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John Hancock: Weekly Market Recap Week Ended August 16th

August 20, 2019

 

Weak indicators

Wednesday’s 800-point plunge in the Dow was fueled in part by worse-than-expected data from two of the world’s biggest economies. Germany’s GDP contracted slightly in the second quarter amid further declines in exports, while China’s factory output was below expectations in July. 

 
Retail therapy

The week’s bleak economic news was partly offset by a monthly U.S. retail sales report that exceeded expectations. Strong quarterly results from several major U.S. retailers also helped to bolster the case that consumer spending remains strong, despite recent weakness in business spending. 

 
Yield differential

The recent decline in bond yields has made dividend-paying stocks look relatively attractive as potential sources of income. Around 60% of stocks in the S&P 500 currently offer a dividend yield of at least 1.7%, according to FactSet. That’s above the current yield of the 10-year U.S. Treasury bond, which fell below that threshold on August 12.


Policy talk

Investors will be closely watching for indications of a possible monetary policy shift when Federal Reserve Chairman Jerome Powell delivers a speech on Friday at an annual Fed symposium in Jackson Hole, Wyoming. On Wednesday, the Fed is set to release minutes from its most recent policy meeting, when it cut rates for the first time in more than a decade

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RISK: There are risks involved with investing, including loss of principal. Current and future portfolio holdings are subject to risks as well. Diversification may not protect against market risk. There is no assurance the goals of the strategies discussed will be met. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from difference in generally accepted accounting in principles or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Bonds and bond funds will decrease in value as interest rates rise. These and other risks are described more fully in the fund’s prospectus. CREDIT RISK: The issuer of a fixed income security may not be able to make interest and principal payments when due. The lower the credit rating of a security, the greater the risk of default on its obligation.

Investors should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. This and other information is contained in the Fund’s prospectus and summary prospectus, which may be obtained online or by calling 1-888-507-2798.

Please read the prospectus carefully before investing.