Weekly Market Recap

Week ended September 13

Market-moving news

Market-moving news

Market-moving news
Three in a row

The big U.S. stock indexes climbed around 1%, extending their string of weekly gains to three, and the S&P 500 moved within a percentage point of its record set in late July. Small stocks were the market’s sweet spot, as a small-cap benchmark, the Russell 2000, surged nearly 5% for the week.

Market-moving news
Euro stimulus

In its final meeting under outgoing President Mario Draghi, the European Central Bank delivered bigger-than-expected stimulus measures in response to Europe’s recent economic slowdown. The ECB cut its key interest rate further into negative territory to minus 0.5% and relaunched a bond-buying stimulus program.

Market-moving news
Goodwill gestures

Concessions by China and the United States fueled hopes that the trade rivals could reach an interim agreement when high-level negotiations resume in early October. China waived tariffs on some U.S. agricultural goods, including soybeans and pork, while the United States delayed the implementation of new tariffs by two weeks.  

Market-moving news
Yields un-invert

Prices of U.S. Treasury bonds tumbled, sending yields back up from recent lows. The yield of the 10-year U.S. Treasury bond jumped to around 1.90% on Friday, up from a recent low of 1.47% on September 4. That big move means the yield curve is no longer inverted, as the 2-year Treasury’s yield is once again lower than that of the 10-year yield. 

Market-moving news
Anxiety eases

The U.S. stock market’s near recovery from August’s decline has been accompanied by a steep drop in a gauge of investors’ expectations for short-term market volatility. The Cboe Volatility Index has dropped more than 40% from a recent high on August 5. 

Market-moving news
Consumer comeback

A pair of economic reports released on Friday indicated that U.S. consumer confidence has recovered somewhat from a recent slump. Monthly retail sales exceeded most economists’ expectations and the University of Michigan’s monthly consumer confidence index recorded a sharp gain.

Market-moving news
Inflation gauge

The latest monthly reading on U.S. inflation confirms recent data showing acceleration in price gains. Core inflation, which strips out volatile food and energy prices, climbed for the third month in a row to an annual rate of 2.4%, matching the highest level in 13 months. 

Market-moving news
Fed ahead

The U.S. Federal Reserve is expected to cut interest rates for the second time in two months when it concludes a two-day meeting on Wednesday. Most observers expect the Fed will approve a cut of a quarter of a percentage point in hopes of maintaining solid U.S. economic growth in the face of a potential global slowdown. 

The week ahead: September 16-20

Monday

  • No major reports scheduled 

Tuesday

  • U.S. Federal Reserve Board opens two-day policy meeting
  • Industrial production and capacity utilization, U.S. Federal Reserve
  • Housing Market Index, National Association of Home Builders

Wednesday

  • U.S. Federal Reserve Board concludes two-day policy meeting, Chairman Jerome Powell holds press conference
  • Housing starts, U.S. Census Bureau 

 

Thursday

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

 

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 9/13/19
1 week
2.51.0-0.4 Large
2.81.1-1.4 Mid
6.44.93.5 Small
Value Core Growth
YTD
18.921.724.6 Large
20.323.026.7 Mid
15.918.220.3 Small
Value Core Growth
Index/market total returns as of 9/13/19 (%)
Close Week YTD
Dow Jones Industrial Average 27,219.5 1.6 18.8
NASDAQ Composite Index 8,176.7 0.9 24.2
S&P 500 Index 3,007.4 1.0 21.7
MSCI EAFE Index 1,919.6 2.0 14.8
Cboe Volatility Index 13.7 -8.7 -46.1
International/developed (%)
1 week YTD
EAFE 2.0 14.8
Europe 1.5 15.8
France 1.2 18.3
Germany 2.3 13.3
Italy 1.3 20.9
Japan 3.5 12.2
Spain 2.3 6.8
Switzerland -1.1 24.4
U.K. 2.3 10.8
Emerging markets (%)
1 week YTD
EM 1.9 8.8
Brazil 0.7 12.6
China 2.4 14.1
India 2.1 -0.2
Indonesia 1.2 6.6
Korea 2.5 -1.2
Mexico 1.5 6.4
Russia 1.7 32.6
Taiwan 1.2 15.6
S&P 500 sectors (%)
1 week YTD
S&P 500 Index 1.0 21.7
Communication services 1.5 25.4
Consumer discretionary 0.4 25.3
Consumer staples -0.8 21.8
Energy 3.5 8.6
Financials 3.9 21.1
Healthcare 0.3 6.8
Industrials 2.9 24.7
Information tech -0.3 32.1
Materials 3.4 18.5
Real estate -3.1 26.3
Utilities 0.1 21.0

Fixed income, currencies, and commodities

U.S. fixed-income style total returns (%) as of 9/13/19
1 week
-0.2-1.2-6.0 Large
-0.4-0.9-3.8 Mid Quality
0.20.10.0 Small
Value Core Growth
INTEREST-RATE SENSITIVITY
YTD
2.54.314.5 Large
2.85.419.3 Mid Quality
6.411.618.9 Small
Value Core Growth
INTEREST-RATE SENSITIVITY
U.S. Treasury bond yields as of 9/13/19 (%)
END OF WEEK PRIOR YEAR END YTD CHANGE (BPS)
2 Yr 1.79 2.21 -41
10 Yr 1.90 2.39 -50
30 Yr 2.37 2.82 -45
2-10 spread 0.10 0.18 -8
10-30 spread 0.48 0.43 +4
U.S. bond sector total returns (%)
1 week YTD
Aggregate -1.7 7.1
Bank loans 0.6 7.1
Convertible 0.5 16.1
Corporate -2.0 12.2
High yield 0.1 11.6
MBS -0.5 5.1
Municipal -1.1 6.3
Preferreds -1.6 14.1
TIPS -1.8 6.8
Treasury -2.1 6.1
Global bond total returns (%)
1 week YTD
EM Local 1.7 7.3
EMD USD 0.8 12.7
Global Agg -0.1 5.8
Global Agg Ex-U.S. -0.1 5.1
Multiverse -0.1 6.0
Commodities (%)
1 week YTD
BBG Com Ind 1.1 4.3
Oil (WTI) -2.9 19.6
Gold -1.0 16.2
Currencies (USD) (%)
1 week YTD
EM FX 0.6 2.2
AUD 0.4 -2.2
CAD -0.5 3.1
CHF -0.1 -0.2
EUR 0.3 -3.0
GBP 1.2 -2.2
JPY -1.2 1.5

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 8/31/19

as tracked by Strategic Insight
MONTH 12 Month ASSETS
U.S. equity -19.3 -13.2 8,337.4
Sector equity -9.6 -65.5 882.5
Allocation -3.0 -67.2 1,253.7
International equity -7.9 -4.5 3,040.4
Alternative -2.5 -22.6 179.3
Commodities 2.9 9.0 105.8
Taxable bond 18.0 198.5 4,191.8
Municipal bond 9.0 61.4 827.1
Total all long-term funds -13.4 61.3 18,830.6

Leading Morningstar fund categories by monthly net flows ($B) as of 8/31/19

MONTH 12 Month ASSETS
Intermediate Core-Plus Bond 7.2 25.6 704.7
Foreign Large Blend 6.0 48.8 1,111.1
Ultrashort Bond 5.1 66.5 257.3
Commodities Precious Metals 4.4 11.2 71.5
Intermediate Government 4.4 29.0 170.7

Lagging Morningstar fund categories by monthly net flows ($B) as of 8/31/19

MONTH 12 Month ASSETS
Large Growth -9.0 -56.9 1,741.8
Diversified Emerging Mkts -6.6 14.7 530.3
Large Value -4.5 -18.2 1,125.8
Bank Loan -4.5 -46.6 102.6
High Yield Bond -4.3 -6.3 291.1
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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