.S. stock indexes to gains of 1% to 2% on Friday. Similar services sector expansion was reported on Friday in the eurozone and China.

Companies in the S&P 500 posted an average earnings decline of 4.9% over the same quarter a year earlier, according to FactSet data from the recently concluded fourth-quarter earnings season. That result marked the first quarterly decline since the third quarter of 2020. For the fourth quarter in a row, energy was the strongest among all 11 sectors, with earnings growth of 57.0% in the latest quarter.

The price of U.S. crude oil climbed more than 4% to nearly $80 per barrel, recovering ground lost over the previous two weeks of price declines. Among the catalysts was a report showing positive economic momentum in China, which could lift demand for oil.  

Although the National Association of Realtors reported that pending home sales jumped by 8.1% from December to January, a fresh surge in mortgage rates could weigh on the housing market. The average U.S. mortgage rate hit a three-month high, rising to 6.65% for a 30-year mortgage from 6.50% the previous week, according to an update on Thursday from mortgage buyer Freddie Mac. 

A labor market update scheduled for release on Friday is likely to be the most closely watched economic report of the week. The release covering February follows a report that showed that the U.S. economy generated 517,000 new jobs in January – far more than expected and the most since last July. The unemployment rate slipped to 3.4%, the lowest since 1969.

Source: John Hancock Investment Management

March Madness

The Power of Sunshine

If you’re worried about the possibility of dementia, make sure you’re topped up with vitamin D. That’s the finding of an ongoing study from the University of Calgary’s Brain Institute in Canada, the University of Exeter in the United Kingdom, and the U.S. National Alzheimer’s Coordinating Center.

More than 12,000 people participated in the study. The average age of participants was 71, and none had dementia when the study began. Slightly more than one-third of participants received vitamin D supplements. Researchers noted:

“…taking vitamin D was associated with living dementia-free for longer, and they also found 40 percent fewer dementia diagnoses in the group who took supplements…While Vitamin D was effective in all groups, the team found that effects were significantly greater in females, compared to males. Similarly, effects were greater in people with normal cognition, compared to those who reported signs of mild cognitive impairment – changes to cognition which have been linked to a higher risk of dementia.”

Vitamin D is known as the sunshine vitamin. When you walk outside on a sunny day, ultraviolet rays from the sun interact with chemicals in your skin to produce the vitamin. The amount you produce depends on a variety of factors, including where you live, the time of day you’re outside, and your pigmentation, reported the Mayo Clinic.

About one billion people around the world are deficient in vitamin D. That number includes about 35% of the U.S. population. In the U.S., people who are older than age 65 and people who have darker skin are more likely to experience vitamin D deficits, according to the Cleveland Clinic.

Having too little Vitamin D can be a significant health issue because it may play a role in preventing cancer, multiple sclerosis, psoriasis, bone softness, muscle weakness, and osteoporosis. As people become more aware of the importance of vitamin D, the market for supplements is expected to grow.

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