Weekly Market Recap

Week ended May 17

Market-moving news

Market-moving news

Market-moving news
Sound and fury

Stocks started out on slippery footing Monday as the latest escalation in the U.S.-China trade war weighed on the market, and they remained choppy throughout the week. But tensions eased, stocks bounced back, and the major indexes ended up with modest weekly declines of around 1%.

Market-moving news
China retaliates

China responded to a U.S. tariff increase by boosting tariffs on $60 billion worth of American goods, effective June 1. China’s retaliation on Monday sent the S&P 500 and the Dow down more than 2%, while the NASDAQ dropped more than 3%, posting its biggest daily decline of the year. Stocks also fell in Asia and Europe.

Market-moving news
Yield compression

Amid the recent rise in stock market volatility, investors have been bidding up prices of government bonds, sending their yields lower. The yield of the 10-year U.S. Treasury bond slipped to 2.37% on Wednesday—its lowest level of the year—while the yield of Germany’s 10-year bond sank to its lowest level in three years.

Market-moving news
Trade progress

While tensions with China escalated, the Trump administration reported progress in trade talks with other nations. On Friday, negotiators reached an agreement with Canada and Mexico to end U.S.-imposed tariffs on steel and aluminum, and the United States delayed a tariff decision involving imported auto parts.

Market-moving news
Broad impact

Monday’s stock market rout was accompanied by volatility in other asset classes. The U.S. dollar weakened to its lowest level against China’s yuan in more than three months, while other emerging-market currencies fell against the dollar and the price of gold climbed.

Market-moving news
Crude awakening

Growing military tensions in the Persian Gulf between the United States and Iran boosted U.S. crude oil prices. On Friday, the price briefly topped $63 per barrel, the highest in about four weeks.

Market-moving news
Retail therapy

A flurry of reports from retailers is closing out quarterly earnings season, and several major chains reported strong first-quarter results in the latest week. While more retailers will be reporting data through the end of May, about 80% of those that have announced results so far have beaten analysts’ earnings estimates.

Market-moving news
Buyback bonanza

U.S. companies are continuing to buy back shares of their stocks at a rapid clip. As of May 16, reported stock buybacks in the first quarter of this year were up nearly 8% from the same period a year earlier, according to S&P Dow Jones Indices.  

The week ahead: May 20-24

Monday 

  • No major reports scheduled

Tuesday

  • Existing home sales, National Association of Realtors

Wednesday

  • Release of minutes from April 30–May 1 meeting of the U.S. Federal Reserve Board 

Thursday

  • New home sales, U.S. Census Bureau

Friday

  • Durable goods orders, U.S. Census Bureau
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 5/17/19
1 week
-0.8-0.8-0.7 Large
-1.3-1.2-1.2 Mid
-2.3-2.3-2.3 Small
Value Core Growth
YTD
12.715.317.9 Large
14.717.421.2 Mid
12.514.416.4 Small
Value Core Growth
Index/market total returns as of 5/17/19 (%)
Close Week YTD
Dow Jones Industrial Average 25,764.0 -0.6 11.5
NASDAQ Composite Index 7,816.3 -1.2 18.3
S&P 500 Index 2,859.5 -0.7 15.0
MSCI EAFE Index 1,865.8 0.2 10.6
Cboe Volatility Index 16.0 0.0 -37.0
International/developed (%)
1 week YTD
EAFE 0.2 10.6
Europe 0.6 12.5
France 1.2 13.3
Germany 0.3 12.3
Italy -0.1 12.4
Japan 0.0 5.6
Spain 1.4 8.1
Switzerland 2.0 16.2
U.K. 0.1 11.4
Emerging markets (%)
1 week YTD
EM -3.5 3.8
Brazil -6.9 -2.8
China -3.9 9.8
India 0.0 2.2
Indonesia -8.3 -9.1
Korea -4.4 -4.9
Mexico 0.2 7.3
Russia 3.3 16.4
Taiwan -5.3 5.0
S&P 500 sectors (%)
1 week YTD
S&P 500 Index -0.7 15.0
Communication services 0.3 19.4
Consumer discretionary -1.1 18.2
Consumer staples 0.9 14.9
Energy -0.4 12.2
Financials -2.1 13.6
Healthcare -0.4 2.8
Industrials -1.8 16.9
Information tech -1.0 22.2
Materials -0.8 8.8
Real estate 1.5 19.0
Utilities 1.5 12.0

Fixed income, currencies, and commodities

U.S. fixed-income style total returns (%) as of 5/17/19
1 week
0.10.30.9 Large
0.10.30.6 Mid Quality
0.0-0.1-0.2 Small
Value Core Growth
INTEREST-RATE SENSITIVITY
YTD
1.22.15.0 Large
1.52.910.4 Mid Quality
4.58.212.3 Small
Value Core Growth
INTEREST-RATE SENSITIVITY
U.S. Treasury bond yields as of 5/17/19 (%)
END OF WEEK PRIOR YEAR END YTD CHANGE (BPS)
2 Yr 2.21 2.50 -29
10 Yr 2.39 2.68 -29
30 Yr 2.82 3.01 -19
2-10 spread 0.18 0.18 +0
10-30 spread 0.43 0.33 +10
U.S. bond sector total returns (%)
1 week YTD
Aggregate 0.3 3.6
Bank loans 0.1 6.0
Convertible -0.2 13.1
Corporate 0.4 6.9
High yield -0.1 8.2
MBS 0.2 2.7
Municipal 0.3 4.2
Preferreds 0.6 10.3
TIPS 0.3 3.7
Treasury 0.4 2.6
Global bond total returns (%)
1 week YTD
EM Local -0.2 0.9
EMD USD 0.1 7.2
Global Agg -0.1 2.3
Global Agg Ex-U.S. -0.4 1.5
Multiverse -0.1 2.5
Commodities (%)
1 week YTD
BBG Com Ind 1.4 4.9
Oil (WTI) 1.9 36.6
Gold -0.9 -0.6
Currencies (USD) (%)
1 week YTD
EM FX -0.2 0.8
AUD -1.7 -2.3
CAD -0.2 1.5
CHF 0.0 -2.5
EUR -0.8 -2.4
GBP -2.3 0.0
JPY -0.3 -0.2

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 4/30/19

as tracked by Strategic Insight
MONTH 12 Month ASSETS
U.S. equity -0.6 24.7 8,483.9
Sector equity -0.6 -37.3 881.9
Allocation -5.7 -72.7 1,252.6
International equity 1.0 11.2 3,183.6
Alternative -1.6 -22.3 186.8
Commodities -1.7 -5.2 89.3
Taxable bond 35.0 166.8 3,930.9
Municipal bond 7.4 35.8 762.7
Total all long-term funds 32.3 59.7 18,785.0

Leading Morningstar fund categories by monthly net flows ($B) as of 4/30/19

MONTH 12 Month ASSETS
Intermediate Core Bond 14.1 34.8 840.8
Intermediate Core-Plus Bond 7.6 2.9 653.6
Large Blend 7.3 90.3 3,735.6
Long Government 3.9 14.9 58.3
Multisector Bond 3.7 -0.9 235.4

Lagging Morningstar fund categories by monthly net flows ($B) as of 4/30/19

MONTH 12 Month ASSETS
Health -3.7 3.7 167.6
Foreign Large Value -3.6 -14.9 201.2
Bank Loan -3.0 -24.8 117.1
Foreign Large Growth -2.8 -15.4 462.4
Large Value -2.3 -17.6 1,165.1
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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