John Hancock: Weekly Market Recap Week Ended February 22nd

Fast start

Entering the final week of February, the S&P 500 was on pace to record its biggest early-year advance in nearly three decades. The last time the index climbed more than 10% over January and February was in 1991. This year’s gains have been broad; as of Thursday, 90% of S&P 500 stocks were trading above their 50-day moving averages.

Fed chatter

Minutes from the U.S. Federal Reserve Board’s late January meeting showed that members appeared to agree on the need this year to stop reducing the size of the Fed’s bond portfolio. Such a move would be a further sign that the Fed remains intent on shifting from a policy of monetary tightening to a neutral stance.

Yield stability

The bond market is going through a quiet stretch, as yields of government bonds have remained unusually stable year to date after rising in 2018. So far this year, the yield of the 10-year U.S. Treasury bond has stayed within a fairly narrow range of 2.56% to 2.79%.

Temperature change

Stock market volatility is down sharply year to date. The Cboe Volatility Index, which measures investors’ expectations of short-term market turbulence, was down about 46% as of Friday. Compared with December 24, when volatility recently peaked, the VIX is down more than 60%.

Source: https://wmr.jhinvestments.com/