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Weekly Market Recap

Week ended April 3

Market-moving news

Relief rally stalls

The stock market’s positive momentum from the previous week’s double-digit gains petered out, and the major U.S. indexes fell around 2% to 3%. Stocks had a hard time gaining traction as coronavirus cases continued to surge in the United States and most other countries, and the economic impact widened.

Bearish quarter

The first three months of 2020 marked the worst first quarter ever for the S&P 500 and the Dow, although there have been steeper declines counting data from three-month periods other than first quarters. The S&P 500 dropped about 20%, the Dow tumbled 23%, and the NASDAQ sustained a relatively modest 14% decline.

More pain to come

The loss of 701,000 jobs and unemployment rate spike from 3.5% to 4.4% in the March labor report reflected only the “early effects” of the coronavirus impact, the government said, as the numbers were based on surveys conducted March 8–14―before government-mandated shutdowns went into full effect. Meanwhile, the latest weekly report showed 6.6 million unemployment claims filed—double the previous record set in the preceding week.

Modest comeback

If it hadn’t been for the precipitous drop that preceded it, the latest week’s 32% rise in crude oil prices would have been impressive. Prices were lifted by prospects of production cuts by the OPEC consortium of oil-producing countries and talk of a possible truce between Saudi Arabia and Russia. Although U.S. crude rose to about $28 per barrel as of Friday, the price was down nearly 54% year to date.

Relative calm

An index that measures investors’ expectations of stock market volatility over the next 30 days fell to around 47, down from more than 65 at the end of the previous week. While the Cboe Volatility Index remained relatively high from a historical perspective, the index is down from a peak of more than 84 reached on March 18.

Bond price rally

Prices of government bonds climbed, sending the yield of the 10-year U.S. Treasury bond to a level just above a record low of 0.54% set on March 9, 2020. The 10-year yield was around 0.59% on Friday, compared with 0.73% at the close of the previous week.

China's stabilization

China’s central bank acknowledges that its economy still needs support even as many citizens return to work following China’s surge in coronavirus cases. For the second time in less than a month, the People’s Bank of China on Friday lowered the amount of cash banks are required to set aside as reserves.

Negative earnings

With quarterly earnings season about to get under way, 2020 is expected to bring the biggest year-over-year decrease in earnings since 2008’s 25.4% drop. As of March 30, FactSet projected that earnings for companies in the S&P 500 will decrease by 1.2% this year. The research firm expects a 5.2% first-quarter decline followed by a 10.0% drop in the second quarter.

The week ahead: April 6-10

Monday

No major reports scheduled

Tuesday

Job Openings and Labor Turnover Survey, U.S. Bureau of Labor Statistics
Consumer credit, U.S. Federal Reserve

Wednesday

Release of minutes from March 15 meeting of the U.S. Federal Reserve Board

Thursday

Weekly unemployment claims, U.S. Department of Labor
Producer Price Index, U.S. Bureau of Labor Statistics
University of Michigan Index of Consumer Sentiment, preliminary resul
Wholesale inventories, U.S. Census Bureau

Friday

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

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

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 4/3/20

1 week YTD

1 week
-3.1	-2.5	-2.0	Large
-6.7	-5.7	-4.4	Mid
-8.1	-7.0	-6.0	Small
Value	Core	Growth

YTD
-29.6	-23.4	-17.6	Large
-36.2	-31.4	-24.2	Mid
-41.8	-36.7	-31.8	Small
Value	Core	Growth

Index/market total returns as of 4/3/20 (%)

Close Week YTD

	Close	Week	YTD
Dow Jones Industrial Average	21,052.5	-2.6	-25.7
NASDAQ Composite Index	7,373.1	-1.7	-17.6
S&P 500 Index	2,488.7	-2.0	-22.6
MSCI EAFE Index	1,487.1	-3.7	-26.3
Cboe Volatility Index	46.8	-28.5	239.1

International/developed (%)

1 week YTD

	1 week	YTD
EAFE	-3.7	-26.3
Europe	-2.7	-27.9
France	-6.7	-32.5
Germany	-3.4	-30.8
Italy	-5.1	-33.0
Japan	-7.9	-21.3
Spain	-5.1	-32.7
Switzerland	1.2	-12.1
U.K.	-2.9	-33.0

Emerging markets (%)

1 week YTD

	1 week	YTD
EM	-1.2	-25.1
Brazil	-8.1	-53.4
China	-0.4	-11.6
India	-6.7	-35.5
Indonesia	-1.1	-38.9
Korea	-2.5	-25.0
Mexico	-6.9	-40.9
Russia	11.1	-33.1
Taiwan	-1.0	-19.6

S&P 500 sectors (%)

1 week YTD

	1 week	YTD
S&P 500 Index	-2.0	-22.6
Communication services	-1.4	-20.5
Consumer discretionary	-4.7	-23.4
Consumer staples	3.5	-11.4
Energy	5.4	-49.2
Financials	-6.6	-35.8
Healthcare	2.1	-14.5
Industrials	-4.4	-30.5
Information tech	-2.0	-15.6
Materials	-3.7	-30.1
Real estate	-6.0	-23.7
Utilities	-7.1	-19.3

Fixed income, currencies, and commodities

U.S. fixed-income style total returns (%) as of 4/3/20

1 week YTD

1 week
0.0	0.4	2.5	High
0.2	0.5	1.3	Med	QUALITY
-1.0	-1.0	1.4	Low
Ltd	Int	Long
INTEREST-RATE SENSITIVITY

YTD
1.6	5.3	24.1	High
2.6	2.6	-9.6	Med	QUALITY
-13.1	-15.2	-14.0	Low
Ltd	Int	Long
INTEREST-RATE SENSITIVITY

U.S. Treasury bond yields as of 4/3/20 (%)

END OF WEEK PRIOR YEAR END YTD CHANGE (BPS)

	END OF WEEK	PRIOR YEAR END	YTD CHANGE (BPS)
2 Yr	0.19	1.58	-139
10 Yr	0.59	1.92	-133
30 Yr	1.21	2.39	-118
2-10 spread	0.40	0.34	+6
10-30 spread	0.62	0.47	+15

U.S. bond sector total returns (%)

1 week YTD

	1 week	YTD
Aggregate	0.7	3.4
Bank loans	2.6	-10.0
Convertible	-2.1	-15.7
Corporate	1.3	-5.3
High yield	-1.0	-15.2
MBS	0.1	2.9
Municipal	-2.1	-2.4
Preferreds	-2.6	-11.3
TIPS	1.6	3.8
Treasury	0.8	9.0

Global bond total returns (%)

1 week YTD

	1 week	YTD
EM Local	-3.6	-16.2
EMD USD	-0.4	-13.9
Global Agg	-0.5	-0.7
Global Agg Ex-U.S.	-1.2	-3.3
Multiverse	-0.5	-1.5

Commodities (%)

1 week YTD

	1 week	YTD
BBG Com Ind	-0.8	-22.9
Oil (WTI)	31.8	-53.7
Gold	-0.5	7.7

Currencies (USD) (%)

1 week YTD

	1 week	YTD
EM FX	-2.1	-12.3
AUD	-1.9	-14.5
CAD	-0.2	-8.0
CHF	-2.2	-0.9
EUR	-2.3	-3.8
GBP	-0.8	-7.5
JPY	-0.3	0.2

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	1.0	0.7	7.3	_	_
China	6.0	5.2	3.6	2.64	A+
Germany	0.4	1.4	3.2	-0.44	AAA
Japan	-0.7	0.4	2.4	-0.01	A+
U.K.	1.1	1.7	3.9	0.31	AA

GDP Growth (%) annualized
Eurozone	1.0
China	6.0
Germany	0.4
Japan	-0.7
U.K.	1.1

Inflation Rate (%) CPI
Eurozone	0.7
China	5.2
Germany	1.4
Japan	0.4
U.K.	1.7

Unemployment Rate (%)
Eurozone	7.3
China	3.6
Germany	3.2
Japan	2.4
U.K.	3.9

10-Year Government Bond (%)
Eurozone	_
China	2.64
Germany	-0.44
Japan	-0.01
U.K.	0.31

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

Fund industry overview

Total net flows: open-end funds and ETFs ($B) as of 2/29/20

as tracked by ISS Market Intelligence SIMFUND

MONTH 12 Month ASSETS

	MONTH	12 Month	ASSETS
U.S. equity	-12.5	-91.5	8,340.4
Sector equity	-4.1	-32.0	873.9
Allocation	-3.1	-40.7	1,252.2
International equity	12.0	27.2	3,112.7
Alternative	-0.1	-5.3	184.0
Commodities	3.1	12.0	113.9
Taxable bond	20.0	424.0	4,518.7
Municipal bond	10.7	110.4	909.2
Total all long-term funds	23.6	372.4	19,315.7

Leading Morningstar fund categories by monthly net flows ($B) as of 2/29/20

	MONTH	12 Month	ASSETS
Foreign Large Blend	18.7	72.7	1,157.1
Intermediate Core-Plus Bond	10.6	81.9	747.9
Ultrashort Bond	6.5	47.6	284.7
Short-Term Bond	6.3	45.5	459.8
Intermediate Government	5.9	43.3	196.2

Lagging Morningstar fund categories by monthly net flows ($B) as of 2/29/20

	MONTH	12 Month	ASSETS
High Yield Bond	-7.8	7.7	295.0
Large Growth	-6.6	-79.9	1,760.3
Japan Stock	-2.9	-9.4	22.0
Large Value	-2.9	-23.5	1,100.1
World Bond-USD Hedged	-2.7	26.4	215.6

Unless otherwise noted, all data is from FactSet.

Oil prices are represented by West Texas Intermediate (WTI) crude oil.

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Detailed weekly data on equities and fixed income—factors, fundamentals, styles/sizes, sectors/industries/stocks

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