Weekly Market Recap

Week ended September 14

Market-moving news

Market-moving news

Market-moving news
Bouncing back

The major stock indexes rose around 1% for the week, making up ground after declining the previous week. The S&P 500 and the NASDAQ remained slightly below their record highs set in late August, while the Dow was about 2% shy of its record set in late January.

Market-moving news
Industrial comeback

Industrials sector stocks have trailed the broader market so far this year, but they’ve outperformed recently. The sector climbed nearly 5% over the monthlong period that ended Thursday, making it the top performer among 11 sectors in the S&P 500.

 

Market-moving news
Flirting with 3%

The yield of the 10-year U.S. Treasury bond climbed for the third week in a row, rising to 3.00% in intraday trading on Friday. As recently as August 24, the yield was just 2.82%. Expectations of rising inflation have helped push yields higher in recent weeks.  

Market-moving news
Inflation moderation

Despite recent upticks in wages and consumer prices, inflation softened during August. The Consumer Price Index rose at a 2.7% annual rate last month, down from 2.9% in July. A separate report showed retail sales growth slowed in August relative to July’s rapid gain.

Market-moving news
Trade rally

Stocks recorded their biggest daily gains for the month on Thursday as the Dow climbed 147 points amid reports that the United States was seeking a fresh round of trade talks with China. Meanwhile, the Trump administration continued debating whether to impose additional tariffs on about $200 billion in Chinese products. 

Market-moving news
Factories humming

U.S. industrial output rose more than expected in August, largely because of increased production of vehicles and automotive parts. Overall, industrial production was up 4.9% compared with the same month a year earlier.

 

Oil loses traction

Prices of crude oil eclipsed $70 per barrel on Wednesday but then fell below that threshold, repeating a cycle that has played out several times in recent months. On Thursday, news of a production increase by a consortium of oil-producing nations sent prices down to around $68 per barrel.

 

Euro outlook

The European Central Bank trimmed its economic growth forecast for this year while keeping inflation expectations unchanged. The bank also confirmed a plan outlined in June to begin winding down its bond-buying stimulus program by year end.

The week ahead: September 17–21

Monday

  • No major reports scheduled  

 

 

 

Tuesday

  • Housing Market Index, National Association of Home Builders

     

 

 

Wednesday

  • Housing starts, U.S. Census Bureau

Thursday

  • The Conference Board Leading Economic Index for the U.S.
  • Existing home sales, National Association of Realtors

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. 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 9/14/18
1 week
0.91.21.6 Large
1.01.21.6 Mid
0.20.50.9 Small
Value Core Growth
YTD
4.210.316.4 Large
4.08.514.6 Mid
8.513.117.5 Small
Value Core Growth
Index/market total returns as of 9/14/18 (%)
Close Week YTD
Dow Jones Industrial Average 26,154.7 0.9 7.6
NASDAQ Composite Index 8,010.0 1.4 16.9
S&P 500 Index 2,905.0 1.2 10.2
MSCI EAFE Index 1,939.0 1.8 -3.0
Cboe Volatility Index 12.1 -18.8 9.6
International/developed (%)
1 week YTD
EAFE 1.8 -3.0
Europe 1.8 -3.1
France 2.5 1.7
Germany 1.9 -7.3
Italy 2.9 -5.1
Japan 1.9 -2.4
Spain 3.0 -7.8
Switzerland 1.7 0.7
U.K. 1.4 -5.2
Emerging markets (%)
1 week YTD
EM 0.6 -9.2
Brazil -4.0 -20.0
China 0.6 -11.1
India -0.9 -3.2
Indonesia 1.1 -17.3
Korea 2.0 -10.8
Mexico 3.3 4.0
Russia 4.2 0.0
Taiwan -0.2 4.4
S&P 500 sectors (%)
1 week YTD
S&P 500 Index 1.2 10.2
Consumer discretionary 1.2 19.4
Consumer staples 0.8 -2.5
Energy 2.1 4.6
Financials -0.3 2.0
Healthcare 1.1 14.2
Industrials 1.9 5.2
Information tech 1.9 19.7
Materials 0.6 -0.6
REITs 0.4 3.6
Telecom 2.9 -0.5
Utilities 0.4 5.0

Fixed income, currencies, and commodities

U.S. fixed-income style total returns (%) as of 9/14/18
1 week
0.0-0.2-0.5 Large
-0.1-0.10.5 Mid Quality
0.20.50.5 Small
Value Core Growth
INTEREST RATE SENSITIVITY
YTD
0.9-0.7-4.8 Large
0.2-0.8-4.9 Mid Quality
4.22.3-0.2 Small
Value Core Growth
INTEREST RATE SENSITIVITY
U.S. Treasury bond yields as of 9/14/18 (%)
END OF WEEK PRIOR YEAR END YTD CHANGE (BPS)
2 Yr 2.77 1.88 +89
10 Yr 2.99 2.41 +58
30 Yr 3.13 2.74 +39
2-10 spread 0.21 0.53 -31
10-30 spread 0.14 0.33 -19
U.S. bond sector total returns (%)
1 week YTD
Aggregate -0.1 -1.5
Bank loans 0.2 3.0
Convertible 0.9 8.1
Corporate 0.0 -2.5
High yield 0.5 2.3
MBS -0.1 -1.0
Municipal -0.2 -0.2
Preferreds 0.8 0.5
TIPS -0.3 -0.7
Treasury -0.2 -1.5
Global bond total returns (%)
1 week YTD
EM Local 1.4 -12.8
EMD USD 0.6 -4.2
Global Agg 0.0 -1.9
Global Agg Ex-U.S. 0.1 -2.1
Multiverse 0.0 -2.0
Commodities (%)
1 week YTD
BBG Com Ind -0.1 -5.3
Oil (WTI) 1.8 19.4
Gold 0.1 -9.1
Currencies (USD) (%)
1 week YTD
EM FX 0.7 -7.5
AUD 0.5 -8.2
CAD 0.9 -3.9
CHF 0.2 0.9
EUR 0.7 -2.8
GBP 1.0 -3.3
JPY -0.9 0.5

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 8/31/18

as tracked by Strategic Insight
MONTH 12 Month ASSETS
U.S. equity -2.1 -34.7 8,412.2
Sector equity -0.2 18.2 935.7
Allocation -4.5 -41.2 1,285.0
International equity 3.2 151.8 3,176.9
Alternative -1.1 0.4 207.5
Commodities -3.0 3.6 88.6
Taxable bond 18.8 303.3 3,742.9
Municipal bond 1.5 24.2 715.3
Total all long-term funds 11.3 402.3 18,582.1

Leading Morningstar fund categories by monthly net flows ($B) as of 8/31/18

MONTH 12 Month ASSETS
Ultrashort Bond 9.5 62.4 187.1
Foreign Large Blend 3.5 108.6 1,215.6
Health 2.6 -6.1 182.6
Long Government 2.4 18.0 47.2
Small Growth 1.9 7.6 288.6

Lagging Morningstar fund categories by monthly net flows ($B) as of 8/31/18

MONTH 12 Month ASSETS
Large Value -3.8 -32.9 1,240.3
Large Growth -2.6 -39.0 1,806.6
World Allocation -2.0 -9.0 304.6
Allocation--30% to 50% Equity -1.7 -11.0 217.4
Commodities Precious Metals -1.7 0.0 47.1
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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