Weekly Market Recap

Week ended February 21

Market-moving news

Market-moving news

Market-moving news
Coronavirus concerns

With the coronavirus outbreak top of mind, major U.S. stock indexes felt the pressure. Although the S&P 500 and NASDAQ both hit record highs Wednesday, they were down more than 1% for the week, as was the Dow.

Market-moving news
Golden age

Gold climbed to more than $1,600 per ounce, reaching its highest level in seven years. The recent gain is attributed in part to investors seeking more safe-haven assets as concerns over the coronavirus and the direction of global growth continue to mount.

Market-moving news
Fed minutes

In the minutes from its January meeting, the U.S. Federal Reserve indicated it’s likely to keep interest rates unchanged, expressing confidence in the U.S. economy. Fed officials noted they’re also remaining watchful of other developments—including the coronavirus and trade uncertainty—and how they may affect the economic outlook.

Market-moving news
Crude awakening

U.S. crude oil prices ticked upward, reaching almost $54 per barrel Thursday for the first time in nearly a month. News of a smaller increase in oil supplies and falling gas inventories, based on figures from the U.S. Energy Information Administration, contributed to the price increase.

Market-moving news
Dollar days

The U.S. dollar rallied against the euro, Japanese yen, and Australian dollar, reflecting the U.S. economy’s strength amid ongoing uncertainty. On Tuesday, the euro experienced its biggest drop in 3 years against the greenback. The yen dropped to a 10-month low Thursday, and the Australian dollar plummeted to an 11-year low as of Friday. 

Market-moving news
Bruised Apple

Stocks closed lower Tuesday following Apple’s announcement that it wouldn’t meet its projected quarterly revenue. The tech giant said the impact of the coronavirus has limited iPhone production and decreased demand for its products in China.

Market-moving news
Japan economic worries

Japan could be on the verge of a recession as it faces challenges related to the effects of the coronavirus and a slowing economy. The world’s third-largest economy shrank at an annual rate of 6.3% during the fourth quarter, marking its biggest contraction in five years.

Market-moving news
House work

U.S. building permits, considered a gauge of future home construction, rose to an almost 13-year high, according to a report released by the U.S. Census Bureau. The number of building permits grew 9.2% in January, exceeding expectations and marking the highest level since March 2007.

The week ahead: February 24-28

Monday 

  • No major reports scheduled

 

Tuesday

  • S&P/Case-Shiller 20-City Composite Home Price Index
  • Consumer Confidence Index, The Conference Board

Wednesday

  • New home sales, U.S. Census Bureau

 

Thursday

  • Fourth-quarter GDP, second estimate, U.S. Bureau of Economic Analysis
  • Durable goods orders, U.S. Census Bureau

Friday

  • University of Michigan Index of Consumer Sentiment
  • Personal income and consumer spending, U.S. Bureau of Economic Analysis

 

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 2/21/20
1 week
-0.7-1.1-1.5 Large
-0.5-0.8-1.3 Mid
-0.4-0.5-0.7 Small
Value Core Growth
YTD
0.73.96.9 Large
1.42.85.0 Mid
-2.40.73.8 Small
Value Core Growth
Index/market total returns as of 2/21/20 (%)
Close Week YTD
Dow Jones Industrial Average 28,992.4 -1.4 1.9
NASDAQ Composite Index 9,576.6 -1.6 6.9
S&P 500 Index 3,337.8 -1.2 3.6
MSCI EAFE Index 2,002.9 -1.2 -1.5
Cboe Volatility Index 17.1 24.8 23.9
International/developed (%)
1 week YTD
EAFE -1.2 -1.5
Europe -0.5 -0.6
France -0.5 -1.6
Germany -1.0 -1.1
Italy -0.4 1.3
Japan -3.1 -4.4
Spain -0.7 0.7
Switzerland 0.2 3.5
U.K. -0.4 -3.7
Emerging markets (%)
1 week YTD
EM -2.0 -2.6
Brazil -2.4 -9.8
China -1.2 0.5
India -0.6 0.8
Indonesia -0.3 -4.0
Korea -5.6 -3.7
Mexico -2.7 3.0
Russia -0.3 -3.0
Taiwan -2.9 -3.5
S&P 500 sectors (%)
1 week YTD
S&P 500 Index -1.2 3.6
Communication services -1.2 4.4
Consumer discretionary -1.1 4.7
Consumer staples -0.1 3.0
Energy -0.9 -10.2
Financials -1.2 0.0
Healthcare -0.5 1.5
Industrials -1.2 2.6
Information tech -2.5 8.5
Materials -0.2 -1.7
Real estate 0.1 8.3
Utilities -0.1 8.7

Fixed income, currencies, and commodities

U.S. fixed-income style total returns (%) as of 2/21/20
1 week
0.10.42.3 High
0.20.31.0 Med QUALITY
0.10.10.5 Low
Ltd Int Long
INTEREST-RATE SENSITIVITY
YTD
0.41.58.8 High
0.71.55.4 Med QUALITY
0.71.24.9 Low
Ltd Int Long
INTEREST-RATE SENSITIVITY
U.S. Treasury bond yields as of 2/21/20 (%)
END OF WEEK PRIOR YEAR END YTD CHANGE (BPS)
2 Yr 1.35 1.58 -23
10 Yr 1.47 1.92 -45
30 Yr 1.91 2.39 -48
2-10 spread 0.12 0.34 -22
10-30 spread 0.44 0.47 -3
U.S. bond sector total returns (%)
1 week YTD
Aggregate 0.6 2.5
Bank loans 0.0 0.1
Convertible 1.0 8.0
Corporate 0.6 3.0
High yield 0.1 1.2
MBS 0.2 1.0
Municipal 0.6 2.3
Preferreds -0.5 1.0
TIPS 0.6 2.4
Treasury 0.8 2.9
Global bond total returns (%)
1 week YTD
EM Local -0.8 -1.9
EMD USD 0.5 2.7
Global Agg 0.1 0.6
Global Agg Ex-U.S. -0.1 -0.6
Multiverse 0.1 0.5
Commodities (%)
1 week YTD
BBG Com Ind 1.2 -5.5
Oil (WTI) 1.7 -12.6
Gold 4.0 8.1
Currencies (USD) (%)
1 week YTD
EM FX -1.0 -2.7
AUD -1.3 -5.7
CAD 0.2 -1.9
CHF 0.3 -1.0
EUR 0.1 -3.3
GBP -0.4 -2.2
JPY -1.7 -2.7

U.S. economy

GDP

Jobs

Inflation

Ex-U.S.

Regions/countries

Fund industry overview

Total net flows: open-end funds and ETFs ($B) as of 1/31/20

as tracked by ISS Market Intelligence SIMFUND
MONTH 12 Month ASSETS
U.S. equity -14.7 -77.1 9,096.5
Sector equity 4.2 -24.2 948.6
Allocation -2.1 -38.0 1,310.0
International equity 20.2 16.5 3,326.6
Alternative 2.8 -5.4 191.3
Commodities 2.1 7.2 111.9
Taxable bond 60.6 441.7 4,469.1
Municipal bond 13.8 110.7 887.5
Total all long-term funds 86.0 399.8 20,353.9

Leading Morningstar fund categories by monthly net flows ($B) as of 1/31/20

MONTH 12 Month ASSETS
Intermediate Core Bond 16.2 136.8 1,020.0
Foreign Large Blend 13.4 55.5 1,230.1
Intermediate Core-Plus Bond 10.4 73.9 728.4
Large Blend 7.0 74.0 4,143.9
Diversified Emerging Mkts 6.3 13.8 579.6

Lagging Morningstar fund categories by monthly net flows ($B) as of 1/31/20

MONTH 12 Month ASSETS
Large Growth -7.8 -79.3 1,900.2
Large Value -4.7 -23.7 1,217.9
Small Blend -3.5 -9.0 394.4
Mid-Cap Value -2.0 -16.2 254.7
Mid-Cap Growth -2.0 -10.3 371.9

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 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.

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