Weekly Market Recap

Week ended February 15

Market-moving news

Market-moving news

Market-moving news
Back on track

The major stock indexes gained 2% to 3%, picking up momentum after finishing mostly flat the previous week. For the Dow, it was the eighth positive week in a row—a run that’s been driven by diminishing concerns over U.S. monetary policy and the U.S.-China trade conflict.

Market-moving news
Bullish comeback

While market gains have been modest in recent weeks, they’ve been impressive taken as a whole. Since stocks sank to a recent low on December 24, the S&P 500 and Dow have both risen around 18%. The NASDAQ has added nearly 21%, exiting a bear market that it entered in late December.

Market-moving news
Trade progress

The major stock indexes climbed around 1% on Friday as the United States and China appeared to make progress toward a resolution of their trade conflict. Negotiators met in Beijing, where they discussed a potential framework for a deal. Further talks are scheduled this week in Washington to discuss remaining sticking points.

Market-moving news
Shutdown averted

Congress managed to steer clear of another partial government shutdown when it approved a negotiated deal to keep the government funded through this fall. President Trump signed the bill on Friday—hours before funding was set to expire for parts of the government—while also declaring a national emergency over border security issues. 

Market-moving news
German slowdown

The GDP of Europe’s largest economy was unchanged in last year’s fourth quarter, slightly behind economists’ expectations for a 0.1% growth rate. Had Germany’s economy contracted, the result would have signaled a recession, as GDP shrank by 0.2% in last year’s third quarter.

Market-moving news
Retail slump

Stocks fell on Thursday after the government reported that U.S. retail sales fell in December at the fastest monthly pace since September 2009. December sales fell 1.2% on a seasonally adjusted basis relative to November; economists had expected a 0.1% increase, on average.

Earnings test

Although retail sales have recently slipped, most retailers are expected to report quarterly profit and sales growth as earnings season begins to wind down. Analysts cite positive catalysts for major retailers, including a strong labor market, rising wages, and lower gasoline prices. Retailers are traditionally among the last to report quarterly results.  

Fed minutes

Wednesday’s release of minutes from the U.S. Federal Reserve Board’s late January meeting will be closely watched, as the meeting notes are expected to reveal how broad the consensus was among board members to shift to a more dovish stance on monetary policy. The Fed’s adoption of a more neutral approach to interest rates this year helped spark the recent rally for stocks.

The week ahead: February 18-22

Monday 

  • Presidents’ Day holiday, U.S. financial markets closed

 

 

Tuesday

  • Housing Market Index, National Association of Home Builders

Wednesday

  • Release of minutes from January 29–30 meeting of the U.S. Federal Reserve Board
  • Housing starts, U.S. Census Bureau

Thursday

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

Friday

  • No major reports scheduled 
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 2/15/19
1 week
2.82.62.4 Large
2.52.73.1 Mid
3.54.24.9 Small
Value Core Growth
YTD
10.811.612.3 Large
13.615.117.1 Mid
15.316.517.7 Small
Value Core Growth
Index/market total returns as of 2/15/19 (%)
Close Week YTD
Dow Jones Industrial Average 25,883.3 3.2 11.4
NASDAQ Composite Index 7,472.4 2.4 12.7
S&P 500 Index 2,775.6 2.6 11.0
MSCI EAFE Index 1,840.1 2.0 7.2
Cboe Volatility Index 14.9 -5.1 -41.3
International/developed (%)
1 week YTD
EAFE 2.0 7.2
Europe 2.5 7.8
France 3.1 7.0
Germany 2.9 5.6
Italy 3.5 8.8
Japan 1.7 4.9
Spain 2.5 5.4
Switzerland 2.1 7.8
U.K. 1.9 8.9
Emerging markets (%)
1 week YTD
EM -0.5 6.8
Brazil 2.6 15.6
China -0.5 10.4
India -2.5 -3.5
Indonesia -4.6 2.6
Korea 0.6 7.9
Mexico -2.0 5.5
Russia -1.7 10.1
Taiwan 0.9 2.6
S&P 500 sectors (%)
1 week YTD
S&P 500 Index 2.6 11.0
Communication services 1.0 10.8
Consumer discretionary 2.6 10.8
Consumer staples 1.1 7.3
Energy 5.1 15.4
Financials 2.9 11.0
Healthcare 3.2 7.5
Industrials 3.6 17.5
Information tech 2.4 12.3
Materials 3.4 7.9
Real estate 1.2 12.9
Utilities 0.0 5.3

Fixed income, currencies, and commodities

U.S. fixed-income style total returns (%) as of 2/15/19
1 week
0.0-0.1-0.3 Large
0.0-0.1-0.1 Mid Quality
0.40.60.8 Small
Value Core Growth
INTEREST RATE SENSITIVITY
YTD
0.40.30.9 Large
0.30.84.6 Mid Quality
3.15.57.4 Small
Value Core Growth
INTEREST RATE SENSITIVITY
U.S. Treasury bond yields as of 2/15/19 (%)
END OF WEEK PRIOR YEAR END YTD CHANGE (BPS)
2 Yr 2.52 2.50 +2
10 Yr 2.67 2.68 -1
30 Yr 3.00 3.01 -1
2-10 spread 0.15 0.18 -3
10-30 spread 0.33 0.33 -0
U.S. bond sector total returns (%)
1 week YTD
Aggregate -0.1 1.1
Bank loans 0.4 3.7
Convertible 1.1 10.1
Corporate 0.0 2.9
High yield 0.6 5.5
MBS -0.1 0.7
Municipal 0.0 1.0
Preferreds 1.0 7.0
TIPS 0.1 1.2
Treasury -0.2 0.4
Global bond total returns (%)
1 week YTD
EM Local -1.1 3.0
EMD USD 0.1 4.5
Global Agg -0.3 0.7
Global Agg Ex-U.S. -0.5 0.5
Multiverse -0.3 0.9
Commodities (%)
1 week YTD
BBG Com Ind 1.2 5.9
Oil (WTI) 5.5 22.0
Gold 0.3 3.0
Currencies (USD) (%)
1 week YTD
EM FX -0.8 1.7
AUD 0.4 1.1
CAD 0.0 2.8
CHF -0.6 -2.1
EUR -0.6 -1.5
GBP -0.7 0.9
JPY -0.7 -0.8

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 1/31/19

as tracked by Strategic Insight
MONTH 12 Month ASSETS
U.S. equity -10.5 -23.2 7,776.5
Sector equity -8.7 -46.9 837.6
Allocation -3.5 -72.7 1,200.8
International equity 13.7 51.9 3,006.8
Alternative -0.5 -16.2 184.4
Commodities 2.0 3.1 92.6
Taxable bond 31.4 109.7 3,753.4
Municipal bond 7.6 6.8 719.0
Total all long-term funds 30.9 -25.0 17,588.7

Leading Morningstar fund categories by monthly net flows ($B) as of 1/31/19

MONTH 12 Month ASSETS
Diversified Emerging Mkts 11.2 21.1 542.0
Intermediate-Term Bond 7.4 1.1 1,401.3
High Yield Bond 6.4 -29.9 270.3
Intermediate Government 4.2 10.1 138.8
Corporate Bond 4.1 -2.2 168.7

Lagging Morningstar fund categories by monthly net flows ($B) as of 1/31/19

MONTH 12 Month ASSETS
Large Blend -6.1 39.9 3,359.4
Bank Loan -4.6 -9.0 123.2
Equity Energy -3.1 -6.9 37.0
Large Growth -2.8 -37.7 1,624.6
Large Value -2.8 -19.3 1,088.4
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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