Weekly Market Recap
Week ended July 19
Market-moving news
Momentum shift
The NASDAQ fell nearly 4%, snapping a six-week string of gains as several of the index’s mega-cap technology stocks slid for the second week in a row. The S&P 500 sustained a smaller weekly decline of around 2%, while the Dow was an outlier with a nearly 1% gain.
Market rotation
For the second week in a row, a U.S. small-cap stock benchmark outperformed by a wide margin, posting a 1.7% total return while its large-cap counterpart fell 1.8%. The Russell 2000 Index’s surge of 7.7% over two weeks was the clearest indicator of a rotation toward market segments seen as being the biggest beneficiaries of potential interest-rate cuts.
Style reversal
U.S. large-cap value stocks outpaced their growth counterparts for the second week in a row, chipping away at the growth style’s year-to-date performance leadership in another sign of a shift in market sentiment. Over the past two weeks, a value benchmark has risen a total of 3.5% versus a 4.3% decline for its growth counterpart.
Earnings gain
The second week of quarterly earnings season produced an uptick in expectations. Based on initial results and forecasts for upcoming reports, analysts on Friday were expecting S&P 500 companies to post an average second-quarter earnings increase of 9.7% compared with the same quarter a year earlier, according to FactSet. Just a week earlier, the projected growth rate was 9.1%.
Bumpier ride
In a week of choppy trading, an index that tracks investors’ expectations for short-term U.S. stock market volatility rose to the highest level in nearly three months. The Cboe Volatility Index climbed 32% for the week to its highest level since April 22, when the so-called VIX was near its year-to-date high.
Mixed signals
U.S. retail sales were unchanged in June relative to the previous month, beating the consensus forecast of economists, who had expected a sales decline of around 0.4%. However, another indicator came in worse than expected, as the latest weekly count of initial unemployment claims rose to 243,000. That figure was identical to the count from a weekly report last month, when the total was the highest since August 2023.
Europe holds steady
The European Central Bank kept its key interest rate unchanged, staying in a holding pattern for now after ordering an initial rate cut at a meeting last month. The bank’s rate cut in June widened a policy gap with the U.S. Federal Reserve, which hasn’t yet cut its key lending rate below its currently high level.
U.S. GDP ahead
Thursday’s scheduled release of the U.S. government’s initial estimate of second-quarter GDP is expected to show that the economy accelerated relative to the first quarter, when GDP grew at a 1.4% annual rate. An estimate released on Wednesday by U.S. Federal Reserve economists projected a second-quarter growth rate of 2.7%.
The week ahead: July 22-26
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Important disclosures
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. The Bloomberg U.S. Aggregate Bond Index (Agg) tracks the performance of U.S. investment-grade bonds in government, asset-backed, and corporate debt markets. 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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Investment returns
Equities
U.S. equity size and style total returns as of 7/19/24 (%)
1 week
| 0.7 | -1.8 | -3.9 | Large | |
| 0.6 | 0.0 | -1.7 | Medium | |
| 3.0 | 1.7 | 0.4 | Small | |
| Value | Core | Growth | ||
YTD
| 9.9 | 15.4 | 19.8 | Large | |
| 8.2 | 7.9 | 6.8 | Medium | |
| 7.1 | 8.6 | 10.1 | Small | |
| Value | Core | Growth | ||
Index/market total returns as of 7/19/24 (%)
| Close | 1 week | YTD | |
|---|---|---|---|
| Dow Jones Industrial Average | 40,287.5 | 0.7 | 8.0 |
| NASDAQ Composite Index | 17,726.9 | -3.6 | 18.5 |
| S&P 500 Index | 5,505.0 | -1.9 | 16.3 |
| MSCI EAFE Index | 2,360.5 | -2.4 | 7.9 |
| Cboe Volatility Index | 16.5 | 32.0 | 32.0 |
International/developed (%)
| 1 week | YTD | |
|---|---|---|
| EAFE | -2.4 | 7.9 |
| Europe | -2.9 | 7.6 |
| France | -2.7 | 1.0 |
| Germany | -3.3 | 7.5 |
| Italy | -1.0 | 16.1 |
| Japan | -1.2 | 10.8 |
| Spain | -1.6 | 10.8 |
| Switzerland | -0.9 | 5.4 |
| U.K. | -1.7 | 9.1 |
Emerging markets (%)
| 1 week | YTD | |
|---|---|---|
| EM | -3.0 | 8.5 |
| Brazil | -2.2 | -16.0 |
| China | -4.8 | 4.3 |
| India | -1.0 | 18.6 |
| Indonesia | -0.2 | -5.3 |
| Korea | -2.7 | 0.5 |
| Mexico | -3.5 | -10.6 |
| Russia | #N/A | #N/A |
| Taiwan | -5.5 | 28.8 |
S&P 500 sectors (%)
| 1 week | YTD | |
|---|---|---|
| S&P 500 Index | -1.9 | 16.3 |
| Communication services | -2.9 | 23.5 |
| Consumer discretionary | -2.7 | 7.1 |
| Consumer staples | 1.0 | 11.3 |
| Energy | 2.1 | 12.3 |
| Financials | 1.2 | 14.9 |
| Healthcare | -0.3 | 9.3 |
| Industrials | 0.6 | 10.4 |
| Information tech | -5.1 | 27.0 |
| Materials | -0.4 | 6.2 |
| Real estate | 1.4 | 3.5 |
| Utilities | -1.6 | 12.6 |
Fixed income, currencies, and commodities
U.S. fixed-income style total returns as of 7/19/24 (%)
1 week
| 0.1 | -0.1 | -0.9 | High | Credit quality |
| 0.0 | -0.2 | -0.9 | Medium | |
| 0.3 | 0.3 | 0.0 | Low | |
| Limited | Moderate | Extensive | ||
| Interest-rate sensitivity | ||||
YTD
| 2.4 | 1.1 | -3.5 | High | Credit quality |
| 1.9 | 1.1 | -0.8 | Medium | |
| 4.4 | 4.1 | 0.8 | Low | |
| Limited | Moderate | Extensive | ||
| Interest-rate sensitivity | ||||
U.S. Treasury bond yields as of 7/19/24 (%)
| END OF WEEK | PRIOR YEAR END | YTD CHANGE (BPS) | |
|---|---|---|---|
| 2 Yr | 4.50 | 4.25 | 25 |
| 10 Yr | 4.24 | 3.88 | 36 |
| 30 Yr | 4.45 | 4.03 | 42 |
| 2-10 spread | -26 | -37 | 11 |
| 10-30 spread | 21 | 16 | 5 |
U.S. bond sector total returns (%)
| 1 week | YTD | |
|---|---|---|
| Aggregate | -0.3 | 0.5 |
| Bank loans | 0.2 | 4.2 |
| Convertible | -0.5 | 3.5 |
| Corporate | -0.4 | 1.4 |
| High yield | 0.3 | 4.1 |
| MBS | -0.3 | 0.4 |
| Municipal | 0.2 | 0.3 |
| Preferreds | -0.4 | 2.9 |
| TIPS | -0.2 | 1.6 |
| Treasury | -0.3 | 0.2 |
Global bond total returns (%)
| 1 week | YTD | |
|---|---|---|
| EM Local | -0.7 | -0.7 |
| EMD USD | -0.4 | 3.6 |
| Global Agg | -0.2 | -1.6 |
| Global Agg Ex-U.S. | -0.1 | -3.0 |
| Multiverse | -0.2 | -1.4 |
Commodities (%)
| 1 week | YTD | |
|---|---|---|
| BBG Com Ind | -3.1 | 1.8 |
| Oil (WTI) | -2.8 | 16.5 |
| Gold | -0.8 | 15.9 |
Currencies (USD) (%)
| 1 week | YTD | |
|---|---|---|
| EM FX | -0.5 | -0.2 |
| AUD | -1.4 | -1.9 |
| CAD | -0.7 | -3.9 |
| CHF | 0.6 | -5.3 |
| EUR | -0.2 | -1.4 |
| GBP | -0.6 | 1.3 |
| JPY | 0.2 | -10.4 |
GDP
Jobs
Inflation
Ex-U.S.
Regions/countries
| GDP Growth (%) annualized | Inflation Rate (%) CPI | Unemployment Rate (%) | 10-Year Government Bond (%) | Sovereign Credit Rating | |
| Eurozone | 0.4 | 2.5 | 6.4 | _ | _ |
| China | 4.7 | 0.2 | 5.0 | 2.27 | A+ |
| Germany | -0.2 | 2.2 | 6.0 | 2.46 | AAA |
| Japan | -0.2 | 2.8 | 2.6 | 1.05 | A+ |
| U.K. | 0.3 | 2.0 | 4.4 | 4.13 | AA |
Fund industry overview
Total net flows: open-end funds and ETFs as of 6/30/24 ($B)
| MONTH | 12 Month | ASSETS | |
| U.S. Equity | -8.9 | 63.3 | 14,710.2 |
| Sector Equity | -1.3 | -35.1 | 1,346.0 |
| Allocation | -7.3 | -88.6 | 1,371.1 |
| International Equity | 9.2 | 0.8 | 4,119.3 |
| Alternative | 1.6 | 26.5 | 246.6 |
| Commodities | -0.4 | -13.4 | 169.7 |
| Taxable Bond | 25.9 | 313.0 | 5,373.3 |
| Municipal Bond | 1.0 | 3.6 | 880.8 |
| Total all long-term funds | 18.0 | 245.2 | 28,458.8 |
Leading Morningstar fund categories by monthly net flows as of 6/30/24 ($B)
| MONTH | 12 Month | ASSETS | |
| Foreign Large Blend | 6.8 | 48.0 | 1,577.4 |
| Long Government | 5.5 | 37.1 | 165.2 |
| Corporate Bond | 4.6 | 12.2 | 207.7 |
| Ultrashort Bond | 4.0 | 28.8 | 346.0 |
| Technology | 3.5 | 21.8 | 423.3 |
Lagging Morningstar fund categories by monthly net flows as of 6/30/24 ($B)
| MONTH | 12 Month | ASSETS | |
| Large Value | -3.3 | -52.0 | 1,744.4 |
| Moderate Allocation | -2.8 | -29.5 | 766.1 |
| Mid-Cap Growth | -2.8 | -25.4 | 363.5 |
| Foreign Large Value | -2.5 | -9.4 | 264.3 |
| Global Allocation | -2.3 | -21.7 | 258.5 |
Important disclosures
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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