Weekly Market Recap

Week ended September 22

Market-moving news

Market-moving news

Market-moving news
Slowing down

After surging to record heights the previous week, the major stock indexes were mostly quiet. The NASDAQ Composite slipped for the week while the Dow and the S&P 500 posted slight gains, with the S&P 500 remaining just above the 2,500-point mark that it breached for the first time on September 15. 

Market-moving news
Fed taper begins

The U.S. Federal Reserve Board on Wednesday said next month will mark the beginning of its long-awaited program to gradually shrink the size of its massive portfolio of Treasury bonds and mortgage-backed securities. The portfolio is a legacy of the Fed’s efforts to stimulate economic growth following the financial crisis of 2008. 

Market-moving news
Rate hike outlook

The Fed on Wednesday kept interest rates unchanged, as had been widely expected as a result of recent subdued readings on inflation. However, the Fed’s projections indicate a likelihood of one more rate increase this year and perhaps three more increases next year.

Market-moving news
Gold’s shine dulls

The Fed’s new outlook for higher rates weighed on gold prices, which slipped below $1,300 an ounce on Thursday for the first time in nearly a month.  

Market-moving news
Yields climb

In the wake of the Fed’s meeting, government bond prices fell on Thursday for the ninth daily trading session in a row, sending their yields higher. However, the weekly rise in the yield of the 10-year U.S. Treasury bond was modest, as it climbed from 2.20% to around 2.26%.   

Market-moving news
Oil at $50

Crude oil prices posted another weekly gain and eclipsed the $50 per barrel level for the first time since late July. Nevertheless, prices remain down year to date, as crude was priced around $56 per barrel at the start of 2017.

China downgraded

S&P Global Ratings became the last of the three major credit rating firms to downgrade its view of the Chinese government’s creditworthiness. The ratings agency said that its downgrade reflected its assessment that recent strong growth in credit in China has increased the country’s financial risks. 

Buybacks slow

Major U.S. companies spent nearly 10% less on stock repurchases in this year’s second quarter than they did in the first quarter, according to S&P Dow Jones Indices. One reason for the decline: Stock prices continued to rise in the spring, making it more expensive for companies to buy back shares.

The week ahead: September 25-29

Monday

  • No major reports scheduled 

Tuesday

  • S&P/Case-Shiller 20-City Composite Home Price Index
  • Consumer Confidence Index, The Conference Board
  • New home sales, U.S. Census Bureau

Wednesday

  • Durable goods orders, U.S. Census Bureau
  • Pending home sales, National Association of Realtors

Thursday

  • Second-quarter GDP, third estimate, U.S. Bureau of Economic Analysis 

Friday

  • Personal income and consumer spending, U.S. Bureau of Economic Analysis
  • University of Michigan Index of Consumer Sentiment
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 9/22/17
1 week
0.50.2-0.2 Large
0.00.30.7 Mid
1.61.31.1 Small
Value Core Growth
YTD
7.113.319.9 Large
6.110.516.3 Mid
2.67.913.8 Small
Value Core Growth
Index/market total returns as of 9/22/17 (%)
Close Week YTD
Dow Jones Industrial Average 22,349.6 0.4 15.2
NASDAQ Composite Index 6,426.9 -0.3 20.4
S&P 500 Index 2,502.2 0.1 13.4
MSCI EAFE Index 1,977.6 0.7 20.5
International/developed (%)
1 week YTD
EAFE 0.7 20.5
Europe 0.8 23.3
France 1.3 28.0
Germany 0.6 24.3
Italy 1.7 33.5
Japan 1.0 14.0
Spain 0.3 30.0
Switzerland 0.3 21.0
U.K. 0.8 15.7
Emerging markets (%)
1 week YTD
EM 0.0 30.5
Brazil -0.5 30.2
China 1.2 46.3
India -2.5 27.5
Indonesia 0.2 16.6
Korea 1.1 33.8
Mexico 0.5 29.3
Russia 0.2 -0.3
Taiwan -1.8 25.5
S&P 500 sectors (%)
1 week YTD
S&P 500 Index 0.1 13.4
Consumer discretionary -0.1 11.3
Consumer staples -2.3 6.5
Energy 2.0 -8.3
Financials 2.6 10.8
Healthcare -1.2 20.1
Industrials 2.0 13.9
Information tech -0.7 26.1
Materials 1.0 15.4
REITs -2.8 6.9
Telecom 3.8 -5.1
Utilities -2.7 12.3

Fixed income, currencies, and commodities

U.S. fixed-income style total returns (%) as of 9/22/17
1 week
0.0-0.2-0.4 Large
-0.1-0.20.2 Mid Quality
0.10.20.4 Small
Value Core Growth
INTEREST RATE SENSITIVITY
YTD
0.61.77.1 Large
0.82.48.9 Mid Quality
5.16.712.9 Small
Value Core Growth
INTEREST RATE SENSITIVITY
U.S. Treasury bond yields as of 9/22/17 (%)
END OF WEEK PRIOR WEEK
2 Yr 1.44 1.39
10 Yr 2.26 2.23
30 Yr 2.79 2.80
2-10 spread 0.82 0.84
10-30 spread 0.53 0.58
U.S. bond sector total returns (%)
1 week YTD
Aggregate -0.1 3.2
Bank loans 0.1 1.6
Convertible 0.0 14.0
Corporate -0.2 5.3
High yield 0.2 6.7
MBS -0.1 2.3
Municipal -0.2 5.0
Preferreds 0.1 11.2
TIPS -0.4 2.1
Treasury -0.2 2.5
Global bond total returns (%)
1 week YTD
EM Local 0.0 16.2
EMD USD -0.4 9.1
Global Agg -0.3 7.0
Global Agg Ex-U.S. -0.3 9.3
Multiverse -0.2 7.2
Commodities (%)
1 week YTD
BBG Com Ind -0.4 -2.4
Oil 0.5 -11.2
Gold -2.1 11.8
Currencies (USD) (%)
1 week YTD
EM FX -0.45 8.95
AUD -0.31 10.19
CAD -1.04 9.01
CHF -0.89 4.90
EUR 0.05 13.48
GBP -0.49 9.48
JPY -0.80 4.20

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 8/31/17

as tracked by Strategic Insight
MONTH 12 Month ASSETS
U.S. equity -5.7 51.5 7,096.2
Sector equity -5.2 11.9 827.6
Allocation -3.6 -32.3 1,236.1
International equity 15.4 172.0 2,969.5
Alternative 2.2 -4.2 206.4
Commodities 1.2 -4.3 91.2
Taxable bond 29.8 324.7 3,501.3
Municipal bond 4.6 4.8 690.0
Total all long-term funds 37.3 498.2 16,635.0

Leading Morningstar fund categories by monthly net flows ($B) as of 8/31/17

MONTH 12 Month ASSETS
Intermediate-term bond 14.5 119.5 1,332.6
Foreign large blend 10.5 113.4 1,077.5
Large blend 8.6 128.6 2,841.3
Multisector bond 4.2 27.8 218.2
Ultrashort bond 3.7 37.3 116.8

Lagging Morningstar fund categories by monthly net flows ($B) as of 8/31/17

MONTH 12 Month ASSETS
Large growth -5.3 -77.6 1,501.2
Large value -4.3 -14.7 1,133.1
High yield bond -3.0 -11.3 310.1
Health -2.1 -9.6 162.8
Mid-cap blend -1.7 14.6 392.9
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