2024 | February 12

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Stocks Up Again

The S&P 500’s more than 1% gain for the week pushed the index above the 5,000-point threshold for the first time and marked its 14th positive result out of the past 15 weeks. The NASDAQ added more than 2%, while the Dow posted a fractional gain.

The 5,000-point mark that the S&P 500 eclipsed on Friday came two years and 10 months after the index closed above 4,000 points for the first time in April 2021. Prior to that, the S&P 500 cleared 3,000 in July 2019, 2,000 in August 2014, and 1,000 in February 1998.

In the space of three weeks, slightly negative expectations for the current quarterly earnings season turned solidly positive. As of Friday, fourth-quarter net income was expected to rise 2.9% compared with the year-ago quarter, based on the two-thirds of S&P 500 companies that have already reported plus projections for those that haven’t yet reported. As recently as January 19, earnings had been forecast to decline 1.8%.

Strong earnings results from selected technology companies fueled another week of equity market style leadership for growth stocks relative to value stocks. Year to date, the total return for a U.S. large-cap growth benchmark was 8.8% versus 1.1% for its value counterpart.

Bitcoin climbed about 5% on Friday to cap a strong week in which the price of the most widely traded cryptocurrency rose 10%. Friday afternoon’s price of about $47,600 was the highest since Bitcoin briefly climbed to nearly $49,000 about a month earlier.

The yield of the 10-year U.S. Treasury bond climbed on Thursday to 4.17% after a weekly report on unemployment claims underscored the recent strength of the U.S. labor market. New applications for jobless benefits fell to 218,000, marking the first decline in three weeks. At Friday’s close, the 10-year yield was 4.17%, up from 4.03% the previous week.

An index of U.S. small-cap stocks posted a 2.4% gain for the week, but that positive result came on the heels of a shaky start. The index dropped 1.3% on Monday, then rebounded to post daily gains the rest of the week.

A Consumer Price Index report scheduled to be released on Tuesday will show whether recently mixed readings on inflation extended into January. In December, inflation posted a month-to-month rise of 0.3% – slightly above most economists’ expectations and the third monthly increase in a row. However, December’s Producer Price Index – which tracks prices that factories charge wholesalers – slipped 0.1%.

Source: John Hancock Investment Management

10 Surprising Ways to Improve Brain Health

How Much Does a Thunderstorm Cost?

The insurance industry has been examining this question closely. From 2000 to 2022, the median economic loss from severe convective storms (SCS, aka severe thunderstorms) around the world was about $39 billion, according to a report from a 2024 global professional services firm. In 2023:

·        Severe thunderstorms inflicted $94 billion worth of economic damage across the globe,

·        28 of the storms were billion-dollar events, and

·        23 of the billion-dollar storms occurred in the United States.

Overall, thunderstorms were the most damaging peril for insurance companies last year. They took seven of the top-10 spots on the list of global insured loss events in 2023.

1. U.S. drought                                $6.5 billion insured loss/ $14.0 billion economic loss*
2. Turkey/Syria earthquakes           $5.7 billion insured loss/ $92.4 billion economic loss
3. U.S. severe thunderstorm           $5.0 billion insured loss/ $6.2 billion economic loss
4. U.S. severe thunderstorm           $4.4 billion insured loss/ $5.5 billion economic loss
5. U.S. severe thunderstorm           $4.3 billion insured loss/ $5.3 billion economic loss
6. Hawaii wildfires                           $3.5 billion insured loss/ $5.5 billion economic loss
7. U.S. severe thunderstorm           $3.1 billion insured loss/ $3.9 billion economic loss
8. U.S. severe thunderstorm           $3.0 billion insured loss/ $3.8 billion economic loss
9. Europe severe thunderstorm    $3.0 billion insured loss/ $5.8 billion economic loss
10. U.S. severe thunderstorm           $2.9 billion insured loss/ $3.6 billion economic loss

*Insured loss is the portion of an economic loss covered by public or private insurance entities.

The chief climate scientist of a German multi-national insurer said, “We used to refer to regional thunderstorms as secondary perils because they only cause small or medium-sized damage on their own…But as the number of thunderstorms increases, we have to think about a new classification, reported Stephan Kahl of Bloomberg.”

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