Weekly Market Recap

Week ended January 15

Market-moving news

Market-moving news

Market-moving news
A step down

After posting gains of around 2% in the first week of the new year, the major U.S. stock indexes slipped about 1.0% to 1.5% in a mostly quiet week of trading. The decline pushed indexes off the record highs they had achieved entering the new year.

Market-moving news
Earnings launch

With quarterly earnings season just starting, Wall Street analysts expect companies in the S&P 500 to report a 6.8% decline in net income compared with the prior year’s fourth quarter, according to FactSet. Of the 26 companies that had reported as of Friday, all but one exceeded expectations. 

Market-moving news
Stimulus proposal

In advance of Wednesday’s scheduled inauguration in Washington, President-elect Joe Biden announced a proposed $1.9 trillion coronavirus relief and economic stimulus package. In addition to more money for COVID-19 testing and vaccine distribution, the proposal calls for $1,400-per-person direct payments to most U.S. households.

Market-moving news
Small-cap momentum

For the third week in a row, small caps outperformed as the Russell 2000 Index, a small-cap benchmark, posted a modest gain while large-cap indexes declined. Since the end of September 2020, the Russell 2000 has surged 41%. 

 

 
Market-moving news
Retail slump

U.S. retail sales dropped in December, marking the third monthly decline in a row. Sales fell 0.7% from November’s level, and the government also revised November’s data downward from a 1.1% decline to a 1.4% drop.

Market-moving news
Inflation gauge

Although inflation has generally remained subdued amid the pandemic, U.S. consumer prices increased solidly in December. However, the 0.4% increase in the consumer price index was largely attributed to the rising cost of gasoline. In November, the index rose just 0.2%.

Market-moving news
Unemployment line

Although the U.S. economy has recovered more than half of the 22 million jobs lost early last year as the pandemic emerged, new unemployment claims continue to grow. Total claims jumped to 965,000 in the latest weekly report—the most since last summer, and a sign that the rising numbers of coronavirus cases have triggered additional layoffs.

Market-moving news
Bitcoin's stumble

Bitcoin’s rise above the $40,000 price threshold was short-lived. After eclipsing that record level at the end of the previous week, the cryptocurrency plunged below $32,000 at one point on Monday. By Friday, bitcoin was trading for around $35,000.

The week ahead: January 18-22

Monday

  • Martin Luther King Jr. birthday observed, U.S. financial markets closed

 

Tuesday

  • No major reports scheduled
 

Wednesday

  • Inauguration of Biden administration
  • Housing Market Index, National Association of Home Builders  

Thursday

  • Weekly unemployment claims, U.S. Department of Labor
  • Housing starts, U.S. Census Bureau

 

 

 

 

Friday 

  • Existing home sales, National Association of Realtors

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 1/15/21 (%)
1 week
-0.1-1.3-2.4 Large
0.4-0.1-0.9 Mid
1.71.51.3 Small
Value Core Growth
YTD
2.80.8-1.2 Large
3.63.12.2 Mid
7.87.57.3 Small
Value Core Growth
Index/market total returns as of 1/15/21 (%)
Close Week YTD
Dow Jones Industrial Average 30,814.3 -0.9 0.7
NASDAQ Composite Index 12,998.5 -1.5 0.9
S&P 500 Index 3,768.3 -1.5 0.4
MSCI EAFE Index 2,184.9 -1.4 1.8
Cboe Volatility Index 24.3 12.5 6.6
International/developed (%)
1 week YTD
EAFE -1.4 1.8
Europe -2.1 1.2
France -2.7 0.2
Germany -2.9 -0.6
Italy -3.3 -0.8
Japan 0.2 2.5
Spain -3.4 1.1
Switzerland -0.4 0.3
U.K. -1.9 3.8
Emerging markets (%)
1 week YTD
EM 0.3 5.2
Brazil -2.2 0.0
China 1.6 5.5
India 0.0 3.4
Indonesia 0.3 5.0
Korea -3.1 6.7
Mexico -1.3 4.6
Russia 0.2 5.7
Taiwan 2.1 9.4
S&P 500 sectors (%)
1 week YTD
S&P 500 Index -1.5 0.4
Communication services -3.6 -3.6
Consumer discretionary -1.9 1.9
Consumer staples -2.0 -2.9
Energy 3.2 12.8
Financials 0.0 4.9
Healthcare -0.3 3.0
Industrials -0.9 0.2
Information tech -2.6 -2.2
Materials -1.6 4.0
Real estate 1.9 -0.7
Utilities 1.1 0.4

Fixed income, currencies, and commodities

U.S. fixed-income style total returns as of 1/15/21 (%)
1 week
0.00.10.2 High
0.00.10.9 Med QUALITY
0.30.10.1 Low
Ltd Int Long
INTEREST-RATE SENSITIVITY
YTD
0.0-0.4-3.7 High
0.0-0.2-1.9 Med QUALITY
0.60.40.4 Low
Ltd Int Long
INTEREST-RATE SENSITIVITY
U.S. Treasury bond yields as of 1/15/21 (%)
END OF WEEK PRIOR YEAR END YTD CHANGE (BPS)
2 Yr 0.13 0.12 +1
10 Yr 1.10 0.92 +18
30 Yr 1.85 1.65 +20
2-10 spread 0.97 0.80 +17
10-30 spread 0.76 0.73 +3
U.S. bond sector total returns (%)
1 week YTD
Aggregate 0.2 -0.8
Bank loans 0.3 1.1
Convertible 1.1 5.8
Corporate 0.3 -1.0
High yield 0.1 0.4
MBS 0.1 0.0
Municipal 0.1 0.0
Preferreds 0.2 -2.3
TIPS 0.5 -0.3
Treasury 0.1 -1.1
Global bond total returns (%)
1 week YTD
EM Local -0.3 -0.9
EMD USD -0.7 -1.5
Global Agg -0.4 -0.8
Global Agg Ex-U.S. -0.6 -0.8
Multiverse -0.4 -0.8
Commodities (%)
1 week YTD
BBG Com Ind 1.0 3.1
Oil (WTI) 0.3 7.8
Gold -0.3 -3.4
Currencies (USD) (%)
1 week YTD
EM FX 0.1 -0.5
AUD -1.0 -0.2
CAD -0.5 -0.1
CHF -0.8 -0.7
EUR -1.3 -1.2
GBP -0.1 -0.6
JPY -0.1 -0.6

U.S. economy

GDP

Jobs

Inflation

Ex-U.S.

Regions/countries

Fund industry overview

Total net flows: open-end funds and ETFs as of 12/31/20 ($B)

as tracked by ISS Market Intelligence SIMFUND
MONTH 12 Month ASSETS
U.S. Equity -23.3 -238.5 10,616.8
Sector Equity 14.9 49.5 1,122.2
Allocation -3.3 -76.8 1,344.1
International Equity 1.7 -56.2 3,781.7
Alternative -1.1 4.2 198.7
Commodities -0.7 35.7 166.4
Taxable Bond 74.5 450.0 5,021.5
Municipal Bond 12.0 55.1 938.7
Total all long-term funds 59.1 164.3 23,197.7

Leading Morningstar fund categories by monthly net flows as of 12/31/20 ($B)

MONTH 12 Month ASSETS
Intermediate Core Bond 28.1 125.4 1,181.9
Short-Term Bond 12.3 73.3 529.0
Intermediate Core-Plus Bond 10.2 60.9 815.6
Diversified Emerging Mkts 7.4 -8.0 685.1
Inflation-Protected Bond 5.8 22.4 207.6

Lagging Morningstar fund categories by monthly net flows as of 12/31/20 ($B)

MONTH 12 Month ASSETS
Large Blend -20.8 -82.3 4,779.6
Large Growth -6.4 -65.3 2,425.2
Foreign Large Value -3.4 -17.1 189.1
Large Value -2.2 -35.6 1,242.6
Foreign Large Blend -1.8 3.3 1,320.9

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.

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