Weekly Market Recap

Week ended July 3

Market-moving news

Market-moving news

Market-moving news
Resurgent stocks

U.S. stocks recovered all the ground lost in the previous week’s decline, and then some. In a holiday-shortened trading week, each of the three major indexes posted a weekly gain exceeding 3%; the NASDAQ led the way with a nearly 5% rise.

 

 

 

 
Market-moving news
Bullish quarter

.The 20.5% return that the S&P 500 posted in the second quarter was the index’s best quarterly result since 1998, while the Dow’s 18.5% return was that index’s biggest since 1987. For the S&P 500, the last three months produced a near-complete turnaround from the first quarter, leaving the index with a -3.1% return for the first half of the year.   

Market-moving news
Mixed jobs picture

June’s U.S. jobs report produced better-than-expected numbers, including 4.8 million jobs added and an unemployment rate of 11.1%. However, the results reflected a snapshot of the labor market at mid-month, and economists believe that hiring weakened in late June as new coronavirus cases spiked and many states reinstated public health precautions.

 
Market-moving news
Growth tops value

Through the first half of the year, more than 33 percentage points separated the performance of a growth stock index from that of a value stock index, according to Morningstar. If growth stocks maintain that gap through the end of the year, it would be growth’s largest margin of full-year outperformance since 1999. 

 

 
Market-moving news
Sector leaders and laggards

The just-ended second quarter produced big performance gaps at the sector level. Consumer discretionary, information technology, and energy led the pack, generating returns greater than 30%. On the flip side, utilities and consumer staples both posted single-digit returns.

 
Market-moving news
Gold's luster

Gold prices rose 13% in the second quarter, their biggest quarterly gain in four years. On Tuesday, gold closed above $1,800 per ounce for the first time since 2011, and prices moved within 5% of their record high set that year.

Market-moving news
Stimulating conversation

Minutes released on Wednesday from the U.S. Federal Reserve’s most recent policy meeting show that officials considered additional economic stimulus measures beyond stating that short-term interest rates are likely to remain near zero through at least 2022. They also expressed concerns over the potential economic harm from lifting coronavirus-related restrictions too quickly.

 

 
Market-moving news
Lowered expectations

Over the last three months, analysts reduced their second-quarter earnings estimates for S&P 500 Index companies by 37%—the largest reduction since FactSet began tracking such data in 2002. Companies will begin reporting second-quarter results in mid-July, starting with major banks. 

 

 

 

The week ahead: July 6-10

Monday

  • Institute for Supply Management’s nonmanufacturing index
 

Tuesday

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

 

 

Wednesday

  • Consumer credit, U.S. Federal Reserve

Thursday

  • Weekly unemployment claims, U.S. Department of Labor
  • Wholesale inventories, U.S. Census Bureau  

 

 

 

 

Friday 

  • Producer Price Index, U.S. Bureau of Labor Statistics 

 

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 7/3/20
1 week
3.44.14.8 Large
3.63.73.9 Mid
3.53.94.3 Small
Value Core Growth
YTD
-16.0-1.811.8 Large
-18.0-8.65.8 Mid
-24.9-13.5-2.6 Small
Value Core Growth
Index/market total returns as of 7/3/20 (%)
Close Week YTD
Dow Jones Industrial Average 25,827.4 3.2 -8.3
NASDAQ Composite Index 10,207.6 4.6 14.4
S&P 500 Index 3,130.0 4.1 -2.1
MSCI EAFE Index 1,804.4 1.5 -9.8
Cboe Volatility Index 27.7 -20.2 100.7
International/developed (%)
1 week YTD
EAFE 1.5 -9.8
Europe 2.3 -11.1
France 2.8 -14.0
Germany 3.7 -5.3
Italy 3.5 -15.9
Japan -1.3 -6.7
Spain 4.0 -20.4
Switzerland 1.1 0.0
U.K. 1.2 -22.7
Emerging markets (%)
1 week YTD
EM 3.7 -6.1
Brazil 5.5 -35.9
China 5.2 9.1
India 3.7 -13.1
Indonesia -0.1 -24.5
Korea 1.0 -5.1
Mexico 3.9 -25.7
Russia -1.0 -22.9
Taiwan 3.2 1.9
S&P 500 sectors (%)
1 week YTD
S&P 500 Index 4.1 -2.1
Communication services 5.7 1.9
Consumer discretionary 5.3 9.5
Consumer staples 3.2 -5.2
Energy 2.2 -36.2
Financials 1.7 -24.3
Healthcare 4.2 0.6
Industrials 4.2 -14.4
Information tech 3.7 15.7
Materials 5.6 -5.0
Real estate 5.7 -6.5
Utilities 4.9 -8.9

Fixed income, currencies, and commodities

U.S. fixed-income style total returns (%) as of 7/3/20
1 week
0.00.0-1.0 High
0.00.11.2 Med QUALITY
0.40.50.9 Low
Ltd Int Long
INTEREST-RATE SENSITIVITY
YTD
1.75.720.6 High
2.94.75.3 Med QUALITY
-5.0-4.05.8 Low
Ltd Int Long
INTEREST-RATE SENSITIVITY
U.S. Treasury bond yields as of 7/3/20 (%)
END OF WEEK PRIOR YEAR END YTD CHANGE (BPS)
2 Yr 0.15 1.58 -143
10 Yr 0.67 1.92 -125
30 Yr 1.43 2.39 -96
2-10 spread 0.52 0.34 +18
10-30 spread 0.76 0.47 +29
U.S. bond sector total returns (%)
1 week YTD
Aggregate 0.1 6.3
Bank loans 0.1 -4.1
Convertible 4.1 10.8
Corporate 0.6 5.7
High yield 0.5 -4.0
MBS 0.0 3.5
Municipal 0.0 2.1
Preferreds 0.7 -0.9
TIPS 0.1 6.3
Treasury -0.2 8.6
Global bond total returns (%)
1 week YTD
EM Local 0.5 -6.4
EMD USD 0.9 -1.9
Global Agg 0.2 3.1
Global Agg Ex-U.S. 0.2 1.2
Multiverse 0.2 2.7
Commodities (%)
1 week YTD
BBG Com Ind 3.8 -18.6
Oil (WTI) 5.5 -57.1
Gold 0.5 16.4
Currencies (USD) (%)
1 week YTD
EM FX 0.2 -7.3
AUD 1.4 -1.3
CAD 1.0 -4.5
CHF 0.5 2.5
EUR 0.4 0.2
GBP 1.2 -5.9
JPY -0.2 1.1

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 5/31/20

as tracked by ISS Market Intelligence SIMFUND
MONTH 12 Month ASSETS
U.S. Equity -31.3 -131.9 8,493.0
Sector Equity 6.2 -10.0 887.0
Allocation -5.8 -69.8 1,197.4
International Equity -26.5 -36.1 2,932.6
Alternative 1.1 -2.6 176.9
Commodities 5.2 33.4 134.4
Taxable Bond 76.2 212.6 4,357.6
Municipal Bond 7.0 44.6 831.8
Total all long-term funds 32.0 14.4 19,022.1

Leading Morningstar fund categories by monthly net flows ($B) as of 5/31/20

MONTH 12 Month ASSETS
High Yield Bond 20.2 37.5 311.8
Intermediate Core Bond 15.5 62.1 1,016.8
Corporate Bond 8.8 34.7 189.9
Short-Term Bond 8.5 26.7 446.6
Ultrashort Bond 8.5 21.2 265.4

Lagging Morningstar fund categories by monthly net flows ($B) as of 5/31/20

MONTH 12 Month ASSETS
Large Blend -18.3 21.4 3,883.7
Large Value -9.3 -30.1 1,050.0
Foreign Large Blend -5.9 50.1 1,095.1
Diversified Emerging Mkts -5.1 -16.7 488.3
World Large Stock -3.5 -19.6 390.6

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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