Weekly Market Recap
Week ended September 30
Market-moving news
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Relentless decline
Although losses weren’t as steep as those in the previous two weeks, the major U.S. stock indexes fell nearly 3%, declining for the sixth time in the past seven weeks. The Dow on Monday joined the S&P 500 and the NASDAQ in bear market territory, as the Dow declined more than 20% from its level of early January.
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Rough-and-tumble bond market
The yield of the 10-year U.S. Treasury bond rose modestly in what was otherwise an unusually volatile week in the bond market. The yield surged as high as 3.99% on Tuesday to the highest level in 14 years. The next day, it tumbled to 3.71% before ending Friday’s trading at around 3.80%.
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U.K.'s fragile economy
A plan by the United Kingdom’s new government to implement tax cuts and spending increases funded by borrowing triggered further weakness for Britain’s currency. It also prompted a swift response from the U.K.’s central bank, which tried to stabilize credit markets by launching a bond-buying program.
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September swoon
The stock market’s late summer downturn extended into September and the major U.S. indexes fell for the third quarter in a row. The S&P 500 and the Dow both posted monthly declines of around 9% and the NASDAQ dropped more than 10%—all steeper than the prior month’s losses.
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Surging euro inflation
Rising energy costs fueled another spike in European inflation, with the eurozone reporting that its key inflation gauge rose at an annual 10.0% rate in September, up from 9.1% the previous month. Separately, Germany reported an even steeper increase, with inflation climbing to 10.9% from 8.8% the previous month.
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Shrinking expectations
Amid a challenging economic backdrop, analysts have scaled back their forecasts for the third-quarter earnings results that are scheduled to begin coming out in mid-October. As of the end of September, analysts had reduced their consensus earnings forecast for the S&P 500 by 6.6% relative to what they had expected three months earlier, according to FactSet.
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PCE inflation rises
Despite the U.S. Federal Reserve’s efforts to contain inflation, a monthly inflation metric that the Fed uses as its preferred gauge of price trends rose more than expected. Excluding volatile food and energy, consumer prices rose 4.9% in August from a year earlier, up from 4.7% the previous month as measured by the personal consumption expenditures price index.
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Jobs ahead
A monthly U.S. labor market update due out on Friday will show whether the strong—but moderating—jobs growth recorded in recent months extended into September. In August, the economy generated 315,000 new jobs—down from 526,000 in July—while the unemployment rate rose to 3.7% from 3.5%.
The week ahead: October 3-7
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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 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.
MF2452311
Investment returns
Equities
U.S. equity size and style total returns as of 9/30/22 (%)
1 week
| -2.6 | -2.7 | -2.8 | Large | |
| -2.5 | -1.9 | -0.7 | Medium | |
| -2.3 | -0.8 | 0.6 | Small | |
| Value | Core | Growth | ||
YTD
| -17.8 | -24.6 | -30.7 | Large | |
| -20.4 | -24.3 | -31.5 | Medium | |
| -21.1 | -25.1 | -29.3 | Small | |
| Value | Core | Growth | ||
Index/market total returns as of 9/30/22 (%)
| Close | Week | YTD | |
|---|---|---|---|
| Dow Jones Industrial Average | 28,725.5 | -2.9 | -19.7 |
| NASDAQ Composite Index | 10,575.6 | -2.7 | -32.0 |
| S&P 500 Index | 3,585.6 | -2.9 | -23.9 |
| MSCI EAFE Index | 1,661.5 | -1.3 | -26.8 |
| Cboe Volatility Index | 31.6 | 5.7 | 83.7 |
International/developed (%)
| 1 week | YTD | |
|---|---|---|
| EAFE | -1.3 | -26.8 |
| Europe | 0.4 | -28.4 |
| France | 0.7 | -28.6 |
| Germany | -0.5 | -37.1 |
| Italy | -1.0 | -31.6 |
| Japan | -4.6 | -26.1 |
| Spain | -2.1 | -24.3 |
| Switzerland | 0.9 | -25.4 |
| U.K. | 0.6 | -18.6 |
Emerging markets (%)
| 1 week | YTD | |
|---|---|---|
| EM | -3.2 | -26.9 |
| Brazil | -4.1 | 11.8 |
| China | -2.6 | -31.1 |
| India | -1.9 | -9.4 |
| Indonesia | -1.5 | 8.0 |
| Korea | -6.5 | -40.0 |
| Mexico | -1.8 | -12.7 |
| Russia | -6.1 | -100.0 |
| Taiwan | -5.7 | -35.4 |
S&P 500 sectors (%)
| 1 week | YTD | |
|---|---|---|
| S&P 500 Index | -2.9 | -23.9 |
| Communication services | -3.0 | -39.0 |
| Consumer discretionary | -2.4 | -29.9 |
| Consumer staples | -3.8 | -11.8 |
| Energy | 2.0 | 34.9 |
| Financials | -2.4 | -21.2 |
| Healthcare | -1.4 | -13.1 |
| Industrials | -2.3 | -20.7 |
| Information tech | -4.2 | -31.4 |
| Materials | -0.6 | -23.7 |
| Real estate | -3.8 | -28.8 |
| Utilities | -8.8 | -6.5 |
Fixed income, currencies, and commodities
U.S. fixed-income style total returns as of 9/30/22 (%)
1 week
| 0.1 | -0.2 | -2.8 | High | Credit quality |
| 0.0 | -0.5 | -3.6 | Medium | |
| -0.5 | -1.3 | -1.8 | Low | |
| Limited | Moderate | Extensive | ||
| Interest-rate sensitivity | ||||
YTD
| -2.0 | -8.6 | -28.8 | High | Credit quality |
| -4.6 | -11.0 | -29.5 | Medium | |
| -4.7 | -14.6 | -25.5 | Low | |
| Limited | Moderate | Extensive | ||
| Interest-rate sensitivity | ||||
U.S. Treasury bond yields as of 9/30/22 (%)
| END OF WEEK | PRIOR YEAR END | YTD CHANGE (BPS) | |
|---|---|---|---|
| 2 Yr | 4.20 | 0.73 | 347 |
| 10 Yr | 3.80 | 1.51 | 229 |
| 30 Yr | 3.77 | 1.90 | 187 |
| 2-10 spread | -0.40 | 0.79 | -119 |
| 10-30 spread | -0.03 | 0.39 | -42 |
U.S. bond sector total returns (%)
| 1 week | YTD | |
|---|---|---|
| Aggregate | -1.0 | -14.6 |
| Bank loans | -0.9 | -4.8 |
| Convertible | -0.6 | -19.9 |
| Corporate | -1.7 | -19.0 |
| High yield | -1.3 | -14.6 |
| MBS | -0.7 | -13.7 |
| Municipal | -1.0 | -12.1 |
| Preferreds | 0.8 | -16.5 |
| TIPS | -2.4 | -13.6 |
| Treasury | -0.7 | -13.1 |
Global bond total returns (%)
| 1 week | YTD | |
|---|---|---|
| EM Local | -1.8 | -24.2 |
| EMD USD | -3.1 | -23.9 |
| Global Agg | -0.7 | -19.9 |
| Global Agg Ex-U.S. | -0.6 | -23.0 |
| Multiverse | -0.8 | -19.8 |
Commodities (%)
| 1 week | YTD | |
|---|---|---|
| BBG Com Ind | -0.7 | 13.6 |
| Oil (WTI) | 1.0 | 19.1 |
| Gold | 1.1 | -9.3 |
Currencies (USD) (%)
| 1 week | YTD | |
|---|---|---|
| EM FX | -1.4 | -8.1 |
| AUD | -1.7 | -11.6 |
| CAD | -1.1 | -8.1 |
| CHF | -0.3 | -7.4 |
| EUR | 0.9 | -13.9 |
| GBP | 2.4 | -17.6 |
| JPY | -1.0 | -20.4 |
GDP
Jobs
Inflation
Ex-U.S.
Regions/countries
| GDP Growth (%) annualized | Inflation Rate (%) CPI | Unemployment Rate (%) | 10-Year Government Bond (%) | Sovereign Credit Rating | |
| Eurozone | 4.1 | 10.0 | 6.6 | _ | _ |
| China | 0.4 | 2.5 | 5.3 | 2.78 | A+ |
| Germany | 1.7 | 10.9 | 5.5 | 2.11 | AAA |
| Japan | 1.6 | 3.0 | 2.5 | 0.25 | A+ |
| U.K. | 4.4 | 9.9 | 3.6 | 4.09 | AA |
Fund industry overview
Total net flows: open-end funds and ETFs as of 8/31/22 ($B)
| MONTH | 12 Month | ASSETS | |
| U.S. Equity | -10.7 | 88.8 | 10,913.1 |
| Sector Equity | 3.0 | -26.8 | 1,183.8 |
| Allocation | -2.2 | -34.3 | 1,303.5 |
| International Equity | -6.2 | 65.1 | 3,335.8 |
| Alternative | 1.6 | 40.6 | 162.4 |
| Commodities | -2.9 | 4.2 | 178.9 |
| Taxable Bond | 13.9 | 5.3 | 4,862.7 |
| Municipal Bond | -2.4 | -51.7 | 892.5 |
| Total all long-term funds | -1.1 | 108.9 | 22,979.0 |
Leading Morningstar fund categories by monthly net flows as of 8/31/22 ($B)
| MONTH | 12 Month | ASSETS | |
| Intermediate Core Bond | 15.7 | 29.5 | 1,113.0 |
| Long Government | 5.5 | 53.3 | 106.7 |
| Foreign Large Blend | 4.0 | 79.0 | 1,203.5 |
| Financial | 3.9 | -10.9 | 70.8 |
| Intermediate Core-Plus Bond | 3.0 | -40.4 | 714.4 |
Lagging Morningstar fund categories by monthly net flows as of 8/31/22 ($B)
| MONTH | 12 Month | ASSETS | |
| High Yield Bond | -7.7 | -41.9 | 299.9 |
| Large Growth | -6.0 | -59.9 | 2,001.1 |
| Foreign Large Growth | -3.1 | -21.0 | 454.0 |
| Europe Stock | -3.0 | -9.6 | 44.2 |
| Ultrashort Bond | -2.9 | -19.7 | 304.8 |
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.
