Weekly Market Recap

Week ended May 7

Market-moving news

Market-moving news

Market-moving news
Opposite directions

It was an uneven week for the major U.S. stock indexes, as the Dow climbed nearly 3%, the S&P 500 added more than 1%, and the NASDAQ fell more than 1%, with most of its weekly decline coming on Tuesday. The Dow and the S&P 500 both set records, eclipsing highs set less than a month earlier.   

Market-moving news
Jobs setback

Friday’s jobs report fell far short of expectations as the recent rollback of pandemic-related restrictions failed to provide much lift to the labor market. The economy generated 266,000 new jobs in April, far below economists’ expectations for a gain of nearly 1 million. The unemployment rate rose from 6.0% to 6.1%.

Market-moving news
Yield volatilty

Friday’s jobs report reinforced recent U.S. Federal Reserve comments suggesting that policymakers are in no rush to raise interest rates, and that sentiment helped to support bond prices, sending yields lower. The yield of the 10-year U.S. Treasury bond briefly fell below 1.50%—the lowest in nearly two months—before recovering in the afternoon to 1.56%.  

Market-moving news
Earnings surge

First-quarter earnings continued to improve, and S&P 500 companies are now expected to report a cumulative 49% increase over last year’s first-quarter results, according to FactSet. That’s up from the roughly 25% gain that analysts had forecast at the start of earnings season. As of Friday, results were in from around 90% of S&P 500 companies.

Market-moving news
Divergent market

Large-cap U.S. value stocks added to their run of year-to-date outperformance versus their large-cap growth counterparts, beating them by a wide margin for the week. A value stock benchmark climbed more than 2% while a growth benchmark fell nearly 1%.

Market-moving news
Manufacturing disappointment

Friday’s jobs report wasn’t the week’s only piece of disappointing U.S. economic news. The Institute for Supply Management’s index of manufacturing activity came in at 60.7 in April—down from 64.7 in March and below expectations for a 65.0 reading. A separate reading on the services sector also fell below expectations. 

Market-moving news
Copper rally

Prices of the widely used industrial metal copper surpassed record highs set in 2011 amid expectations of a global economic recovery. Copper futures prices on the London Metal Exchange rose nearly 3% on Friday to $10,386 per metric ton—roughly double the price 12 months ago.

Market-moving news
Vaccine approval

Although new COVID-19 cases in India continued to set daily records, there was progress on the vaccine front, as the World Health Organization (WHO) on Friday granted emergency-use approval for a vaccine developed by a Chinese state-owned drugmaker. The vaccine is the first developed by a non-Western country to win WHO backing.

 

The week ahead: May 10-14

Monday

  • No major reports scheduled

Tuesday

  • Job Openings and Labor Turnover Survey, U.S. Bureau of Labor Statistics 

Wednesday

  • Consumer Price Index, U.S. Bureau of Labor Statistics
  • Federal budget, U.S. Department of the Treasury 

Thursday

  • Weekly unemployment claims, U.S. Department of Labor
 

Friday 

  • Retail sales, U.S. Census Bureau
  • Wholesale inventories, U.S. Census Bureau
  • University of Michigan Index of Consumer Sentiment, preliminary result
  • Industrial production and capacity utilization, U.S. Federal Reserve

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 5/7/21 (%)
1 week
2.80.9-1.0 Large
2.50.7-2.9 Mid
3.00.3-2.7 Small
Value Core Growth
YTD
18.912.66.7 Large
21.514.42.0 Mid
27.415.44.3 Small
Value Core Growth
Index/market total returns as of 5/7/21 (%)
Close Week YTD
Dow Jones Industrial Average 34,777.8 2.7 14.3
NASDAQ Composite Index 13,752.2 -1.5 6.9
S&P 500 Index 4,232.6 1.3 13.3
MSCI EAFE Index 2,324.4 2.6 9.6
Cboe Volatility Index 16.7 -10.2 -26.8
International/developed (%)
1 week YTD
EAFE 2.6 9.6
Europe 2.9 12.2
France 3.0 14.4
Germany 2.2 10.4
Italy 2.8 10.0
Japan 2.4 2.6
Spain 3.4 10.1
Switzerland 2.4 5.3
U.K. 3.5 14.7
Emerging markets (%)
1 week YTD
EM 0.1 5.0
Brazil 7.2 2.8
China -2.2 -1.3
India 2.3 6.6
Indonesia -0.1 -7.6
Korea 0.6 5.4
Mexico 4.3 11.8
Russia 6.2 11.4
Taiwan -1.1 18.3
S&P 500 sectors (%)
1 week YTD
S&P 500 Index 1.3 13.3
Communication services 0.1 16.7
Consumer discretionary -1.2 9.1
Consumer staples 1.6 5.1
Energy 8.9 43.3
Financials 4.2 28.8
Healthcare 2.3 9.7
Industrials 3.4 19.3
Information tech -0.4 6.9
Materials 5.9 21.7
Real estate -0.9 17.0
Utilities -1.0 6.1

Fixed income, currencies, and commodities

U.S. fixed-income style total returns as of 5/7/21 (%)
1 week
0.00.20.5 High
0.10.20.9 Med QUALITY
0.10.30.7 Low
Ltd Int Long
INTEREST-RATE SENSITIVITY
YTD
0.1-1.1-10.9 High
0.0-0.9-5.0 Med QUALITY
3.32.31.6 Low
Ltd Int Long
INTEREST-RATE SENSITIVITY
U.S. Treasury bond yields as of 5/7/21 (%)
END OF WEEK PRIOR YEAR END YTD CHANGE (BPS)
2 Yr 0.14 0.12 +2
10 Yr 1.56 0.92 +64
30 Yr 2.28 1.65 +63
2-10 spread 1.42 0.80 +62
10-30 spread 0.72 0.73 -1
U.S. bond sector total returns (%)
1 week YTD
Aggregate 0.3 -2.3
Bank loans 0.0 1.1
Convertible -3.2 1.4
Corporate 0.5 -3.3
High yield 0.3 2.3
MBS 0.0 -0.6
Municipal 0.2 0.7
Preferreds 0.5 -1.0
TIPS 1.0 0.9
Treasury 0.3 -3.2
Global bond total returns (%)
1 week YTD
EM Local 1.9 -2.1
EMD USD 0.7 -1.8
Global Agg 0.6 -2.6
Global Agg Ex-U.S. 0.8 -2.8
Multiverse 0.6 -2.5
Commodities (%)
1 week YTD
BBG Com Ind 3.7 20.1
Oil (WTI) 2.2 34.4
Gold 3.6 -3.7
Currencies (USD) (%)
1 week YTD
EM FX 0.4 -1.6
AUD 1.5 1.6
CAD 1.2 4.8
CHF 1.0 -2.1
EUR 0.9 -0.8
GBP 1.0 2.3
JPY 0.7 -4.9

U.S. economy

GDP

Jobs

Inflation

Ex-U.S.

Regions/countries

Fund industry overview

Total net flows: open-end funds and ETFs as of 3/31/21 ($B)

as tracked by ISS Market Intelligence SIMFUND
MONTH 12 Month ASSETS
U.S. Equity 46.0 -167.8 11,351.9
Sector Equity 11.2 114.7 1,228.3
Allocation 0.0 -50.7 1,392.5
International Equity 31.5 -7.3 3,909.6
Alternative 4.9 18.3 217.1
Commodities -2.3 26.5 155.8
Taxable Bond 51.8 797.0 5,098.1
Municipal Bond 7.7 107.0 972.2
Total all long-term funds 150.2 781.2 24,333.3

Leading Morningstar fund categories by monthly net flows as of 3/31/21 ($B)

MONTH 12 Month ASSETS
Large Value 20.5 -5.0 1,431.1
Large Blend 16.7 -90.4 5,089.8
Diversified Emerging Mkts 13.2 24.0 731.7
Intermediate Core Bond 12.1 222.2 1,200.5
Short-Term Bond 10.1 118.0 546.3

Lagging Morningstar fund categories by monthly net flows as of 3/31/21 ($B)

MONTH 12 Month ASSETS
Large Growth -6.1 -77.1 2,432.2
Commodities Focused -5.3 20.0 116.8
Corporate Bond -3.7 36.6 210.1
Health -2.5 13.0 229.6
Technology -2.3 27.9 301.8

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 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.



Timing is everything: Three-minute macro

In the coming months, we expect the market to emphasize the timing of economic inflection points. We also detail our cautiously optimistic view on REITs and highlight that differing COVID-19 vaccination rates are making country picking in emerging markets even more crucial in this month's edition of Three-minute macro.

Read more

Bright outlook: 9 takeaways from a strong quarter for U.S. banks

Since the pandemic began, U.S. banks have successfully retrenched. Their latest earnings bolster our expectations that banks will lead a broader economic recovery.

Read more

Portfolio Intelligence podcast: what does inflation mean for the economy?

Frances Donald, global chief economist and global head of macroeconomic strategy at Manulife Investment Management, discusses the outlook for inflation.

Read more