Weekly Market Recap

Week ended March 15

Market-moving news

Market-moving news

Market-moving news
Momentum regained

After falling for five days in a row in the previous week, the major U.S. stock indexes recaptured their positive momentum from January and February. Information technology stocks led the rally as the NASDAQ climbed nearly 4%, the S&P 500 added about 3%, and the Dow rose around 1%.

Market-moving news
Divergent paths

Performance gaps between the major indexes were large, with the Dow trailing its peers by a wide margin. One reason was the nearly 10% weekly decline for Boeing, one of 30 stocks in the index. Its shares slid in the wake of a deadly crash of a Boeing 737 MAX in Ethiopia.

Market-moving news
Brexit confusion

The outlook for the United Kingdom’s scheduled March 29 exit from the European Union remained muddled after a flurry of “no” votes in Parliament. British lawmakers rejected the divorce deal that Prime Minister Theresa May negotiated with the EU, then opposed any “hard Brexit” separation in the absence of an agreement. It’s now up to the EU whether to grant an extension delaying the divorce.  

Market-moving news
Restrained inflation

The latest monthly reading on U.S. inflation shows that prices remain stable—a trend that aligns with the U.S. Federal Reserve’s current neutral stance on interest-rate policy. The Consumer Price Index rose 1.5% in February on an annualized basis, the slowest pace since September 2016. 

Market-moving news
Retail slump

A monthly gauge of U.S. retail sales remained weak, but not quite as weak as December’s report. The government said that retail sales rose just 0.2% in January on a seasonally adjusted basis. In December, retail sales fell 1.6%, the worst showing in more than a decade.

  

Market-moving news
Weak spots

Output at U.S. factories fell in February for the second month in a row to its lowest level since July 2018. The U.S. data, released Friday, followed similar reports of slowdowns in industrial activity in Japan, Germany, and China.  

Shrinking yields

For the second week in a row, U.S. government bond yields fell, with the yield of the 10-year U.S. Treasury slipping to its lowest level since the start of this year. On Friday, the yield fell as low as 2.59% in intraday trading, down from a recent high of 2.75% on March 1.

Fed ahead

The U.S. Federal Reserve is expected to keep interest rates unchanged on Wednesday when it concludes a two-day policy meeting, just as it did at its most recent meeting in late January. Many economists now believe the Fed is unlikely to approve any rate hikes this year, unless there’s a reversal of a recent weakening trend in economic data. 

The week ahead: March 18-22

Monday 

  • Housing Market Index, National Association of Home Builders

 

Tuesday

  • U.S. Federal Reserve Board opens two-day policy meeting
  • Housing starts, U.S. Census Bureau
  • Factory orders, U.S. Census Bureau

Wednesday

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

Thursday

  • The Conference Board Leading Economic Index for the U.S.

Friday

  • Existing home sales, National Association of Realtors
  • Wholesale inventories, U.S. Census Bureau
  • Federal budget, U.S. Department of the Treasury
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 3/15/19
1 week
2.62.93.2 Large
2.22.42.7 Mid
1.82.12.4 Small
Value Core Growth
YTD
12.313.514.8 Large
14.115.818.3 Mid
13.215.517.7 Small
Value Core Growth
Index/market total returns as of 3/15/19 (%)
Close Week YTD
Dow Jones Industrial Average 25,848.9 1.1 10.9
NASDAQ Composite Index 7,688.5 3.8 16.2
S&P 500 Index 2,822.5 3.0 13.1
MSCI EAFE Index 1,890.3 2.8 10.5
Cboe Volatility Index 12.9 -19.9 -49.2
International/developed (%)
1 week YTD
EAFE 2.8 10.5
Europe 3.7 12.3
France 4.0 12.8
Germany 2.9 9.8
Italy 3.4 13.9
Japan 1.6 5.7
Spain 3.7 9.4
Switzerland 2.8 12.6
U.K. 3.8 13.2
Emerging markets (%)
1 week YTD
EM 2.7 9.8
Brazil 5.2 14.6
China 3.1 16.8
India 4.3 5.7
Indonesia 2.3 2.9
Korea 1.6 5.4
Mexico 3.0 4.3
Russia 2.0 11.9
Taiwan 2.3 6.2
S&P 500 sectors (%)
1 week YTD
S&P 500 Index 3.0 13.1
Communication services 2.3 14.6
Consumer discretionary 2.7 12.3
Consumer staples 2.4 9.3
Energy 3.2 15.3
Financials 3.0 12.4
Healthcare 3.3 6.9
Industrials 0.3 15.7
Information tech 4.9 18.2
Materials 1.7 10.2
Real estate 2.4 15.1
Utilities 1.9 10.9

Fixed income, currencies, and commodities

U.S. fixed-income style total returns (%) as of 3/15/19
1 week
0.10.20.0 Large
0.10.20.7 Mid Quality
0.40.80.7 Small
Value Core Growth
INTEREST-RATE SENSITIVITY
YTD
0.60.91.0 Large
0.61.55.3 Mid Quality
3.86.78.9 Small
Value Core Growth
INTEREST-RATE SENSITIVITY
U.S. Treasury bond yields as of 3/15/19 (%)
END OF WEEK PRIOR YEAR END YTD CHANGE (BPS)
2 Yr 2.44 2.50 -6
10 Yr 2.59 2.68 -9
30 Yr 3.02 3.01 +1
2-10 spread 0.15 0.18 -3
10-30 spread 0.43 0.33 +10
U.S. bond sector total returns (%)
1 week YTD
Aggregate 0.2 1.7
Bank loans 0.2 4.7
Convertible 1.6 11.7
Corporate 0.5 4.2
High yield 0.8 6.7
MBS 0.2 1.4
Municipal 0.2 1.8
Preferreds 0.6 8.7
TIPS 0.5 2.2
Treasury 0.1 0.9
Global bond total returns (%)
1 week YTD
EM Local 0.9 3.3
EMD USD 1.0 5.9
Global Agg 0.4 1.4
Global Agg Ex-U.S. 0.6 1.2
Multiverse 0.5 1.6
Commodities (%)
1 week YTD
BBG Com Ind 1.4 6.9
Oil (WTI) 4.3 27.2
Gold 0.3 1.6
Currencies (USD) (%)
1 week YTD
EM FX 0.4 1.8
AUD 0.7 0.7
CAD 0.8 2.4
CHF 0.5 -1.7
EUR 0.8 -0.9
GBP 2.0 4.2
JPY -0.4 -1.7

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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