Weekly Market Recap

Week ended August 7

Market-moving news

Pushing higher

The S&P 500 recorded its fifth positive week out of the past six, moving within 1% of its record high set less than six months ago, and the NASDAQ surpassed its record set in the previous week. Strong earnings reports from healthcare and communication services companies provided a positive catalyst.

NASDAQ 11K milestone

The NASDAQ topped the 11,000-point threshold for the first time on Thursday. The milestone came less than two months after the index first eclipsed 10,000, driven higher by strong recent results from many technology stocks.

Earnings silver lining

While investors are expected to see the largest quarterly decline in earnings since 2009, the earnings season that’s now in its final phase is looking better than had been expected when it started in mid-July. Based on results through Friday, FactSet projected an earnings decline of about 34% for companies in the S&P 500, compared with the 44% drop that analysts had projected at the start of earnings season.

Jobs recovery

The nation’s wounded labor market continues to heal, although at a slower pace than in the late spring and early summer. The government reported the economy added 1.8 million jobs in July, trailing the 4.8 million jump in June and the 2.7 million increase in May. Those big gains came on the heels of a record, pandemic-driven loss of 20.8 million jobs in April.

Calmer seas

An index that measures investors’ expectations of short-term stock market volatility fell to its lowest level in nearly six months, before the coronavirus pandemic upended the market. The Cboe Volatility Index ended the week at around 22―still above its historic average, but far below the record closing high of nearly 83 that it set in mid-March.

Gold @ $2,000

Gold prices climbed above $2,000 per ounce on Tuesday for the first time and stayed above that threshold for the rest of the week. The precious metal’s price has recently been driven higher by concerns about the coronavirus pandemic, the global economy, and U.S. dollar volatility.

Bitcoin rally

The cryptocurrency bitcoin has been on a tear, rising around 25% over the past three weeks to its highest level in 12 months. Bitcoin was trading around $11,500 on Friday.

Washington gridlock

Stocks’ weekly gains came despite a rise in anxiety over the lack of conclusive progress toward an additional congressional package targeting the coronavirus and its economic impact. Talks between White House officials and Democratic leaders ended Thursday without a breakthrough, and the impasse appeared to deepen on Friday.

The week ahead: August 10-14

Monday

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

Tuesday

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

Wednesday

Consumer Price Index, U.S. Bureau of Labor Statistics
Federal budget, U.S. Department of the Treasury

Thursday

Weekly unemployment claims, U.S. Department of Labor
Export and import prices, U.S. Bureau of Labor Statistics

Friday

Retail sales, U.S. Census Bureau
Business inventories, U.S. Census Bureau
University of Michigan Index of Consumer Sentiment, preliminary result
Industrial production and capacity utilization, U.S. Federal Reserve

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 8/7/20 (%)

1 week YTD

1 week
2.7	2.4	2.1	Large
3.1	2.0	0.1	Mid
6.6	6.0	5.5	Small
Value	Core	Growth

YTD
-10.6	5.4	20.8	Large
-11.5	-1.8	12.6	Mid
-16.7	-5.2	5.8	Small
Value	Core	Growth

Index/market total returns as of 8/7/20 (%)

Close Week YTD

	Close	Week	YTD
Dow Jones Industrial Average	27,433.5	3.9	-2.5
NASDAQ Composite Index	11,011.0	2.5	23.4
S&P 500 Index	3,351.3	2.5	4.9
MSCI EAFE Index	1,855.1	2.0	-7.2
Cboe Volatility Index	22.2	-9.0	61.6

International/developed (%)

1 week YTD

	1 week	YTD
EAFE	2.0	-7.2
Europe	1.7	-7.5
France	2.0	-11.3
Germany	2.8	0.3
Italy	1.9	-12.8
Japan	3.1	-5.5
Spain	0.4	-21.9
Switzerland	0.2	3.4
U.K.	1.6	-20.9

Emerging markets (%)

1 week YTD

	1 week	YTD
EM	1.0	-0.5
Brazil	-4.4	-33.2
China	1.2	14.8
India	1.4	-6.9
Indonesia	0.0	-21.3
Korea	4.9	4.4
Mexico	1.2	-25.4
Russia	2.6	-20.0
Taiwan	1.0	16.0

S&P 500 sectors (%)

1 week YTD

	1 week	YTD
S&P 500 Index	2.5	4.9
Communication services	3.0	9.6
Consumer discretionary	1.9	19.1
Consumer staples	1.4	2.4
Energy	3.2	-36.7
Financials	3.3	-18.1
Healthcare	0.9	5.4
Industrials	4.8	-6.7
Information tech	3.0	25.1
Materials	2.2	1.8
Real estate	0.7	-4.2
Utilities	1.1	-3.2

Fixed income, currencies, and commodities

U.S. fixed-income style total returns as of 8/7/20 (%)

1 week YTD

1 week
0.0	-0.1	-0.5	High
0.0	0.1	0.8	Med	QUALITY
0.4	0.6	1.5	Low
Ltd	Int	Long
INTEREST-RATE SENSITIVITY

YTD
1.7	6.0	25.4	High
3.0	5.4	11.3	Med	QUALITY
-2.3	0.4	15.8	Low
Ltd	Int	Long
INTEREST-RATE SENSITIVITY

U.S. Treasury bond yields as of 8/7/20 (%)

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	0.56	1.92	-136
30 Yr	1.23	2.39	-116
2-10 spread	0.44	0.34	+10
10-30 spread	0.66	0.47	+19

U.S. bond sector total returns (%)

1 week YTD

	1 week	YTD
Aggregate	0.1	7.8
Bank loans	0.4	-2.3
Convertible	2.4	19.3
Corporate	0.5	8.5
High yield	0.6	0.4
MBS	0.1	3.8
Municipal	0.5	4.3
Preferreds	-0.4	2.0
TIPS	0.3	8.8
Treasury	-0.2	9.8

Global bond total returns (%)

1 week YTD

	1 week	YTD
EM Local	-1.2	-4.7
EMD USD	1.3	2.2
Global Agg	-0.1	6.2
Global Agg Ex-U.S.	-0.1	5.1
Multiverse	0.0	5.8

Commodities (%)

1 week YTD

	1 week	YTD
BBG Com Ind	2.6	-12.6
Oil (WTI)	2.4	-56.7
Gold	2.1	29.8

Currencies (USD) (%)

1 week YTD

	1 week	YTD
EM FX	-0.6	-6.6
AUD	0.1	2.1
CAD	0.1	-3.1
CHF	-0.3	6.1
EUR	-0.3	5.0
GBP	-0.6	-1.5
JPY	-0.1	2.6

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	-15.0	0.4	7.8	_	_
China	3.2	2.5	5.7	3.01	A+
Germany	-11.7	-0.1	4.2	-0.54	AAA
Japan	-2.2	0.1	2.8	0.01	A+
U.K.	-1.7	0.6	3.9	0.14	AA

GDP Growth (%) annualized
Eurozone	-15.0
China	3.2
Germany	-11.7
Japan	-2.2
U.K.	-1.7

Inflation Rate (%) CPI
Eurozone	0.4
China	2.5
Germany	-0.1
Japan	0.1
U.K.	0.6

Unemployment Rate (%)
Eurozone	7.8
China	5.7
Germany	4.2
Japan	2.8
U.K.	3.9

10-Year Government Bond (%)
Eurozone	_
China	3.01
Germany	-0.54
Japan	0.01
U.K.	0.14

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 6/30/20 ($B)

as tracked by ISS Market Intelligence SIMFUND

MONTH 12 Month ASSETS

	MONTH	12 Month	ASSETS
U.S. Equity	-26.2	-150.2	8,660.6
Sector Equity	2.5	-7.7	907.9
Allocation	-4.5	-70.6	1,208.4
International Equity	-17.4	-45.1	3,045.2
Alternative	1.1	2.3	180.0
Commodities	4.3	34.4	142.2
Taxable Bond	88.9	265.1	4,487.6
Municipal Bond	13.6	51.1	856.5
Total all long-term funds	59.5	48.5	19,499.9

Leading Morningstar fund categories by monthly net flows as of 6/30/20 ($B)

	MONTH	12 Month	ASSETS
Intermediate Core Bond	22.7	78.5	1,047.5
Corporate Bond	14.2	42.7	207.7
Short-Term Bond	11.3	35.3	461.9
Ultrashort Bond	10.0	25.4	276.3
Intermediate Core-Plus Bond	8.0	39.8	738.4

Lagging Morningstar fund categories by monthly net flows as of 6/30/20 ($B)

	MONTH	12 Month	ASSETS
Foreign Large Blend	-13.1	34.7	1,122.3
Large Blend	-13.1	7.0	3,940.5
Foreign Large Value	-4.3	-16.5	158.8
Mid-Cap Blend	-3.9	-9.9	384.5
World Allocation	-3.4	-32.7	247.2

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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August 06, 2020

Sector dispersion creates opportunities for long/short equity funds

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Long/short equity funds may be able to take advantage of coronavirus-driven sector dispersion and related market trends.

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Target-date funds: enabling investors to focus on the hard work of saving for retirement

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