Weekly Market Recap

Week ended May 11

Market-moving news

Market-moving news

Market-moving news
Finding traction

After alternating between small gains and losses over the preceding six weeks, U.S. stocks finally managed to sustain positive momentum as quarterly earnings season began to wind down. The major indexes returned around 2.5% for the week, and the Dow joined the S&P 500 and the NASDAQ in positive territory year to date. 

Market-moving news
Volatility dissipates

Although stocks have made some big daily moves in recent weeks, investors’ expectations of near-term volatility have decreased markedly, as measured by the Cboe Volatility Index. As of Friday's close, the VIX had fallen more than 40% from its level of April 9, a recent high point.

Market-moving news
Oil recovery

U.S. crude oil prices rose for the second week in a row, climbing above $71 a barrel to the highest level since November 2014. One catalyst was President Trump’s announcement on Tuesday that the U.S. will pull out of a 2015 agreement limiting Iran’s nuclear activities; Iran is a major oil producer.

Market-moving news
Energy surge

The recent rise in crude oil prices has lifted shares of energy stocks, which have lagged the broader market in recent years. Some of the week’s biggest gainers were stocks of major oil producers, and energy trails only information technology among the strongest-peforming sectors year to date.

Market-moving news
Modest inflation

A government report showed that the recent acceleration in inflation may be moderating. Core prices—which exclude typically volatile food and energy costs—rose just 0.1% in April from the prior month, less than most economists had expected. 

Market-moving news
Positive streak

The report on U.S. inflation was a key catalyst for stocks on Thursday as the major indexes recorded their biggest daily gains of the week. The Dow rose 197 points, the index’s sixth daily gain in a row.  

U.K. growth slump

The United Kingdom’s central bank kept interest rates unchanged but cut its forecast of economic growth for the year. The Bank of England now expects GDP to grow by 1.4% this year, down from its previous projection of 1.8%. 

 

 

Buybacks surge

U.S. companies have been buying back their shares at a record pace this year, in part due to the new tax law that reduced corporate tax rates. Among the S&P 500 companies that had reported first-quarter results through Thursday, share repurchase activity totaled $158 billion, according to S&P Dow Jones Indices. That was on pace to make the quarter the biggest ever for buybacks.

The week ahead: May 14-18

Monday

  • No major reports scheduled  

 

 

 

 

Tuesday

  • Retail sales, U.S. Census Bureau
  • Business inventories, U.S. Census Bureau
  • Housing Market Index, National Association of Home Builders

 

 

Wednesday

  • Housing starts, U.S. Census Bureau
  • Industrial production and capacity utilization, U.S. Federal Reserve 

Thursday

  • 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. 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.

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 5/11/18
1 week
2.32.52.6 Large
1.62.12.7 Mid
2.32.73.0 Small
Value Core Growth
YTD
-0.62.86.1 Large
-0.52.05.2 Mid
2.75.17.2 Small
Value Core Growth
Index/market total returns as of 5/11/18 (%)
Close Week YTD
Dow Jones Industrial Average 24,831.2 2.5 1.3
NASDAQ Composite Index 7,402.9 2.7 7.6
S&P 500 Index 2,727.7 2.5 2.7
MSCI EAFE Index 2,059.9 1.6 2.1
International/developed (%)
1 week YTD
EAFE 1.6 2.1
Europe 1.8 2.2
France 1.1 5.6
Germany 1.5 0.4
Italy -0.9 10.7
Japan 1.1 2.7
Spain 1.8 2.9
Switzerland 1.6 -3.2
U.K. 2.7 2.3
Emerging markets (%)
1 week YTD
EM 2.5 1.1
Brazil 1.4 4.4
China 4.2 4.7
India 0.4 -4.9
Indonesia 3.9 -11.3
Korea 1.2 0.1
Mexico -1.3 -3.1
Russia 5.0 5.6
Taiwan 3.4 2.3
S&P 500 sectors (%)
1 week YTD
S&P 500 Index 2.5 2.7
Consumer discretionary 0.9 6.8
Consumer staples -0.4 -12.8
Energy 4.0 7.1
Financials 3.6 1.6
Healthcare 2.5 1.0
Industrials 3.5 -1.0
Information tech 3.5 11.3
Materials 2.0 -2.2
REITs 0.7 -3.6
Telecom 0.9 -9.4
Utilities -2.2 -3.5

Fixed income, currencies, and commodities

U.S. fixed-income style total returns (%) as of 5/11/18
1 week
0.0-0.10.0 Large
0.0-0.10.7 Mid Quality
0.10.30.3 Small
Value Core Growth
INTEREST RATE SENSITIVITY
YTD
0.3-1.4-5.3 Large
-0.3-1.6-5.5 Mid Quality
1.80.0-1.5 Small
Value Core Growth
INTEREST RATE SENSITIVITY
U.S. Treasury bond yields as of 5/11/18 (%)
END OF WEEK PRIOR WEEK
2 Yr 2.53 2.50
10 Yr 2.97 2.95
30 Yr 3.11 3.12
2-10 spread 0.43 0.45
10-30 spread 0.14 0.17
U.S. bond sector total returns (%)
1 week YTD
Aggregate 0.0 -2.3
Bank loans 0.0 1.5
Convertible 1.7 5.5
Corporate 0.1 -3.8
High yield 0.3 0.0
MBS -0.1 -1.7
Municipal 0.2 -0.8
Preferreds -0.4 -1.6
TIPS -0.1 -1.1
Treasury -0.1 -2.1
Global bond total returns (%)
1 week YTD
EM Local -0.2 -1.6
EMD USD 0.3 -4.0
Global Agg 0.0 -0.7
Global Agg Ex-U.S. 0.0 0.2
Multiverse 0.0 -0.8
Commodities (%)
1 week YTD
BBG Com Ind 0.1 2.7
Oil 1.6 19.2
Gold 0.5 0.7
Currencies (USD) (%)
1 week YTD
EM FX -0.5 -1.1
AUD 0.3 -3.5
CAD 0.6 -2.0
CHF 0.1 -2.5
EUR 0.1 -0.5
GBP 0.3 0.2
JPY -0.2 3.0

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 4/30/18

as tracked by Strategic Insight
MONTH 12 Month ASSETS
U.S. equity 5.9 -60.1 7,654.1
Sector equity -9.1 3.5 857.7
Allocation -3.4 -34.6 1,261.6
International equity 10.9 253.8 3,288.6
Alternative -1.2 8.9 211.4
Commodities 3.1 8.7 101.2
Taxable bond 27.3 359.9 3,649.4
Municipal bond -1.6 29.2 695.4
Total all long-term funds 31.0 547.4 17,737.1

Leading Morningstar fund categories by monthly net flows ($B) as of 4/30/18

MONTH 12 Month ASSETS
Large Blend 8.2 65.9 3,111.2
Ultrashort Bond 6.1 48.1 157.5
Foreign Large Blend 5.6 138.1 1,235.5
Intermediate-Term Bond 5.2 153.2 1,384.3
Diversified Emerging Mkts 4.3 58.9 584.0

Lagging Morningstar fund categories by monthly net flows ($B) as of 4/30/18

MONTH 12 Month ASSETS
Large Value -2.3 -46.0 1,174.1
Health -1.6 -11.0 154.0
Consumer Defensive -1.4 -2.7 15.9
Muni National Short -1.4 0.7 125.5
Europe Stock -1.4 6.0 75.9
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. 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.

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.

Hide disclosure