John Hancock: Weekly Market Recap Week Ended October 2

Yield curve steepens

The week produced another bumpy ride for bond investors, as yields of some government debt maturities briefly touched the highest levels since 2002 before modestly retreating. Yields of shorter duration bonds generally finished the week flat overall, with the 2-year Treasury ending at 4.84%. Longer duration yields rose, with the 10-year Treasury at 5.28% and the 30-year at 5.63%.

Moderating inflation

The U.S. Federal Reserve’s preferred gauge for tracking inflation recorded lower-than-expected price pressures in the latest monthly report. The Personal Consumption Expenditures Index rose at an annual rate of 3.4% in August, below consensus expectations for 3.7%. Excluding volatile energy and food prices, core PCE rose 3.0%, down from 3.3% in July and below consensus expectations.

GDP upgrade

The U.S. government’s final estimate of second-quarter GDP delivered a positive adjustment due to increases in consumer and government spending. GDP growth was estimated at an annual rate of 2.2% for the quarter versus a 1.5% figure for the previous estimate.

September snapshot

The U.S. stock market closed out the third quarter with mixed September results for the major indexes. Gains from many of the biggest technology stocks helped the NASDAQ outperform, and the index rose 1.9%. The S&P 500 fell 0.5% while the Dow lagged, declining 4.3% and snapping a five-month streak of gains.

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