Weekly Market Recap

Week ended June 15

Market-moving news

Market-moving news

Market-moving news
Mixed markets

After posting strong performance the previous week, the major U.S. stock indexes made modest moves in different directions. The Dow fell nearly 1% for the week, the NASDAQ rose more than 1%, and the S&P 500 was little changed overall.

Market-moving news
Trade tensions

The stocks of trade-dependent industrial firms and agricultural companies were among the hardest hit in the broad market as the long-running trade dispute between the U.S. and China escalated on Friday. The Trump administration imposed 25% tariffs on $50 billion worth of Chinese goods; Chinese leaders vowed to retaliate with an equal magnitude of tariffs on U.S. goods.

Market-moving news
Picking up the pace

As expected, the U.S. Federal Reserve approved its third interest-rate increase in six months. Fed policymakers also signaled that they could accelerate the pace of rate hikes this year, resulting in the potential for four rate increases in 2018, up from an earlier projection of three.

 

Market-moving news
Europe’s go-slow approach

While the U.S. tightened its monetary policy, the European Central Bank indicated that it’s likely to keep interest rates unchanged and at low levels at least through the summer of next year. The bank also announced plans to wind down its bond-buying economic stimulus program by the end of this year.

 

Market-moving news
Dollar versus euro

Currency markets had a big reaction to the week’s monetary policy news as the U.S. dollar extended its recent gains over the euro. The euro’s decline on Thursday was the biggest single-day drop for the currency since the United Kingdom’s 2016 Brexit vote to leave the European Union.

Market-moving news
Japan goes easy

Japan’s central bank on Friday took a different tack than the U.S. Federal Reserve, as it maintained its long-standing embrace of accommodative monetary policies and ultralow interest rates. The move followed a recent slowdown in Japan’s inflation rate, which remains far below the central bank’s 2% target.

Small-cap record

The Russell 2000 Index, a small-cap stock benchmark, climbed to a record high on Tuesday. The index was up nearly 10% year to date through Friday, significantly ahead of U.S. large- and mid-cap indexes.

 

 

 

Bitcoin’s decline

The price of bitcoin fell about 14% for the week, sinking as low as $6,141 on Wednesday. Year to date, the cryptocurrency is down more than 50%, and it’s 66% below its record high of more than $19,000, reached in mid-December 2017

The week ahead: June 18-22

Monday

  • Housing Market Index, National Association of Home Builders

 

 

 

Tuesday

  • Housing Starts, U.S. Census Bureau   

 

 

Wednesday

  • Existing home sales, National Association of Realtors

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 6/15/18
1 week
-0.60.10.7 Large
-0.30.20.9 Mid
-0.60.71.9 Small
Value Core Growth
YTD
-0.15.210.3 Large
0.84.69.5 Mid
6.710.313.6 Small
Value Core Growth
Index/market total returns as of 6/15/18 (%)
Close Week YTD
Dow Jones Industrial Average 25,090.5 -0.8 2.6
NASDAQ Composite Index 7,746.4 1.3 12.8
S&P 500 Index 2,779.7 0.1 4.9
MSCI EAFE Index 2,000.1 -0.5 -0.4
International/developed (%)
1 week YTD
EAFE -0.5 -0.4
Europe -0.2 -1.0
France 0.1 3.4
Germany 0.6 -2.0
Italy 2.5 -0.2
Japan -0.5 1.5
Spain -0.1 -4.7
Switzerland 0.6 -5.9
U.K. -1.5 -0.7
Emerging markets (%)
1 week YTD
EM -1.8 -3.0
Brazil -3.1 -18.2
China -1.0 5.8
India 0.3 -5.5
Indonesia 0.0 -12.5
Korea -4.2 -5.8
Mexico 1.6 -9.2
Russia -2.6 -2.6
Taiwan -1.3 2.5
S&P 500 sectors (%)
1 week YTD
S&P 500 Index 0.1 4.9
Consumer discretionary 2.3 14.4
Consumer staples 2.1 -8.5
Energy -3.1 4.1
Financials -1.9 -0.8
Healthcare 0.9 4.4
Industrials -1.3 0.0
Information tech 0.5 14.8
Materials -1.3 -0.3
REITs -1.0 -2.9
Telecom -2.0 -9.0
Utilities 2.6 -4.3

Fixed income, currencies, and commodities

U.S. fixed-income style total returns (%) as of 6/15/18
1 week
0.00.00.6 Large
0.00.10.5 Mid Quality
0.20.40.5 Small
Value Core Growth
INTEREST RATE SENSITIVITY
YTD
0.5-1.0-4.1 Large
-0.1-1.3-5.8 Mid Quality
2.70.7-1.7 Small
Value Core Growth
INTEREST RATE SENSITIVITY
U.S. Treasury bond yields as of 6/15/18 (%)
END OF WEEK PRIOR WEEK
2 Yr 2.55 2.52
10 Yr 2.92 2.96
30 Yr 3.05 3.10
2-10 spread 0.37 0.44
10-30 spread 0.13 0.14
U.S. bond sector total returns (%)
1 week YTD
Aggregate 0.1 -1.9
Bank loans 0.0 1.7
Convertible 1.0 8.9
Corporate 0.2 -3.5
High yield 0.4 0.7
MBS 0.2 -1.4
Municipal 0.0 -0.5
Preferreds 0.2 0.6
TIPS 0.1 -0.7
Treasury 0.1 -1.6
Global bond total returns (%)
1 week YTD
EM Local -2.3 -8.4
EMD USD -0.6 -5.1
Global Agg -0.3 -1.7
Global Agg Ex-U.S. -0.5 -1.6
Multiverse -0.3 -1.8
Commodities (%)
1 week YTD
BBG Com Ind -2.5 0.3
Oil -1.5 9.4
Gold -1.8 -2.8
Currencies (USD) (%)
1 week YTD
EM FX -0.5 -2.8
AUD -1.9 -4.6
CAD -1.7 -5.0
CHF -1.0 -2.1
EUR -1.3 -3.3
GBP -0.9 -1.8
JPY -1.0 2.0

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 5/31/18

as tracked by Strategic Insight
MONTH 12 Month ASSETS
U.S. equity 17.2 -38.4 7,884.7
Sector equity 0.8 8.4 882.6
Allocation 0.5 28.7 2,764.0
International equity 3.5 221.9 3,241.3
Alternative -0.7 7.9 211.5
Commodities 0.1 9.3 101.7
Taxable bond 15.5 337.1 3,668.8
Municipal bond 1.4 27.4 703.5
Total all long-term funds 37.8 581.4 19,475.9

Leading Morningstar fund categories by monthly net flows ($B) as of 5/31/18

MONTH 12 Month ASSETS
Foreign Large Blend 9.1 132.6 1,219.0
Large Blend 9.0 66.6 3,186.0
Ultrashort Bond 6.0 49.9 163.7
Small Blend 5.1 7.5 389.0
Large Growth 4.7 -45.3 1,700.9

Lagging Morningstar fund categories by monthly net flows ($B) as of 5/31/18

MONTH 12 Month ASSETS
Large Value -3.6 -44.6 1,179.5
Mid-Cap Value -2.5 -12.3 248.0
Diversified Emerging Mkts -2.5 48.0 564.4
High Yield Bond -2.3 -28.6 281.6
Europe Stock -2.2 -1.2 71.6
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