Weekly Market Recap

Week ended January 24

Market-moving news

Market-moving news

Market-moving news
A step backward

The stock market’s positive momentum from the first two full weeks of 2020 was interrupted by geopolitical worries, and the major U.S. indexes fell around 1%. The Cboe Volatility Index, a gauge of investors’ short-term market volatility expectations, jumped 21% to a level that was roughly in line with its historical average.  

Market-moving news
Earnings scorecard

It’s the peak of earnings season, with nearly 150 companies in the S&P 500 Index and 14 of the Dow’s 30 components scheduled to report quarterly results in the week that starts January 27. Through January 23, 73% of companies reported earnings that exceeded analysts’ estimates—a beat rate that ranks above the five-year average, according to FactSet.    

Market-moving news
Virus outbreak

One of the key factors that weighed on global financial markets—especially Chinese stocks—was the recognition that a new flu-like virus could pose a global health threat. The coronavirus has been blamed for dozens of deaths in China, and the second U.S. case of coronavirus infection was confirmed on Friday.

Market-moving news
Oil slide

U.S. crude oil prices tumbled 7.5% to around $54 per barrel, the lowest level in three months. Among the factors that depressed prices were travel restrictions resulting from the emergence of the coronavirus—a health threat that appears to have originated in China. 

Market-moving news
Yields drop

Prices of government bonds extended their year-to-date climb, sending yields sharply lower, as the yield of the 10-year U.S. Treasury bond slipped below 1.70% on Friday for the first time in more than three months. At the end of 2019, the yield was 1.92%.

Market-moving news
Energy woes

The energy sector is expected to be a key laggard in earnings season as companies continue to report fourth-quarter results. Analysts expect profits in the sector will tumble by 43% relative to the previous year’s fourth quarter, according to FactSet. Excluding energy, profits across the other 10 sectors are forecast to rise 0.2%. 

Market-moving news
Brexit's arrival

The leaders of the European Union and the United Kingdom signed an agreement to move ahead with the long-delayed Brexit. The nation’s formal separation from the EU is scheduled for January 31, although Britain has agreed to abide by EU rules during a transition period until the end of this year. 

Market-moving news
Fed ahead

.The U.S. Federal Reserve is widely expected to keep interest rates unchanged when it concludes a two-day meeting on Wednesday. Fed statements will be closely watched for any indications as to whether the central bank will bolster market expectations that it could maintain its current neutral stance on rates throughout 2020, absent any big surprises in the economic outlook. 

The week ahead: January 27-31

Monday 

  • New home sales, U.S. Census Bureau 

 

Tuesday

  • U.S. Federal Reserve Board opens two-day policy meeting
  • S&P/Case-Shiller 20-City Composite Home Price Index
  • Consumer Confidence Index, The Conference Board
  • Durable goods orders, U.S. Census Bureau

Wednesday

  • U.S. Federal Reserve Board concludes two-day policy meeting, Chairman Jerome Powell holds press conference
  • Pending home sales, National Association of Realtors  

Thursday

  • Fourth-quarter GDP, advance 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;

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 1/24/20
1 week
-1.2-1.0-0.7 Large
-1.4-1.1-0.6 Mid
-2.5-2.2-1.9 Small
Value Core Growth
YTD
0.22.24.1 Large
0.41.73.5 Mid
-2.2-0.31.5 Small
Value Core Growth
Index/market total returns as of 1/24/20 (%)
Close Week YTD
Dow Jones Industrial Average 28,989.7 -1.2 1.7
NASDAQ Composite Index 9,314.9 -0.8 3.8
S&P 500 Index 3,295.5 -1.0 2.1
MSCI EAFE Index 2,044.9 -0.6 0.4
Cboe Volatility Index 14.6 20.7 5.8
International/developed (%)
1 week YTD
EAFE -0.6 0.4
Europe -0.9 0.1
France -1.7 -0.6
Germany -0.2 0.7
Italy -1.3 0.1
Japan 0.4 0.2
Spain -1.7 -1.5
Switzerland 0.0 2.2
U.K. -0.9 -0.7
Emerging markets (%)
1 week YTD
EM -2.4 0.5
Brazil -0.1 -1.8
China -4.9 0.0
India -0.7 2.2
Indonesia 0.2 3.9
Korea -1.2 2.6
Mexico -2.1 4.2
Russia -2.7 3.0
Taiwan 0.0 1.0
S&P 500 sectors (%)
1 week YTD
S&P 500 Index -1.0 2.1
Communication services -1.4 4.0
Consumer discretionary -1.5 0.5
Consumer staples -0.4 1.1
Energy -4.2 -5.8
Financials -2.2 -1.3
Healthcare -2.0 0.5
Industrials -1.0 2.5
Information tech 0.3 6.3
Materials -2.3 -2.7
Real estate 1.0 3.3
Utilities 2.4 5.8

Fixed income, currencies, and commodities

U.S. fixed-income style total returns (%) as of 1/24/20
1 week
0.10.53.2 High
0.20.41.8 Med QUALITY
-0.2-0.4-0.2 Low
Ltd Int Long
INTEREST-RATE SENSITIVITY
YTD
0.20.84.6 High
0.30.73.3 Med QUALITY
0.40.31.5 Low
Ltd Int Long
INTEREST-RATE SENSITIVITY
U.S. Treasury bond yields as of 1/24/20 (%)
END OF WEEK PRIOR YEAR END YTD CHANGE (BPS)
2 Yr 1.48 1.58 -10
10 Yr 1.68 1.92 -24
30 Yr 2.13 2.39 -26
2-10 spread 0.20 0.34 -14
10-30 spread 0.45 0.47 -2
U.S. bond sector total returns (%)
1 week YTD
Aggregate 0.8 1.3
Bank loans -0.1 0.4
Convertible 0.4 4.1
Corporate 0.9 1.6
High yield -0.4 0.3
MBS 0.2 0.5
Municipal 0.4 1.4
Preferreds -0.3 0.6
TIPS 0.7 1.2
Treasury 1.0 1.5
Global bond total returns (%)
1 week YTD
EM Local 0.1 -0.1
EMD USD 0.0 0.9
Global Agg 0.6 0.4
Global Agg Ex-U.S. 0.5 -0.1
Multiverse 0.5 0.4
Commodities (%)
1 week YTD
BBG Com Ind -3.1 -4.3
Oil (WTI) -7.5 -10.7
Gold 0.8 3.3
Currencies (USD) (%)
1 week YTD
EM FX -0.4 -0.7
AUD -0.7 -2.9
CAD -0.6 -1.3
CHF -0.3 -0.3
EUR -0.6 -1.8
GBP 0.3 -1.4
JPY 0.7 -0.7

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 12/31/19

as tracked by ISS Market Intelligence SIMFUND
MONTH 12 Month ASSETS
U.S. equity -15.2 -70.4 9,141.8
Sector equity -6.9 -36.5 944.7
Allocation -3.1 -39.0 1,316.0
International equity 6.1 13.3 3,403.9
Alternative -2.3 -13.1 182.6
Commodities -0.9 8.8 108.0
Taxable bond 45.8 411.5 4,346.0
Municipal bond 10.2 104.6 860.0
Total all long-term funds 29.5 344.7 20,317.3

Leading Morningstar fund categories by monthly net flows ($B) as of 12/31/19

MONTH 12 Month ASSETS
Intermediate Core Bond 17.5 128.1 983.6
Foreign Large Blend 7.5 44.0 1,254.0
Intermediate Core-Plus Bond 6.8 63.3 704.6
Diversified Emerging Mkts 4.8 18.9 601.4
Muni National Interm 4.4 45.7 269.3

Lagging Morningstar fund categories by monthly net flows ($B) as of 12/31/19

MONTH 12 Month ASSETS
Large Growth -11.6 -72.8 1,869.3
Large Value -3.6 -22.0 1,252.9
Financial -2.7 -10.5 57.0
Nontraditional Bond -2.2 -8.5 153.6
World Large Stock -2.1 -17.9 427.1

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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