Weekly Market Recap

Week ended January 14

Capital market performance report

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

Market-moving news

Failure to launch

The second week of 2022 delivered another negative result for the major U.S. stock indexes, which slipped less than 1% as quarterly earnings season got under way. Concerns about rising inflation and interest rates continued to weigh on stocks.

Growth lags

The recent underperformance of technology stocks has made it a rough start for growth equities in 2022, as a U.S. large-cap growth index lagged its value-oriented counterpart for the second week in a row. So far in 2022, the growth benchmark has fallen nearly 6%; its value peer is up about 1%.

Earnings worries

With quarterly earnings season just starting, Wall Street analysts expect companies in the S&P 500 to report a more than 20% increase in net income compared with the prior year’s fourth quarter, according to FactSet. Of the 20 companies that had reported as of January 12, a dozen cited labor costs and shortages as a negative factor that weighed on their quarterly results.

Price pressures

December marked the third month in a row in which the annual inflation rate topped 6.0% and the seventh straight month of inflation above 5.0%. The Consumer Price Index showed that prices surged 7.0% for the latest 12-month period—the highest level since 1982. Excluding the often-volatile categories of food and energy, the rate was 5.5%.

Retail setback

U.S. retail sales fell more than most economists had expected in December, dropping 1.9% in the wake of the Omicron variant’s emergence and recent inflationary trends. The result followed a strong gain in October sales at U.S. retail stores, online sellers, and restaurants and a mostly flat result in November.

Crude awakening

U.S. crude oil prices climbed to more than $84 per barrel on Friday and posted the fourth weekly gain in a row. After briefly tumbling below $66 in early December following the emergence of the Omicron variant, the price of oil is back near a recent high reached in late October.

Fed chair's outlook

At a congressional hearing on his nomination to a second term as chair of the U.S. Federal Reserve, Jerome Powell said that the U.S. economy is healthy, yet also needs tighter monetary policy to address high inflation. Powell reaffirmed plans for a series of interest-rate increases this year as well as continued tapering of the Fed’s bond-purchasing program.

Dividend comeback

Many S&P 500 Index companies that cut dividends in response to the pandemic’s impact in 2020 increased their payouts to shareholders last year. Net dividend changes—factoring in decreases as well as increases—totaled nearly $70 billion on the positive side in 2021, compared with a net decline of about $41 billion in 2020, according to S&P Dow Jones Indices.

The week ahead: January 17-21

Monday

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

Tuesday

Housing Market Index, National Association of Home Builders

Wednesday

Housing starts, U.S. Census Bureau

Thursday

Weekly unemployment claims, U.S. Department of Labor
Existing home sales, National Association of Realtors

Friday

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

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 1/14/22 (%)

1 week YTD

1 week
0.2	-0.4	-0.9	Large
-0.1	-0.8	-2.1	Mid
0.3	-0.8	-2.0	Small
Value	Core	Growth

YTD
1.0	-2.5	-5.7	Large
-0.2	-3.5	-9.5	Mid
0.4	-3.7	-7.7	Small
Value	Core	Growth

Index/market total returns as of 1/14/22 (%)

Close Week YTD

	Close	Week	YTD
Dow Jones Industrial Average	35,911.8	-0.9	-1.1
NASDAQ Composite Index	14,893.8	-0.3	-4.8
S&P 500 Index	4,662.9	-0.3	-2.1
MSCI EAFE Index	2,333.0	0.2	-0.1
Cboe Volatility Index	19.2	2.1	11.6

International/developed (%)

1 week YTD

	1 week	YTD
EAFE	0.2	-0.1
Europe	-0.1	-0.4
France	-0.4	0.1
Germany	0.6	1.0
Italy	0.6	1.3
Japan	0.5	0.4
Spain	1.7	2.2
Switzerland	-1.7	-3.5
U.K.	1.8	3.8

Emerging markets (%)

1 week YTD

	1 week	YTD
EM	2.6	2.1
Brazil	6.4	3.9
China	2.9	1.2
India	2.8	5.0
Indonesia	1.3	3.1
Korea	0.5	-1.4
Mexico	1.6	1.4
Russia	-5.0	-6.1
Taiwan	2.8	3.2

S&P 500 sectors (%)

1 week YTD

	1 week	YTD
S&P 500 Index	-0.3	-2.1
Communication services	0.5	-2.0
Consumer discretionary	-1.5	-4.0
Consumer staples	-0.4	0.0
Energy	5.3	16.4
Financials	-0.8	4.6
Healthcare	-0.2	-4.8
Industrials	-0.6	0.0
Information tech	-0.1	-4.7
Materials	-0.6	-2.0
Real estate	-2.0	-6.8
Utilities	-1.4	-3.0

Fixed income, currencies, and commodities

U.S. fixed-income style total returns as of 1/14/22 (%)

1 week YTD

1 week
-0.1	-0.2	-0.2	High
-0.2	-0.3	-0.8	Med	QUALITY
0.1	0.1	-0.5	Low
Ltd	Int	Long
INTEREST-RATE SENSITIVITY

YTD
-0.2	-1.1	-4.3	High
-0.4	-1.3	-4.0	Med	QUALITY
-0.2	-0.8	-2.7	Low
Ltd	Int	Long
INTEREST-RATE SENSITIVITY

U.S. Treasury bond yields as of 1/14/22 (%)

END OF WEEK PRIOR YEAR END YTD CHANGE (BPS)

	END OF WEEK	PRIOR YEAR END	YTD CHANGE (BPS)
2 Yr	0.96	0.73	23
10 Yr	1.77	1.51	26
30 Yr	2.11	1.90	21
2-10 spread	0.81	0.78	3
10-30 spread	0.34	0.39	-5

U.S. bond sector total returns (%)

1 week YTD

	1 week	YTD
Aggregate	-0.3	-1.8
Bank loans	0.2	0.4
Convertible	-0.5	-3.8
Corporate	-0.3	-2.3
High yield	0.1	-0.8
MBS	-0.4	-1.5
Municipal	-0.2	-0.9
Preferreds	0.2	-1.4
TIPS	-0.3	-2.5
Treasury	-0.2	-1.8

Global bond total returns (%)

1 week YTD

	1 week	YTD
EM Local	0.9	0.6
EMD USD	-1.2	-2.7
Global Agg	0.4	-0.8
Global Agg Ex-U.S.	0.8	-0.1
Multiverse	0.4	-0.8

Commodities (%)

1 week YTD

	1 week	YTD
BBG Com Ind	2.2	4.4
Oil (WTI)	6.2	11.2
Gold	1.1	-0.7

Currencies (USD) (%)

1 week YTD

	1 week	YTD
EM FX	1.1	1.0
AUD	0.9	-0.5
CAD	1.0	0.7
CHF	0.9	-0.1
EUR	0.8	0.5
GBP	0.8	1.0
JPY	1.6	1.2

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	3.9	5.0	7.2	_	_
China	4.9	1.5	5.0	2.80	A+
Germany	2.5	5.3	5.2	-0.04	AAA
Japan	1.4	0.6	2.8	0.16	A+
U.K.	6.8	5.1	4.2	1.16	AA

GDP Growth (%) annualized
Eurozone	3.9
China	4.9
Germany	2.5
Japan	1.4
U.K.	6.8

Inflation Rate (%) CPI
Eurozone	5.0
China	1.5
Germany	5.3
Japan	0.6
U.K.	5.1

Unemployment Rate (%)
Eurozone	7.2
China	5.0
Germany	5.2
Japan	2.8
U.K.	4.2

10-Year Government Bond (%)
Eurozone	_
China	2.80
Germany	-0.04
Japan	0.16
U.K.	1.16

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 12/31/21 ($B)

as tracked by ISS Market Intelligence SIMFUND

MONTH 12 Month ASSETS

	MONTH	12 Month	ASSETS
U.S. Equity	7.3	104.2	13,210.3
Sector Equity	-1.1	85.1	1,444.0
Allocation	-4.8	-8.0	1,530.0
International Equity	12.5	232.6	4,217.3
Alternative	1.8	31.3	141.0
Commodities	-6.5	-2.4	167.8
Taxable Bond	13.5	544.0	5509.2
Municipal Bond	4.6	106.5	1,061.9
Total all long-term funds	27.9	1097.6	27,428.5

Leading Morningstar fund categories by monthly net flows as of 12/31/21 ($B)

	MONTH	12 Month	ASSETS
Large Blend	23.2	108.8	6,216.9
Foreign Large Blend	15.8	107.1	1,459.0
High Yield Bond	5.7	-1.2	384.7
Long Government	5.5	23.3	89.5
Inflation-Protected Bond	4.7	74.7	291.6

Lagging Morningstar fund categories by monthly net flows as of 12/31/21 ($B)

	MONTH	12 Month	ASSETS
Mid-Cap Growth	-6.9	-17.0	659.7
Ultrashort Bond	-5.3	2.8	326.1
Commodities Broad Basket	-4.4	11.4	48.3
Large Growth	-3.8	-68.9	2,760.7
Intermediate Core-Plus Bond	-3.2	51.4	856.3

Unless otherwise noted, all data is from FactSet.

Note: Totals displayed do not repsent the sum of the columns due to miscellaneous funds not assigned to a Morningstar category.

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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