Weekly Market Recap

Week ended January 15

Market-moving news

A step down

After posting gains of around 2% in the first week of the new year, the major U.S. stock indexes slipped about 1.0% to 1.5% in a mostly quiet week of trading. The decline pushed indexes off the record highs they had achieved entering the new year.

Earnings launch

With quarterly earnings season just starting, Wall Street analysts expect companies in the S&P 500 to report a 6.8% decline in net income compared with the prior year’s fourth quarter, according to FactSet. Of the 26 companies that had reported as of Friday, all but one exceeded expectations.

Stimulus proposal

In advance of Wednesday’s scheduled inauguration in Washington, President-elect Joe Biden announced a proposed $1.9 trillion coronavirus relief and economic stimulus package. In addition to more money for COVID-19 testing and vaccine distribution, the proposal calls for $1,400-per-person direct payments to most U.S. households.

Small-cap momentum

For the third week in a row, small caps outperformed as the Russell 2000 Index, a small-cap benchmark, posted a modest gain while large-cap indexes declined. Since the end of September 2020, the Russell 2000 has surged 41%.

Retail slump

U.S. retail sales dropped in December, marking the third monthly decline in a row. Sales fell 0.7% from November’s level, and the government also revised November’s data downward from a 1.1% decline to a 1.4% drop.

Inflation gauge

Although inflation has generally remained subdued amid the pandemic, U.S. consumer prices increased solidly in December. However, the 0.4% increase in the consumer price index was largely attributed to the rising cost of gasoline. In November, the index rose just 0.2%.

Unemployment line

Although the U.S. economy has recovered more than half of the 22 million jobs lost early last year as the pandemic emerged, new unemployment claims continue to grow. Total claims jumped to 965,000 in the latest weekly report—the most since last summer, and a sign that the rising numbers of coronavirus cases have triggered additional layoffs.

Bitcoin's stumble

Bitcoin’s rise above the $40,000 price threshold was short-lived. After eclipsing that record level at the end of the previous week, the cryptocurrency plunged below $32,000 at one point on Monday. By Friday, bitcoin was trading for around $35,000.

The week ahead: January 18-22

Monday

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

Tuesday

No major reports scheduled

Wednesday

Inauguration of Biden administration
Housing Market Index, National Association of Home Builders

Thursday

Weekly unemployment claims, U.S. Department of Labor
Housing starts, U.S. Census Bureau

Friday

Existing home sales, National Association of Realtors

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 1/15/21 (%)

1 week YTD

1 week
-0.1	-1.3	-2.4	Large
0.4	-0.1	-0.9	Mid
1.7	1.5	1.3	Small
Value	Core	Growth

YTD
2.8	0.8	-1.2	Large
3.6	3.1	2.2	Mid
7.8	7.5	7.3	Small
Value	Core	Growth

Index/market total returns as of 1/15/21 (%)

Close Week YTD

	Close	Week	YTD
Dow Jones Industrial Average	30,814.3	-0.9	0.7
NASDAQ Composite Index	12,998.5	-1.5	0.9
S&P 500 Index	3,768.3	-1.5	0.4
MSCI EAFE Index	2,184.9	-1.4	1.8
Cboe Volatility Index	24.3	12.5	6.6

International/developed (%)

1 week YTD

	1 week	YTD
EAFE	-1.4	1.8
Europe	-2.1	1.2
France	-2.7	0.2
Germany	-2.9	-0.6
Italy	-3.3	-0.8
Japan	0.2	2.5
Spain	-3.4	1.1
Switzerland	-0.4	0.3
U.K.	-1.9	3.8

Emerging markets (%)

1 week YTD

	1 week	YTD
EM	0.3	5.2
Brazil	-2.2	0.0
China	1.6	5.5
India	0.0	3.4
Indonesia	0.3	5.0
Korea	-3.1	6.7
Mexico	-1.3	4.6
Russia	0.2	5.7
Taiwan	2.1	9.4

S&P 500 sectors (%)

1 week YTD

	1 week	YTD
S&P 500 Index	-1.5	0.4
Communication services	-3.6	-3.6
Consumer discretionary	-1.9	1.9
Consumer staples	-2.0	-2.9
Energy	3.2	12.8
Financials	0.0	4.9
Healthcare	-0.3	3.0
Industrials	-0.9	0.2
Information tech	-2.6	-2.2
Materials	-1.6	4.0
Real estate	1.9	-0.7
Utilities	1.1	0.4

Fixed income, currencies, and commodities

U.S. fixed-income style total returns as of 1/15/21 (%)

1 week YTD

1 week
0.0	0.1	0.2	High
0.0	0.1	0.9	Med	QUALITY
0.3	0.1	0.1	Low
Ltd	Int	Long
INTEREST-RATE SENSITIVITY

YTD
0.0	-0.4	-3.7	High
0.0	-0.2	-1.9	Med	QUALITY
0.6	0.4	0.4	Low
Ltd	Int	Long
INTEREST-RATE SENSITIVITY

U.S. Treasury bond yields as of 1/15/21 (%)

END OF WEEK PRIOR YEAR END YTD CHANGE (BPS)

	END OF WEEK	PRIOR YEAR END	YTD CHANGE (BPS)
2 Yr	0.13	0.12	+1
10 Yr	1.10	0.92	+18
30 Yr	1.85	1.65	+20
2-10 spread	0.97	0.80	+17
10-30 spread	0.76	0.73	+3

U.S. bond sector total returns (%)

1 week YTD

	1 week	YTD
Aggregate	0.2	-0.8
Bank loans	0.3	1.1
Convertible	1.1	5.8
Corporate	0.3	-1.0
High yield	0.1	0.4
MBS	0.1	0.0
Municipal	0.1	0.0
Preferreds	0.2	-2.3
TIPS	0.5	-0.3
Treasury	0.1	-1.1

Global bond total returns (%)

1 week YTD

	1 week	YTD
EM Local	-0.3	-0.9
EMD USD	-0.7	-1.5
Global Agg	-0.4	-0.8
Global Agg Ex-U.S.	-0.6	-0.8
Multiverse	-0.4	-0.8

Commodities (%)

1 week YTD

	1 week	YTD
BBG Com Ind	1.0	3.1
Oil (WTI)	0.3	7.8
Gold	-0.3	-3.4

Currencies (USD) (%)

1 week YTD

	1 week	YTD
EM FX	0.1	-0.5
AUD	-1.0	-0.2
CAD	-0.5	-0.1
CHF	-0.8	-0.7
EUR	-1.3	-1.2
GBP	-0.1	-0.6
JPY	-0.1	-0.6

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	-4.3	-0.3	8.3	_	_
China	4.9	0.2	5.2	3.19	A+
Germany	-4.0	-0.3	4.5	-0.57	AAA
Japan	-5.8	-0.9	2.9	0.04	A+
U.K.	-8.6	0.3	4.9	0.29	AA

GDP Growth (%) annualized
Eurozone	-4.3
China	4.9
Germany	-4.0
Japan	-5.8
U.K.	-8.6

Inflation Rate (%) CPI
Eurozone	-0.3
China	0.2
Germany	-0.3
Japan	-0.9
U.K.	0.3

Unemployment Rate (%)
Eurozone	8.3
China	5.2
Germany	4.5
Japan	2.9
U.K.	4.9

10-Year Government Bond (%)
Eurozone	_
China	3.19
Germany	-0.57
Japan	0.04
U.K.	0.29

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 12/31/20 ($B)

as tracked by ISS Market Intelligence SIMFUND

MONTH 12 Month ASSETS

	MONTH	12 Month	ASSETS
U.S. Equity	-23.3	-238.5	10,616.8
Sector Equity	14.9	49.5	1,122.2
Allocation	-3.3	-76.8	1,344.1
International Equity	1.7	-56.2	3,781.7
Alternative	-1.1	4.2	198.7
Commodities	-0.7	35.7	166.4
Taxable Bond	74.5	450.0	5,021.5
Municipal Bond	12.0	55.1	938.7
Total all long-term funds	59.1	164.3	23,197.7

Leading Morningstar fund categories by monthly net flows as of 12/31/20 ($B)

	MONTH	12 Month	ASSETS
Intermediate Core Bond	28.1	125.4	1,181.9
Short-Term Bond	12.3	73.3	529.0
Intermediate Core-Plus Bond	10.2	60.9	815.6
Diversified Emerging Mkts	7.4	-8.0	685.1
Inflation-Protected Bond	5.8	22.4	207.6

Lagging Morningstar fund categories by monthly net flows as of 12/31/20 ($B)

	MONTH	12 Month	ASSETS
Large Blend	-20.8	-82.3	4,779.6
Large Growth	-6.4	-65.3	2,425.2
Foreign Large Value	-3.4	-17.1	189.1
Large Value	-2.2	-35.6	1,242.6
Foreign Large Blend	-1.8	3.3	1,320.9

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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