Weekly Market Recap

Week ended November 16

Market-moving news

Market-moving news

Market-moving news
Reversing course

Stocks couldn’t maintain their positive momentum of the previous two weeks as the major indexes fell around 2%. As a result, the S&P 500 Index remained close to its level at the start of November but was nearly 7% below its record high reached in September.  

Market-moving news
Tech trouble

The S&P 500 finished the week with gains on Thursday and Friday, but that wasn’t enough to offset the market’s shaky start to the week. The biggest decline came on Monday, when weakness in the technology sector weighed on the broader market. The S&P dropped 2.0% and the NASDAQ sank 2.8%.  

Market-moving news
Brexit row

The British pound fell sharply as several members of U.K. Prime Minister’s Theresa May’s cabinet resigned over the deal she reached with the European Union on her country’s pending exit from the EU. While May did manage to secure overall approval from the cabinet, the resignations ensured that the deal will face plenty of resistance when Parliament votes on it.

Market-moving news
Growth slowdown

The economies of Germany and Japan both contracted in the third quarter, raising concerns that slowdowns in other major developed markets could soon weigh on U.S. growth. Germany’s GDP declined at an annualized rate of 0.8% in the third quarter, while Japan’s GDP fell 1.2%.

Market-moving news
Oil pressure

Crude oil prices extended their recent decline to a level that’s about 25% below prices in early October, when oil climbed to a four-year high. Oil fell as low as $56 per barrel on Tuesday as concerns about global oversupplies weighed on prices. 

Market-moving news
Bitcoin blowout

The price of bitcoin fell well below $6,000 to its lowest point of the year. The cryptocurrency is down more than 70% from its record high of more than $19,000, reached last December. In recent months, bitcoin traded around $6,500.

Inflation checkup

The government’s Consumer Price Index rose at the fastest monthly rate of the year, but much of the inflation gauge’s 0.3% October increase was attributed to a rise in gasoline prices. On a year-over-year basis, prices climbed 2.5% last month, up from a 2.3% annual rate in September. 

 

Shopping season

U.S. retail sales exceeded expectations in October, which could bode well for retailers heading into the holiday shopping season. Sales increased 0.8% last month compared with September’s level, topping most economists’ expectations.  

The week ahead: November 19-23

Monday 

  • Builders index Housing Market Index, National Association of Home Builders    

 

 

 

Tuesday

  • Housing starts, U.S. Census Bureau    

 

Wednesday

  • The Conference Board Leading Economic Index for the U.S.
  • Durable goods orders, U.S. Census Bureau
  • University of Michigan Index of Consumer Sentiment
  • Existing home sales, National Association of Realtors

 

Thursday

  • Thanksgiving holiday, U.S. financial markets closed; no major reports scheduled

Friday

  • No major reports scheduled; Black Friday shopping; early 1 P.M., ET, close for U.S. stock exchanges    
Important disclosures

Unless otherwise noted, all data is from FactSet.

The data provided is for informational purposes only and is not an endorsement of any security, mutual fund, sector, or index. This does not illustrate the performance of any John Hancock fund. The information contained here is not guaranteed as to accuracy or completeness. All economic and performance information is historical and does not guarantee future results.

The Dow Jones Industrial Average is a price-weighted index comprising 30 widely traded blue chip U.S. common stocks. The NASDAQ Composite Index is a market-value-weighted index of all common stocks listed on the NASDAQ stock exchange. The S&P 500 Index tracks the performance of 500 of the largest publicly traded companies in the United States. The MSCI Europe, Australasia, and Far East (EAFE) Index tracks the performance of publicly traded large- and mid-cap stocks of companies in those regions. The Cboe Volatility Index (VIX) shows the market’s expectation of 30-day volatility and is constructed using the implied volatilities of a wide range of S&P 500 Index options. Weekly and year-to-date figures for the VIX show percentage changes, not investment returns. It is not possible to invest directly in an index.

The Treasury yield curve is derived from available U.S. Treasury securities trading in the market and is provided directly by the U.S. Federal Reserve. The spread measures the difference in yield between two government securities. A normal (positive) yield curve occurs when longer-term rates are higher than shorter-term rates. The opposite holds true for an inverted yield curve. Year-to-date changes in U.S. Treasury bond yields are shown in basis points (BPS).  One hundred basis points equals one percent.

Oil prices are represented by West Texas Intermediate (WTI) crude oil.

The G20 countries comprise a mix of the world’s largest advanced and emerging economies, representing about two-thirds of the world’s population, 85% of global gross domestic product, and over 75% of global trade.

 

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Investment returns

Equities

U.S. equity size and style total returns (%) as of 11/16/18
1 week
-0.8-1.5-2.3 Large
-0.9-1.1-1.3 Mid
-1.0-1.4-1.7 Small
Value Core Growth
YTD
0.73.76.5 Large
-2.50.03.1 Mid
-0.90.51.9 Small
Value Core Growth
Index/market total returns as of 11/16/18 (%)
Close Week YTD
Dow Jones Industrial Average 25,413.2 -2.1 4.9
NASDAQ Composite Index 7,247.9 -2.1 6.0
S&P 500 Index 2,736.3 -1.5 4.1
MSCI EAFE Index 1,812.8 -1.4 -8.8
Cboe Volatility Index 18.1 4.0 64.3
International/developed (%)
1 week YTD
EAFE -1.4 -8.8
Europe -1.6 -9.6
France -1.3 -6.7
Germany -1.1 -15.4
Italy -1.3 -14.8
Japan -1.6 -7.7
Spain -0.4 -12.0
Switzerland -1.8 -4.3
U.K. -2.5 -9.9
Emerging markets (%)
1 week YTD
EM 1.0 -12.7
Brazil 3.4 3.9
China 2.8 -15.2
India 1.4 -11.1
Indonesia 4.0 -11.3
Korea -0.3 -19.2
Mexico -3.3 -16.3
Russia 0.6 5.4
Taiwan -1.0 -7.2
S&P 500 sectors (%)
1 week YTD
S&P 500 Index -1.5 4.1
Communication services -1.1 -6.9
Consumer discretionary -3.7 7.9
Consumer staples -1.7 0.3
Energy -1.9 -4.6
Financials -1.3 -2.8
Healthcare -1.0 12.8
Industrials -0.6 -3.7
Information tech -2.4 9.3
Materials 0.4 -7.5
Real estate 1.0 4.2
Utilities 0.0 7.0

Fixed income, currencies, and commodities

U.S. fixed-income style total returns (%) as of 11/16/18
1 week
0.10.51.2 Large
0.30.5-1.1 Mid Quality
-0.5-1.3-2.4 Small
Value Core Growth
INTEREST RATE SENSITIVITY
YTD
1.3-0.3-7.2 Large
0.7-0.8-8.5 Mid Quality
3.3-0.2-5.0 Small
Value Core Growth
INTEREST RATE SENSITIVITY
U.S. Treasury bond yields as of 11/16/18 (%)
END OF WEEK PRIOR YEAR END YTD CHANGE (BPS)
2 Yr 2.80 1.88 +92
10 Yr 3.07 2.41 +66
30 Yr 3.33 2.74 +58
2-10 spread 0.27 0.53 -26
10-30 spread 0.25 0.33 -8
U.S. bond sector total returns (%)
1 week YTD
Aggregate 0.5 -2.0
Bank loans -0.5 2.9
Convertible -0.6 2.5
Corporate 0.0 -3.5
High yield -1.3 -0.2
MBS 0.8 -1.1
Municipal 0.4 -0.7
Preferreds -0.8 -3.4
TIPS 0.7 -1.8
Treasury 0.7 -1.5
Global bond total returns (%)
1 week YTD
EM Local 1.2 -9.2
EMD USD -0.5 -5.3
Global Agg 0.4 -3.1
Global Agg Ex-U.S. 0.4 -3.7
Multiverse 0.3 -3.1
Commodities (%)
1 week YTD
BBG Com Ind 1.3 -3.2
Oil (WTI) -6.1 -0.9
Gold 1.2 -7.0
Currencies (USD) (%)
1 week YTD
EM FX 0.3 -5.9
AUD 0.9 -6.5
CAD 0.4 -4.7
CHF 0.2 -2.8
EUR 0.4 -5.1
GBP -1.5 -5.1
JPY 0.8 -0.2

U.S. economy

GDP

Jobs

Inflation

Ex-U.S.

Regions/countries

Fund industry overview

Total net flows: open-end funds and ETFs ($B) as of 10/31/18

as tracked by Strategic Insight
MONTH 12 Month ASSETS
U.S. equity 6.1 -10.3 7,757.6
Sector equity -12.9 -5.4 851.7
Allocation -9.2 -51.1 1,217.9
International equity 4.6 127.6 2,911.9
Alternative 0.4 -3.5 197.7
Commodities 0.6 2.7 88.7
Taxable bond -23.3 225.7 3,699.1
Municipal bond -5.2 12.5 700.2
Total all long-term funds -40.6 266.3 17,442.7

Leading Morningstar fund categories by monthly net flows ($B) as of 10/31/18

MONTH 12 Month ASSETS
Large Blend 13.7 47.2 3,319.4
Ultrashort Bond 12.4 75.2 204.3
World Bond 10.0 33.9 267.1
Foreign Large Blend 7.5 104.4 1,075.1
Trading--Leveraged Equity 3.6 3.9 26.4

Lagging Morningstar fund categories by monthly net flows ($B) as of 10/31/18

MONTH 12 Month ASSETS
Intermediate-Term Bond -29.8 58.4 1,365.2
High Yield Bond -7.5 -35.6 272.8
World Allocation -3.7 -15.9 284.1
Real Estate -3.4 -9.5 144.7
Technology -3.4 8.5 141.0
Important disclosures

Unless otherwise noted, all data is from FactSet.

The data provided is for informational purposes only and is not an endorsement of any security, mutual fund, sector, or index. This does not illustrate the performance of any John Hancock fund. The information contained here is not guaranteed as to accuracy or completeness. All economic and performance information is historical and does not guarantee future results.

The Dow Jones Industrial Average is a price-weighted index comprising 30 widely traded blue chip U.S. common stocks. The NASDAQ Composite Index is a market-value-weighted index of all common stocks listed on the NASDAQ stock exchange. The S&P 500 Index tracks the performance of 500 of the largest publicly traded companies in the United States. The MSCI Europe, Australasia, and Far East (EAFE) Index tracks the performance of publicly traded large- and mid-cap stocks of companies in those regions. The Cboe Volatility Index (VIX) shows the market’s expectation of 30-day volatility and is constructed using the implied volatilities of a wide range of S&P 500 Index options. Weekly and year-to-date figures for the VIX show percentage changes, not investment returns. It is not possible to invest directly in an index.

The Treasury yield curve is derived from available U.S. Treasury securities trading in the market and is provided directly by the U.S. Federal Reserve. The spread measures the difference in yield between two government securities. A normal (positive) yield curve occurs when longer-term rates are higher than shorter-term rates. The opposite holds true for an inverted yield curve. Year-to-date changes in U.S. Treasury bond yields are shown in basis points (BPS).  One hundred basis points equals one percent.

Oil prices are represented by West Texas Intermediate (WTI) crude oil.

The G20 countries comprise a mix of the world’s largest advanced and emerging economies, representing about two-thirds of the world’s population, 85% of global gross domestic product, and over 75% of global trade.

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