Weekly Market Recap

Week ended September 18

Market-moving news

Slight decline

The major U.S. stock indexes fell for the third week in a row, retreating again from the record highs that the S&P 500 and the NASDAQ achieved early this month. The latest week’s decline was much smaller than the previous week’s pullback.

Small-cap surge

U.S. small-cap stocks had a breakout week, outperforming large caps by a wide margin. The Russell 2000 Index, a small-cap benchmark, gained nearly 3%. On a year-to-date basis, however, small caps continue to lag far behind large caps.

Near-zero rate outlook

The U.S. Federal Reserve kept interest rates unchanged and signaled that it expects to keep its benchmark rate near zero for at least three more years. All 17 Fed officials who made projections said they expect to keep rates near zero at least through next year, and 13 projected rates would stay there through 2023.

Buyback pullback

The economic impact of COVID-19 led many companies to take a cautious approach with corporate cash, as spending to buy back company shares plunged during this year’s second quarter. Share repurchases by companies in the S&P 500 dropped 55% from this year’s first quarter, according to S&P Dow Jones Indices.

Oil recovery

After two weeks of declines, U.S. crude oil prices recovered ground, climbing back to around $41 per barrel. Much of the week’s gain came on Wednesday, after the government reported that U.S. crude oil supplies fell to the lowest level in five months.

Lagging NASDAQ

The big technology stocks that had led the broader market for most of this year extended their more recent run of underperformance, and the tech-oriented NASDAQ trailed the Dow for the third week in a row. As of Friday, the NASDAQ was down more than 10% from the record high it reached on September 2.

Consumer confidence

A monthly gauge of U.S. consumer sentiment climbed to the highest level since March of this year, according to a preliminary reading on Friday from a University of Michigan survey. However, the index remains below its level in February, before the coronavirus pandemic began to weigh heavily on the economy.

Spending deal

Although Democrats and Republicans remained at odds over another coronavirus economic relief package, congressional leaders reported progress on another front. Leaders agreed on the broad outlines of a short-term spending measure that could avert a potential government shutdown next month.

The week ahead: September 21-25

Monday

No major reports scheduled

Tuesday

Existing home sales, National Association of Realtors

Wednesday

No major reports scheduled

Thursday

Weekly unemployment claims, U.S. Department of Labor
New home sales, U.S. Census Bureau

Friday

Durable goods, U.S. Census Bureau .

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 9/18/20 (%)

1 week YTD

1 week
0.5	-0.2	-0.8	Large
0.9	1.1	1.6	Mid
2.0	2.7	3.3	Small
Value	Core	Growth

YTD
-10.6	5.0	19.9	Large
-11.6	-2.7	9.9	Mid
-18.8	-7.0	4.3	Small
Value	Core	Growth

Index/market total returns as of 9/18/20 (%)

Close Week YTD

	Close	Week	YTD
Dow Jones Industrial Average	27,657.4	0.0	-1.4
NASDAQ Composite Index	10,793.3	-0.5	21.1
S&P 500 Index	3,319.5	-0.6	4.2
MSCI EAFE Index	1,911.8	0.8	-4.1
Cboe Volatility Index	25.8	-4.1	87.0

International/developed (%)

1 week YTD

	1 week	YTD
EAFE	0.8	-4.1
Europe	0.4	-5.4
France	-0.8	-9.2
Germany	-0.2	4.3
Italy	-1.7	-13.1
Japan	2.0	1.2
Spain	-0.2	-22.2
Switzerland	0.9	8.3
U.K.	0.9	-21.3

Emerging markets (%)

1 week YTD

	1 week	YTD
EM	1.6	1.4
Brazil	-0.3	-34.9
China	1.8	17.6
India	1.2	-1.7
Indonesia	0.6	-24.9
Korea	3.1	8.4
Mexico	0.3	-24.4
Russia	0.2	-24.3
Taiwan	2.4	17.6

S&P 500 sectors (%)

1 week YTD

	1 week	YTD
S&P 500 Index	-0.6	4.2
Communication services	-2.3	7.3
Consumer discretionary	-2.3	19.4
Consumer staples	-1.6	2.7
Energy	2.9	-42.8
Financials	-0.2	-18.6
Healthcare	0.9	4.6
Industrials	1.5	-2.1
Information tech	-1.0	22.9
Materials	1.0	8.5
Real estate	0.1	-6.5
Utilities	-0.7	-7.9

Fixed income, currencies, and commodities

U.S. fixed-income style total returns as of 9/18/20 (%)

1 week YTD

1 week
0.0	-0.1	-0.5	High
-0.1	-0.1	0.4	Med	QUALITY
0.4	0.1	0.0	Low
Ltd	Int	Long
INTEREST-RATE SENSITIVITY

YTD
1.8	5.9	21.0	High
2.9	5.2	8.1	Med	QUALITY
-1.1	0.5	13.9	Low
Ltd	Int	Long
INTEREST-RATE SENSITIVITY

U.S. Treasury bond yields as of 9/18/20 (%)

END OF WEEK PRIOR YEAR END YTD CHANGE (BPS)

	END OF WEEK	PRIOR YEAR END	YTD CHANGE (BPS)
2 Yr	0.13	1.58	-145
10 Yr	0.69	1.92	-123
30 Yr	1.45	2.39	-94
2-10 spread	0.56	0.34	+22
10-30 spread	0.76	0.47	+29

U.S. bond sector total returns (%)

1 week YTD

	1 week	YTD
Aggregate	-0.1	6.9
Bank loans	0.0	-0.7
Convertible	2.5	22.5
Corporate	0.1	7.7
High yield	0.1	0.5
MBS	-0.2	3.5
Municipal	0.1	3.4
Preferreds	0.1	3.1
TIPS	0.0	9.1
Treasury	-0.2	8.8

Global bond total returns (%)

1 week YTD

	1 week	YTD
EM Local	0.7	-3.3
EMD USD	-0.5	1.3
Global Agg	0.5	6.4
Global Agg Ex-U.S.	0.9	5.9
Multiverse	0.5	6.1

Commodities (%)

1 week YTD

	1 week	YTD
BBG Com Ind	2.0	-9.5
Oil (WTI)	9.8	-57.1
Gold	0.7	25.6

Currencies (USD) (%)

1 week YTD

	1 week	YTD
EM FX	0.5	-5.1
AUD	0.4	3.9
CAD	0.1	-1.6
CHF	0.0	6.4
EUR	0.2	5.7
GBP	1.4	-2.2
JPY	1.8	4.2

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	-14.7	-0.2	7.9	_	_
China	3.2	2.4	5.6	3.14	A+
Germany	-11.3	0.0	4.4	-0.48	AAA
Japan	-9.9	0.2	2.9	0.0	A+
U.K.	-21.7	0.2	4.1	0.17	AA

GDP Growth (%) annualized
Eurozone	-14.7
China	3.2
Germany	-11.3
Japan	-9.9
U.K.	-21.7

Inflation Rate (%) CPI
Eurozone	-0.2
China	2.4
Germany	0.0
Japan	0.2
U.K.	0.2

Unemployment Rate (%)
Eurozone	7.9
China	5.6
Germany	4.4
Japan	2.9
U.K.	4.1

10-Year Government Bond (%)
Eurozone	_
China	3.14
Germany	-0.48
Japan	0.0
U.K.	0.17

Sovereign Credit Rating
Eurozone	_
China	A+
Germany	AAA
Japan	A+
U.K.	AA

Fund industry overview

Total net flows: open-end funds and ETFs as of 8/31/20 ($B)

as tracked by ISS Market Intelligence SIMFUND

MONTH 12 Month ASSETS

	MONTH	12 Month	ASSETS
U.S. Equity	-51.2	-224.3	9,652.5
Sector Equity	4.4	12.0	995.7
Allocation	-5.1	-75.1	1,277.1
International Equity	-2.1	-51.4	3,327.0
Alternative	-0.2	4.7	192.8
Commodities	3.3	40.7	173.7
Taxable Bond	76.2	371.6	4,721.9
Municipal Bond	11.9	56.1	888.6
Total all long-term funds	36.6	105.2	21,241.0

Leading Morningstar fund categories by monthly net flows as of 8/31/20 ($B)

	MONTH	12 Month	ASSETS
Intermediate Core Bond	21.8	110.3	1,100.1
Intermediate Core-Plus Bond	11.8	49.9	773.7
Short-Term Bond	11.6	49.7	488.2
Ultrashort Bond	6.8	28.1	292.9
Inflation-Protected Bond	6.1	18.2	191.7

Lagging Morningstar fund categories by monthly net flows as of 8/31/20 ($B)

	MONTH	12 Month	ASSETS
Large Blend	-29.7	-55.9	4,386.8
Large Growth	-8.7	-65.5	2,338.4
Large Value	-5.7	-33.1	1,119.7
Long Government	-3.3	-7.0	72.5
Mid-Cap Value	-2.5	-23.1	217.5

Unless otherwise noted, all data is from FactSet.

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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Detailed weekly data on equities and fixed income—factors, fundamentals, styles/sizes, sectors/industries/stocks

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