John Hancock-Weekly Market Recap Week Ended March 13th

Bull to bear

The bull market that began in March 2009 ended just after turning 11 years old, as fallout from the coronavirus outbreak triggered a dropoff in U.S. stock indexes. Despite a huge rally in the final half-hour of Friday’s trading, the S&P 500, Dow, and NASDAQ all posted weekly declines of more than 8%, extending a swift retreat from the record highs that indexes set a mere three weeks earlier.

Yields in flux

As stock prices tumbled, bond prices posted big declines as well, sending yields back above the record lows set the previous week. The yield of the 10-year U.S. Treasury bond climbed to around 0.95% on Friday after ending the previous week at 0.71%. Credit markets were volatile as the banking system and the U.S. Federal Reserve struggled to address liquidity issues.

Historic days

The Dow on Thursday tumbled 10%—the index’s biggest single-day drop since the Black Monday decline of 1987—and the S&P 500 and the NASDAQ fell 9%. The next day, the indexes were in recovery mode as they surged more than 9%—mostly in the final 30 minutes of trading, when the Dow jumped more than 1,400 points.

Fed backstop

The U.S. Federal Reserve on Thursday sought to calm markets and restore liquidity by buying up Treasury bills and offering temporary cash loans through so-called repurchase agreements. The Fed is aiming $1.5 trillion in loans at the banking system to relieve strains as investors sell government bonds to raise cash.

Source: https://www.jhinvestments.com