Weekly Market Recap

Week ended January 17

Market-moving news

Records rise

The major U.S. stock indexes rose around 2% for the week, pushing their record levels higher, and the Dow closed above 29,000 for the first time on Wednesday. For the S&P 500, it was the seventh positive week out of the past eight.

Bank catalyst

Some of the nation’s biggest banks kicked off earnings season, reporting mostly solid results and providing a lift for stocks. Four of the six major banks that reported quarterly results beat analysts’ estimates for earnings and revenue, despite headwinds that the industry faces from low interest rates.

Trade pact signed

The United States and China on Wednesday signed a trade pact that removes many—but not all—U.S. tariffs on Chinese imports and commits China to purchase more U.S. goods. Negotiations on a potential second-phase deal addressing broader systemic disagreements are likely to begin soon, but they aren’t expected to be completed before the U.S. presidential election in November.

China's slowdown

The world’s second-largest economy grew at its slowest pace in nearly three decades. China reported that its GDP expanded last year at an annual rate of 6.1%, a figure that’s within the government’s target range of 6.0% to 6.5%.

German slump

Germany’s economic growth fell to its slowest pace in six years, slipping to a 0.6% annual GDP growth rate in 2019. Among the recent headwinds for Europe’s largest economy: weakness in its automobile industry, heightened global trade tensions, and slowing growth in China, a key trading partner with Germany.

Housing boom

U.S. home building activity climbed to the highest level in 13 years, according to data released on Friday. New housing starts in December surged nearly 17% to an annual rate of 1.6 million units, exceeding expectations and rising to the highest level since December 2006.

Retail therapy

Retail sales data from December eased concerns about soft sales figures from the preceding three months as holiday shopping got under way. Retail sales rose at a seasonally adjusted rate of 0.3% in December compared with the prior month as gains were reported in nearly every retail category.

Trillion dollar club

Google’s parent company has become the fourth U.S. company to achieve market capitalization of $1 trillion, based on the value of its publicly traded shares. Shares of Alphabet topped that threshold on Thursday, joining other $1 trillion-plus companies Apple, Amazon.com, and Microsoft.

The week ahead: January 20-24

Monday

Martin Luther King Jr. Day, U.S. financial markets closed

Tuesday

No major reports scheduled

Wednesday

Existing home sales, National Association of Realtors

Thursday

The Conference Board Leading Economic Index for the U.S.

Friday

No major reports scheduled

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 1/17/20

1 week YTD

1 week
1.7	2.0	2.3	Large
2.4	2.3	2.1	Mid
2.1	2.5	3.0	Small
Value	Core	Growth

YTD
1.4	3.2	4.9	Large
1.8	2.8	4.2	Mid
0.3	1.9	3.5	Small
Value	Core	Growth

Index/market total returns as of 1/17/20 (%)

Close Week YTD

	Close	Week	YTD
Dow Jones Industrial Average	29,348.1	1.8	2.9
NASDAQ Composite Index	9,388.9	2.3	4.7
S&P 500 Index	3,329.6	2.0	3.1
MSCI EAFE Index	2,057.7	0.9	1.0
Cboe Volatility Index	12.1	-4.0	-12.3

International/developed (%)

1 week YTD

	1 week	YTD
EAFE	0.9	1.0
Europe	1.2	1.0
France	1.0	1.1
Germany	0.1	0.9
Italy	0.3	1.4
Japan	-0.3	-0.2
Spain	0.9	0.2
Switzerland	2.6	2.3
U.K.	1.0	0.2

Emerging markets (%)

1 week YTD

	1 week	YTD
EM	1.2	2.9
Brazil	-0.4	-1.7
China	1.5	5.2
India	1.3	2.9
Indonesia	2.2	3.7
Korea	2.4	3.8
Mexico	2.9	6.4
Russia	1.3	5.9
Taiwan	0.4	1.0

S&P 500 sectors (%)

1 week YTD

	1 week	YTD
S&P 500 Index	2.0	3.1
Communication services	2.4	5.5
Consumer discretionary	1.1	2.0
Consumer staples	1.9	1.5
Energy	-1.1	-1.7
Financials	1.2	0.9
Healthcare	1.7	2.6
Industrials	2.0	3.6
Information tech	3.0	5.9
Materials	2.7	-0.5
Real estate	2.5	2.3
Utilities	3.8	3.3

Fixed income, currencies, and commodities

U.S. fixed-income style total returns (%) as of 1/17/20

1 week YTD

1 week
0.0	0.0	-0.3	High
0.0	0.1	0.4	Med	QUALITY
0.2	0.3	0.9	Low
Ltd	Int	Long
INTEREST-RATE SENSITIVITY

YTD
0.1	0.3	1.3	High
0.1	0.3	1.5	Med	QUALITY
0.7	0.8	1.8	Low
Ltd	Int	Long
INTEREST-RATE SENSITIVITY

U.S. Treasury bond yields as of 1/17/20 (%)

END OF WEEK PRIOR YEAR END YTD CHANGE (BPS)

	END OF WEEK	PRIOR YEAR END	YTD CHANGE (BPS)
2 Yr	1.56	1.58	-2
10 Yr	1.83	1.92	-9
30 Yr	2.30	2.39	-9
2-10 spread	0.27	0.34	-7
10-30 spread	0.46	0.47	-1

U.S. bond sector total returns (%)

1 week YTD

	1 week	YTD
Aggregate	0.1	0.5
Bank loans	0.1	0.5
Convertible	1.4	3.6
Corporate	0.1	0.6
High yield	0.3	0.8
MBS	0.1	0.3
Municipal	0.3	1.0
Preferreds	-0.2	1.0
TIPS	-0.1	0.5
Treasury	0.0	0.5

Global bond total returns (%)

1 week YTD

	1 week	YTD
EM Local	-0.4	-0.2
EMD USD	0.4	0.9
Global Agg	0.0	-0.2
Global Agg Ex-U.S.	-0.1	-0.6
Multiverse	0.0	-0.1

Commodities (%)

1 week YTD

	1 week	YTD
BBG Com Ind	-1.1	-1.3
Oil (WTI)	-0.7	-3.5
Gold	0.0	2.5

Currencies (USD) (%)

1 week YTD

	1 week	YTD
EM FX	-0.3	-0.3
AUD	-0.4	-2.1
CAD	-0.1	-0.7
CHF	0.6	0.1
EUR	-0.2	-1.2
GBP	-0.2	-1.6
JPY	-0.6	-1.4

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	1.2	1.3	7.5	_	_
China	6.0	4.5	3.6	3.11	A+
Germany	0.5	1.5	3.1	-0.25	AAA
Japan	1.7	0.5	2.2	0	A+
U.K.	1.1	1.3	3.8	0.62	AA

GDP Growth (%) annualized
Eurozone	1.2
China	6.0
Germany	0.5
Japan	1.7
U.K.	1.1

Inflation Rate (%) CPI
Eurozone	1.3
China	4.5
Germany	1.5
Japan	0.5
U.K.	1.3

Unemployment Rate (%)
Eurozone	7.5
China	3.6
Germany	3.1
Japan	2.2
U.K.	3.8

10-Year Government Bond (%)
Eurozone	_
China	3.11
Germany	-0.25
Japan	0
U.K.	0.62

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 12/31/19

as tracked by ISS Market Intelligence SIMFUND

MONTH 12 Month ASSETS

	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.

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

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