Weekly Market Recap

Week ended April 9

Market-moving news

Sustained momentum

The Dow and the S&P 500 climbed for the third week in a row, rising around 2% to 3% and pushing their record levels higher in a mostly quiet week of trading. The biggest moves came on Monday, when stocks rose on the heels of a strong monthly jobs report released on April 2, a day of a holiday market closure.

Earnings optimism

Wall Street analysts are expecting big things entering the quarterly earnings season that opens in mid-April, when major banks begin to issue results. First-quarter earnings for companies in the S&P 500 are forecast to jump more than 24%, with the consumer discretionary and financials sectors expected to see the biggest gains, according to FactSet.

Mixed signals

U.S. economic indicators were mixed for the week. On the positive side, a monthly gauge of services sector activity posted record growth. However, a higher-than-expected total of 744,000 workers filed initial claims for unemployment benefits, marking the second such weekly increase in a row.

Reversal of fortune

For the second week in a row, an index of U.S. large-cap growth stocks outperformed its value-oriented counterpart by a wide margin, interrupting value’s recent run of relative gains versus the growth style. As in the previous week, some of the biggest technology stocks set record highs while stocks of companies more sensitive to cyclical economic changes lagged.

Dollar's setback

The U.S. dollar had a strong start to 2021, rising about 4% versus other major currencies from early January to the end of March. But the dollar has reversed course in April, losing about 1% so far this month. Analysts cite continuing expectations that the U.S. Federal Reserve won’t raise interest rates anytime soon despite the economy’s growth.

Fed outlook

U.S. Federal Reserve Chair Jerome Powell said that the Fed is looking for "actual progress" rather than forecasts in reaching the central bank's employment and inflation goals. He also reinforced expectations that the Fed will maintain its accommodative policy stance by noting that the economy still has a way to go before reaching the Fed’s targets.

Yield pullback

For the second week out of the past three, yields of U.S. government debt slipped as bond prices recovered, deflating some of 2021’s surge in yields. The yield of the 10-year U.S. Treasury bond fell to around 1.67%, down from a recent high of 1.74% on March 31. Nevertheless, the yield is still up sharply from 0.92% at the end of last year.

Dividend restoration

The dollar amount of dividend increases in U.S. common stocks in the just-completed first quarter was the largest quarterly figure in nine years, according to S&P Dow Jones Indices. For stocks in the S&P 500 Index, aggregate increases—not factoring in decreases—rose to $20.3 billion, compared with $13.9 billion in last year’s fourth quarter.

The week ahead: April 12-16

Monday

Federal budget, U.S. Department of the Treasury

Tuesday

Consumer Price Index, U.S. Bureau of Labor Statistics

Wednesday

Export and import prices, U.S. Bureau of Labor Statistics

Thursday

Retail sales, business inventories, U.S. Census Bureau
Weekly unemployment claims, U.S. Department of Labor
Industrial production and capacity utilization, U.S. Federal Reserve

Friday

University of Michigan Index of Consumer Sentiment, preliminary result
Housing starts, U.S. Census Bureau

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. The Russell 2000 Index tracks the performance of approximately 2,000 publicly traded small-cap companies in the United States. 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.

Investment returns

Equities

U.S. equity size and style total returns as of 4/9/21 (%)

1 week YTD

1 week
1.3	2.7	4.0	Large
1.1	1.5	2.3	Mid
-0.3	-0.5	-0.6	Small
Value	Core	Growth

YTD
13.7	10.1	6.7	Large
15.7	11.4	3.7	Mid
22.4	13.9	6.0	Small
Value	Core	Growth

Index/market total returns as of 4/9/21 (%)

Close Week YTD

	Close	Week	YTD
Dow Jones Industrial Average	33,800.6	2.0	11.0
NASDAQ Composite Index	13,900.2	3.1	8.0
S&P 500 Index	4,128.8	2.8	10.4
MSCI EAFE Index	2,262.5	1.8	6.2
Cboe Volatility Index	16.7	-3.5	-26.8

International/developed (%)

1 week YTD

	1 week	YTD
EAFE	1.8	6.2
Europe	2.3	7.4
France	2.3	7.7
Germany	2.2	7.6
Italy	-0.1	6.5
Japan	0.3	3.1
Spain	1.2	2.0
Switzerland	3.5	2.3
U.K.	2.0	8.9

Emerging markets (%)

1 week YTD

	1 week	YTD
EM	-0.6	3.5
Brazil	2.7	-9.2
China	-2.2	0.0
India	-1.4	5.0
Indonesia	0.9	-6.9
Korea	0.8	5.0
Mexico	1.6	6.6
Russia	-3.6	0.3
Taiwan	1.7	14.2

S&P 500 sectors (%)

1 week YTD

	1 week	YTD
S&P 500 Index	2.8	10.4
Communication services	3.4	14.0
Consumer discretionary	4.2	8.5
Consumer staples	1.5	2.4
Energy	-4.0	28.9
Financials	2.0	19.8
Healthcare	1.3	4.3
Industrials	1.8	13.8
Information tech	4.7	9.0
Materials	0.7	10.8
Real estate	0.6	11.4
Utilities	1.3	4.1

Fixed income, currencies, and commodities

U.S. fixed-income style total returns as of 4/9/21 (%)

1 week YTD

1 week
0.0	0.3	0.7	High
0.1	0.4	0.4	Med	QUALITY
0.3	0.5	0.8	Low
Ltd	Int	Long
INTEREST-RATE SENSITIVITY

YTD
0.0	-1.5	-12.1	High
-0.1	-1.3	-6.2	Med	QUALITY
2.8	1.6	-0.1	Low
Ltd	Int	Long
INTEREST-RATE SENSITIVITY

U.S. Treasury bond yields as of 4/9/21 (%)

END OF WEEK PRIOR YEAR END YTD CHANGE (BPS)

	END OF WEEK	PRIOR YEAR END	YTD CHANGE (BPS)
2 Yr	0.15	0.12	+3
10 Yr	1.67	0.92	+75
30 Yr	2.34	1.65	+69
2-10 spread	1.51	0.80	+71
10-30 spread	0.68	0.73	-5

U.S. bond sector total returns (%)

1 week YTD

	1 week	YTD
Aggregate	0.4	-2.9
Bank loans	0.3	1.0
Convertible	1.3	4.9
Corporate	0.5	-4.2
High yield	0.5	1.6
MBS	0.4	-0.8
Municipal	0.4	0.1
Preferreds	0.6	-1.2
TIPS	0.0	-1.4
Treasury	0.4	-3.8

Global bond total returns (%)

1 week YTD

	1 week	YTD
EM Local	1.2	-5.2
EMD USD	0.6	-3.6
Global Agg	0.6	-3.8
Global Agg Ex-U.S.	0.7	-4.3
Multiverse	0.6	-3.7

Commodities (%)

1 week YTD

	1 week	YTD
BBG Com Ind	0.2	7.7
Oil (WTI)	-3.5	22.9
Gold	0.9	-8.3

Currencies (USD) (%)

1 week YTD

	1 week	YTD
EM FX	0.6	-2.5
AUD	0.3	-1.1
CAD	0.1	1.5
CHF	1.9	-4.5
EUR	1.1	-2.8
GBP	-0.7	0.4
JPY	0.9	-5.8

U.S. economy

GDP

Jobs

Inflation

Ex-U.S.

Regions/countries

	GDP Growth (%) annualized	Inflation Rate (%) CPI	Unemployment Rate (%)	10-Year Government Bond (%)	Sovereign Credit Rating
Eurozone	-4.9	1.3	8.3	_	_
China	6.5	0.4	5.5	3.24	A+
Germany	-3.7	1.7	4.5	-0.31	AAA
Japan	-1.4	-0.4	2.9	0.10	A+
U.K.	-7.3	0.4	5.0	0.78	AA

GDP Growth (%) annualized
Eurozone	-4.9
China	6.5
Germany	-3.7
Japan	-1.4
U.K.	-7.3

Inflation Rate (%) CPI
Eurozone	1.3
China	0.4
Germany	1.7
Japan	-0.4
U.K.	0.4

Unemployment Rate (%)
Eurozone	8.3
China	5.5
Germany	4.5
Japan	2.9
U.K.	5.0

10-Year Government Bond (%)
Eurozone	_
China	3.24
Germany	-0.31
Japan	0.10
U.K.	0.78

Sovereign Credit Rating
Eurozone	_
China	A+
Germany	AAA
Japan	A+
U.K.	AA

Fund industry overview

Total net flows: open-end funds and ETFs as of 2/28/21 ($B)

as tracked by ISS Market Intelligence SIMFUND

MONTH 12 Month ASSETS

	MONTH	12 Month	ASSETS
U.S. Equity	36.5	-208.3	10,971.4
Sector Equity	21.4	89.8	1,192.8
Allocation	-3.8	-77.8	1,358.7
International Equity	17.6	-51.3	3,855.9
Alternative	6.9	9.9	210.6
Commodities	-0.7	31.8	163.7
Taxable Bond	60.9	510.0	5,088.3
Municipal Bond	8.6	55.2	959.8
Total all long-term funds	145.8	299.7	23,809.2

Leading Morningstar fund categories by monthly net flows as of 2/28/21 ($B)

	MONTH	12 Month	ASSETS
Large Blend	24.7	-89.0	4,892.8
Intermediate Core Bond	18.3	154.4	1,204.4
Short-Term Bond	11.4	88.0	544.3
Diversified Emerging Mkts	7.9	1.0	727.2
Inflation-Protected Bond	6.3	33.1	219.0

Lagging Morningstar fund categories by monthly net flows as of 2/28/21 ($B)

	MONTH	12 Month	ASSETS
Commodities Focused	-3.5	30.1	127.0
Large Growth	-3.5	-77.4	2,423.3
Corporate Bond	-3.1	44.5	217.7
High Yield Bond	-2.3	54.4	372.2
Allocation--30% to 50% Equity	-1.9	-16.6	232.2

Unless otherwise noted, all data is from FactSet.

The Treasury yield curve is derived from available U.S. Treasury securities trading in the market and is provided directly from 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 GDP, and over 75% of global trade.

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April 15, 2021

Infrastructure, taxes, and technicals: factors that support muni bonds now

Dennis DiCicco, Portfolio Manager Manulife Investment Management

Political change in Washington has given way to an avalanche of recovery funds for states, a much-needed infrastructure spending plan for the nation, and expectations for higher taxes. This amounts to welcome news for muni bond investors.

Watch video

April 13, 2021

Fed policy: what comes next?

Emily R. Roland, CIMA, Co-Chief Investment Strategist John Hancock Investment Management

Matthew D. Miskin, CFA, Co-Chief Investment Strategist John Hancock Investment Management

A review of Federal Reserve policy objectives and some of the key financial data the Fed examines in making policy, and a view on where we stand now.

April 13, 2021

Three-minute macro: what’s driving earnings?

Erica Camilleri, Investment Analyst Manulife Investment Management

Frances Donald, Global Chief Economist and Global Head of Macroeconomic Strategy, Multi-Asset Solutions Team, Manulife Investment Management Manulife Investment Management

The drivers of equity market performance so far this year look very different than last. We’re also mindful of a potential cooling in the housing market, while we expect major financial institutions to keep track of inequality issues going forward.

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